Beware of Bill Lading Traps
By Henry E. Seaton

May 1999
Reprinted from

The bill of lading is the foundation of carrier-shipper relations. It's not only a receipt for goods but a contract requiring the carrier to deliver the identified shipment in good order in return for the shipper's promise to pay the agreed rate. But this once uniform document now can be a source of headaches for either party.

Until recently, shippers and carriers almost universally accepted the Uniform Straight Bill of Lading, published by National Motor Freight Classifications. In fact, even though the carrier technically issues the bill of lading, shippers typically give preprinted bills of lading to drivers for signature at the time of pickup. This procedure works well if both shipper and carrier accept the uniform bill.

But further deregulation has encouraged shippers increasingly to depart from the standard bill of lading. The accepted rules of commerce, as reflected in the uniform bill, are under attack. Numerous alternative bills with unacceptable carrier duties and responsibilities are circulating throughout the shipper community. Some shippers insert terms and conditions that no thinking carrier would knowingly sign.

In this environment, you should specify the bill of lading and the terms and conditions that govern it. Ensure that those terms and conditions supersede any nonconforming language in other documents the driver might sign. You can do this with proper language in your rules tariffs and in each written bilateral contract you execute. Where at all possible, provide drivers with your own bills of lading for pickup and delivery and show drivers how to prepare and execute them.

You should use the current version of NMFC's USBOL as your standard bill. The USBOL contains an updated statement of traditional rules of commerce. It's an evenhanded and basic statement of transportation law that responsible shippers and carriers should find acceptable. The USBOL addresses some important liability issues by:

*Incorporating your prepared rules and rates by reference, unless they are specifically superseded by signed contracts;
*Making the shipper or consignor responsible for payment of the freight charges unless the bill clearly indicates otherwise. The consignee also becomes liable for payment upon acceptance of the goods;
*Limiting your liability for loss or damage to the destination market value of the goods unless you receive and accept notification of special damages;
*Listing common-law exceptions from cargo liability;
*Requiring you to provide only reasonable dispatch. Unless you haul produce, you aren't required to make deliveries in time for a particular market;
*Requiring shippers to present claims in writing within nine months and file any lawsuit within two years and one day;
*Including rules for salvage and disposition of rejected freight;
*Providing for released rates, high-value articles and hazardous materials shipments, and
*Establishing your lien right under the Bill of Lading Act.

How does all this bill of lading language affect you? It gives you recourse when the consignee declines to pay your freight charges or refuses to unload your truck during ordinary business hours. It limits your liability when someone demands compensation for unforeseen losses. It backs up your demand for accepted claims procedures and reasonable time limits for the filing of claims. In short, the NMFC bill of lading avoids nasty surprises and establishes generally accepted ground rules for conducting business.
(703) 573-0700
Copyright© 2006 Law Office of Seaton & Husk, LP. All rights reserved.