My experience over the past 50 years in transportation and law is that most surprises and disputes in transportation stem from shippers� failure to study and comprehend the carriers� terms and conditions governing the movement of goods. There are two aspects to this misunderstanding: the carriers� tariff structures and the contracts shippers sign.
Carriers� rules tariffs are where the surprises are �buried.� Parcel express carriers refer to these publications as service guides, but they serve the same purpose as motor and rail carriers� rules tariffs. They contain the extra costs of special services that can add substantial costs to a shipper�s base rate. They include special charges for excess value declarations, dimensional weight shipments, residential deliveries, expedited service, size and weight shipments, COD shipments, confirmation of delivery, proof of delivery, tracking requests, minimum and maximum shipments, liability limits, claim rules and much more. Understanding the impact of these accessorial charges is critical to understanding your shipping costs and in negotiating contracts.
Volume shippers in a deregulated market warrant discounts off carriers� base rate structures. Exactly how much depends on many factors, but how is an individual shipper to know how much of a discount competitors are receiving? Or what its competitor�s liability limit is today? Or whether he must pay all of the carrier�s accessorial charges?
In view of the widespread use of confidentiality clauses today and the absence of tariff filing with a federal or state administrative agency, it is extremely difficult to obtain this information. Shippers would be well-advised, therefore, to seek the assistance of knowledgeable transportation consultants who know the market-driven levels of rates, charges and terms of service for comparable shippers. There are many such consultants that specialize in parcel express that can save shippers much grief and unnecessary expense by negotiating beneficial contracts.
An example of a typical pitfall in an express company�s four-year contract is a provision that subjects the shipper to the rates in effect on the date of movement � not on the date of the contract signing as one would expect. If an express company increases its rates every year, the shipper may be surprised to discover that it does not have a four-year deal on rates! Remember: every word in transportation contracts are deliberately chosen by the carrier�s attorneys for the carrier�s advantage, not the customer�s.
Unfortunately, express carriers generally insist on using their form contracts, unlike the motor carrier industry where sophisticated shippers insist on using their own contracts, which are usually drafted by their transportation attorneys.
In sum, transportation services must be purchased in the same manner as professional buyers of goods and other services. Unfortunately, too many buyers of transportation services have been led to believe that since transportation is the carrier�s principal business, they can rely on the carrier for advice and there is no need to spend time studying their arcane tariffs and bills of lading. Deregulation has removed the federal and state regulatory oversight agencies that formerly watched over the shipping public�s interests. Small shippers are now on their own, unless they seek assistance.