Time is on your side – or not

Deadlines on claims are governed by federal law

By Henry E. Seaton
August 5, 2011
Reprinted from:www.ccjdigital.com / etrucker.com

Q: As a shipper, we are being dunned for waiver of discount by a less-than-truckload carrier for shipments that are more than two years old. Is this legal?

Q: A broker now refuses to pay current freight bills because of a cargo claim it never processed with us that occurred more than four years ago. Is there a statute of limitations?

A: It is surprising that I should receive two questions concerning time limitations – one from a shipper and one from a carrier – in the same month. I previously have discussed time limits for freight charges and cargo claims, but a simple review of the applicable law probably is helpful.

As a result of deregulation, shippers were faced with millions in undercharge claims during the 1980s that led to an important change in the federal statute concerning the collection of freight charges. Two time limits are involved.

Overcharge/undercharge claims

Both shippers and carriers now are governed by the so-called 180-day rule for noticing up overcharges and undercharges. A shipper has 180 days from receipt of the initial freight invoice to contest the rate. “A shipper must contest the original bill or a subsequent bill within 180 days of receipt of the bill in order to have the right to contest such charges.” [See 49 U.S.C. 13710(A)(3)(b).]

Similarly, a carrier has 180 days from the initial invoice to submit a supplemental bill, notice of waiver of discount, or invoice for an adjusted amount. Failure to submit timely written notice results in barring overcharge and undercharge claims. “A carrier must issue any bill for charges in addition to those originally billed within 180 days of the receipt of the original bill in order to have a right to collect such charges.” [See 49 U.S.C. 13710(A)(3)(a).] [See Carolina Traffic Services of Gastonia, Petition for Declaratory Order, 1996 Federal Carrier Cases (CCH) ¶38,285 at 48,048.]

Moreover, the statute for suing to collect freight charges has been shortened from three years to 18 months. [See 49 U.S.C. 14705.] As a result of these notification and statutory changes, the important dates to remember are six months to post-audit and give notice, and 18 months to sue for outstanding freight charges.

Cargo claims

Pursuant to federal statute on cargo claims, a carrier may not by rule, contract or otherwise establish a period of less than nine months for filing a claim against it or a period of less than two years for bringing a civil action against it. [See 49 U.S.C. 14706(e).] Incorporation of the uniform or standard bill of lading – either by usage, by contract or in a carrier’s rules circular – will suffice to establish these deadlines for claims.

Delaying a response to a shipper’s claims won’t thwart a lawsuit.

It is important that a carrier ensure these deadlines are part of the transaction since the statute is permissive only. If not incorporated by contract, a shipper may file a claim subject only to the equitable doctrine of laches and any state law-applicable statute of limitations in contract or tort. Even if you did not have the benefit of the federal statute, four years to tell you about a claim does not seem equitable, and laches may apply if the applicable state law statute of limitations has not run already.

One other pointer to carriers is important: The two-year federal statute for bringing civil actions on cargo claims does not begin to run until the carrier gives written notice that the claim has been disallowed. As a result, simply delaying a response to the claim or not stating affirmatively in your response that the claim is denied only prolongs the statute.

Remember, whether you are a shipper or a carrier, these general rules of commerce can be altered in a written contract that expressly waives general principles of federal transportation law and statutes under 49 U.S.C. 14101(b). In the name of consistency and evenhanded treatment of shippers, brokers and carriers, I recommend that these statutes and time limits be accepted readily by all parties.

Article printed from Commercial Carrier Journal: http://www.ccjdigital.com

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