Time on Your Side?
Watch Procedural Deadlines Governing Claims and Charges Carefully
Henry E. Seaton
Reprinted from etrucker.com
Regulations and statutes
governing cargo claims and freight charges are often complex, and even
the most innocent-sounding provision may carry huge implications for
your business. That's why it's so important to understand the procedures
and statute of limitations in these requirements.
deadline. You may require any cargo claims to be filed nine months
of the loss or damage. Although this nine-month deadline appears on
the back of the uniform bill of lading, it's crucial that you specify
this deadline in your contracts and rules tariffs. Recently, courts
have sided with shippers whose carriers failed to declare the nine-month
limitation by contract, tariff or bill of lading. With a valid nine-month
defense, you may be able to defeat belated cargo claims when shippers
unilaterally offset claims against freight charges.
The regulations and case law are clear on what constitutes a valid claim.
The shipper must file a written claim that contains sufficient facts
to identify the shipment, asserts liability for the loss and delay and
makes a claim for a specific amount of money. Ordinarily, claimants
attach the bill of lading and an invoice showing the value of the shipment;
a bad order report, a notice of short and damage or a delivery receipt
alone is not sufficient. These are nice protections if you are acting
as a carrier, but it's something to watch if you are acting as a third-party
The two-year statute. In addition to setting a nine-month time
limit for filing claims, a carrier can establish a statute of limitations
of two years for the filing of a civil action against it. The uniform
bill of lading provides for the two-year statute of limitations. But
be sure to establish the limitation in your rules and contracts as well.
You can no longer be sure shippers will use the uniform bill.
The clock on the statute of limitations starts when you deny a formal
claim, so its important to follow the claims rules to the letter and
formally deny claims in writing. If you leave the claim open and "under
investigation," the time limit for filing suit will never run out.
180-day rule. To correct the abuses of delayed post-audits, Congress
passed the so-called 180-day rule. This law preserves a carrier's right
to collect additional charges - but only if it issues the revised bill
within 180 days of the original bill. Similarly, it preserves a shippers
right to recover overcharges only if it contests the original or amended
bill within 180 days of receipt.
The Surface Transportation Board has concluded that the 180-day-rule
requires carriers and shippers to contest undercharges or overcharges
within that time frame if they want to preserve their right to sue in
court. You can't afford, therefore, to wait to bill for accessorial
charges. If you accumulate detention and pallet charges, you may find
that recovery is barred.
The 180-day-rule gives you some protection against the "chicken
hawk" post-audit firms that to try to recover old overcharges for
The 18-month statute of limitation. You don't have much time
to file suit to recover freight charges. The statute of limitations
once was three years, but now it's 18 months. Recently, some courts
have held that this limit applies not only to carrier suits for freight
charges but also to suits brought by brokers in cases where interstate
surface transportation is involved.
Many contracts specify which state's laws apply, and many states provide
statutes of limitations longer than 18 months. But unless the shipper
waives the federal statute, expect the 18-month statute to apply and
don't expect to recover charges more than 18 months old when you sue.
It's important to be professional in your claims and collections procedures.
If you understand the filing deadlines and the statutes of limitations,
you can avoid losing your collection rights or paying time-barred claims.
Copyright© 2006 Law Office of Seaton & Husk, LP. All rights