COLLECTING FROM CONSIGNEES
By Henry E. Seaton
March 2004
Reprinted from etrucker.com

Q Due to the new hours rules, we now impose a one-hour freetime rule for truckload loads. We have particular difficulty getting detention charges when consignees are responsible. Can we hold them liable?

A Ordinarily, detention and other accessorial charges are included with freight charges on the invoice sent to the shipper. When the shipper does not incur the detention, though, it often refuses to pay. What is needed is a way to pass carriers’ detention bills on to the responsible party.

It is well established in railroad law — from which motor carrier law is derived — that a consignee becomes liable for demurrage, the rail equivalent of detention, when a rail car is spotted at a consignee’s location for unloading. Both the uniform bill of lading and the standard truckload bill of lading used by motor carriers provide that the consignee will pay all lawful charges accruing on shipments. This language tracks the federal statute (Section 13706) establishing that the consignee is liable for additional rates and charges due after delivery unless it gives written notice before delivery that it is not the beneficial owner of the goods.

So it seems clear that a motor carrier can bill the consignee for detention on prepaid shipments based on the carrier’s rules or operating circulars incorporated into the bill of lading by reference. But the carrier’s rules tariffs can be trumped or negated if a carrier signs a contract that expressly supercedes the tariff, waives detention charges or otherwise precludes collection of detention from the consignee.

Although it is possible to hold a consignee liable for detention on prepaid shipments by protecting rights through properly drafted rules circulars and contracting practices, this is not enough in the truckload marketplace. Consignors of collect shipments and consignees on prepaid shipments traditionally haven’t been held responsible for detention.

So I believe that it’s only fair that you notify your contracting shipper’s customer or vendor in advance that you intend to hold it responsible for detention. It appears that most consignors and consignees insist on appointments for pickups and deliveries. I recommend sending appointment confirmations via fax or e-mail that explain the carrier’s expectations regarding live loading or unloading, including references to free time, detention and the liability of the party incurring the charges for paying them.

Because drivers cannot extend their time available for driving by logging off duty when they are held up at a loading dock, let the shipper or consignee know that it will ultimately bear expenses caused by dock inefficiencies.