Transportation Agreements

MODEL SHIPPER/CARRIER AGREEMENT

The American Trucking Association ("ATA") and the National Industrial Traffic League ("NITL"), a large shipper's group, have published a model truckload motor carrier-shipper agreement with commentary. See ATA/NITL Agreement.

This Agreement is an excellent starting point for negotiating motor carrier service terms and conditions. Because it is a negotiated agreement between major trucking and shipping organizations, it should be presented as a fair compromise.

In my book, "Protecting Motor Carrier Interests in Contracts", I list the "Dirty Dozen" or 12 typical contract provisions which appear in shipper generated contracts and which must be exercised from the contract as part of a carrier review.

Use of the ATA/NITL model contract will largely render this contract work unnecessary. Major issues such as (1) shipper's unilateral right of offset; (2) overbroad indemnity provisions; (3) confusing additional insured language; (4) incorporation of special and consequential damage provisions; (5) failure of duty to mitigate; (6) the absence of interest on late payments; have all been addressed and satisfactorily resolved from a motor carrier point of view.

The document as published on the ATA's includes commentary and instruction. Because the agreement has been endorsed by major shipper organizations, I highly recommend that carriers enter negotiations with the position that the model agreement is a fair and proper starting place.
--Henry E. Seaton

Contracts

Pursuant to the provisions of 49 U.S.C. §14101(b), carriers may enter written signed agreements with shippers and brokers which may expressly waive application of otherwise applicable general rules of federal transportation law. A great majority of the interstate truckload traffic in this country moves pursuant to such contract, which can contain provisions that dramatically and adversely effect the rights and remedies of motor carriers. Broadly worded indemnity clauses, the granting of the unilateral right to offset unliquidated damage claims against freight charges, and draconian insurance provisions are just some of the issues which carriers must understand. Some of these contracting issues are discussed in the attached article and our firm has prepared a booklet to be used as a contracting aid by its clients in formulating and reviewing transportation agreements. A large portion of our practice is devoted to transportation contracting, including agreements for dedicated services and logistics contracts.

For many clients, we provide a legal review of all long term contracts before they are executed. We work closely with carriers, shippers, and intermediaries template contracts to meet their transportation needs. It is a tool for use in the spot market where shipments are handled on a one time load-by-load basis we have designed abbreviated shipper/carrier and broker/carrier agreements which follow.

These agreements incorporate the essential elements of the most basic agreements and conform with general principles of transportation law. The provisions are intended to be even-handed and have been reviewed by both carrier and broker clients as well as members of the National Association of Small Trucking Companies. You may use these forms with attribution.

Shipper/Carrier Agreement

Broker/Carrier Agreement

Rules Circulars

Frequently shipments move on rate confirmation sheets or other abbreviated notices but the parties have no agreement about general rules of commerce, claims processing or accessorial charges. Carriers are allowed to publish rates and rules tariffs to be provided to their customers upon request and every thoughtful carrier should have such a publication. Carriers who do not have a thorough rules tariff should consult their transportation consultant or call this firm.
Actual notice on the contents of a carrier's rules tariff is a major issue for the shipping community. After the undercharge fiasco, shippers were reluctant to incorporate any outside provisions which they have not thoroughly reviewed and agreed to. Included here is a two-page Statement of Services which is short enough to be included with carrier solicitation material or included as an attachment to abbreviated contracts and load confirmation sheets. Also enclosed is a summary of important provisions in a typical truckload carrier's rules tariff which can be used as a checklist by the reader to ensure these important issues are addressed up front with the shipper or broker before the traffic is handled.

Every carrier should have a thorough Rules Tariff which addresses each of these issues. This firm maintains comprehensive rules tariff provisions for its clients' use. To overcome shipper or broker reticence to incorporate a carrier's rules circular and provisions into contracts by reference, we suggest that you place these provisions on your website and incorporate a written notice in your agreement: "Governing rules and provisions can be found at 'www.yourcompanyname.com'.

Bills of Lading

There is no specified bill of lading required by federal regulation. Carriers, not shippers or brokers, are required to issue the receipt or bill of lading, but all that is required of its content is that the consignor and consignee be named, the origins and destinations identified, the number of packages, the description of the freight, and the weight, volume or measurement for rating purposes be included. 49 C.F.R. §§373.

Traditionally, the industry has used the uniform straight domestic bill of lading published by the National Motor Freight Classification (NMFC). This bill of lading traditionally tracked the mandatory bill used by railroads and barge lines. With deregulation, a number of different bills of lading have been promulgated by special interest groups. NMFC convened a group of interested carriers and shippers simplifying its straight bill of lading, to give effect to the changes in recent deregulation.

It is the firm's position that there needs to be an industry standard and that the standard bill of lading published by National Motor Freight reflects the traditional and accepted rules of commerce. It is suggested that motor carriers pay the subscription dues to NMFC (the bill of lading is copyrighted but is not enforced). Carriers should note in their rules circulars and contracts that the terms and conditions of the uniform straight bill of lading shall apply and that drivers sign non-conforming bills of lading as receipt of the goods only.

For more on contracts, tariffs and bill of lading, refer to the Articles on Transportation Law.