Recently, the National Motor Freight Traffic Association (NMFTA) made several changes to the terms and conditions of the Uniform Straight Bill of Lading (USBL) published in the National Motor Freight Classification (“NMFC”) that have the potential to greatly impact the liability for lost or damaged cargo.
First introduced on July 14, 2016, NMFC 100-AP Supplement No. 2 was met with a lot of criticism from shippers. This prompted the Transportation Logistics Council (TLC) and the National Shippers Strategic Transportation Council (NASSTRAC) to file a Petition for Suspension and Investigation of the changes with the Surface Transportation Board (STB). This petition asked the STB to immediately suspend the proposed changes and initiate an investigation as the STB may deem appropriate. The STB denied to suspend the changes before they took effect on August 13, 2016. However, as part of its decision, the STB did announce that it will consider further comments from the parties, in order to decide whether to investigate further.
Changes to the Uniform Straight Bill of Lading
While there weren’t many changes to the USBL, some modifications that were made significantly change the terms and conditions that regulate the transportation of goods within the United States, if using the USBL. Key changes include:
- Section 1 (a). The motor carrier responsible for cargo loss or damage is the one shown on the bill of lading, rather than the one in possession of the goods when they are lost or damaged.
- Section 1 (b). Under the new terms, the burden of proof to prove the carrier’s negligence for loss, damage or delay is now on the shipper. Under the old terms, carrier responsibility was presumed when the shipper showed cargo was tendered in good condition, and the burden to prove freedom from negligence was on the carrier or the party in possession. The new supplement also adds “riots or strikes or any related causes” to the list of carrier defenses to a cargo claim.
- Section 3 (b). Claims for failure to make delivery must now be filled within nine months from the date of the bill of lading, and not “within nine months after a reasonable time for delivery has elapsed,” as stated in the old rule.
- Section 5 (a). The old language states that limitations of liability may apply if the cargo value has been stated by the shipper or has been agreed upon in writing as the released value. The new language allows a carrier to limit liability simply by publishing the limitation in its tariff.
What These Changes Mean for Shippers
With 656 reported members of the NMFTA, including most major less-than-truckload carriers, these changes may impact a significant portion of the transportation industry. Carriers that are participants in the NMFC are required to use these bills of lading, unless other arrangements are made between the parties, such as a formal transportation contract. It is important to work with any relevant carrier partners to understand how these changes may impact your shipments.
According to the STB, the party’s further comments, to be submitted before September 12, 2016, should address the threshold issues of: 1) whether the STB has authority to investigate this matter, and 2) if the Board’s prior decision in Motor Carrier Bureaus-Periodic Review Proceeding, EP 656 (STB served May 7, 2007) should affect the STB’s authority to review these changes. Any replies or rebuttals of the comments are due by October 3, 2016, indicating the STB plans to timely review the party’s arguments, so it’s important for both shippers and carriers alike to keep a close eye on this ongoing process.
- “Petition for Suspension and Investigation NMFC 100-AP Supplement 2” The Transportation & Logistics Council, Inc. https://www.stb.dot.gov/Filings/all.nsf/WEBUNID/7B8804ADD4E53E1A85257FFF005FCA40/$file/241206.pdf
- “Response of National Motor Freight Traffic Association, Inc. to the Petition of the Transportation & Logistics Council, Inc. and the Reply of NASSTRAC, Inc. in Support Thereof” https://www.stb.dot.gov/Filings/all.nsf/WEBUNID/ED966FB92BDB0E408525800600693587/$file/241250.pdf
- “Petition for Suspension and Investigation NMFC 100-AP Supplement No. 2.” The Transportation & Logistics Council, Inc. http://www.tlcouncil.org/sites/default/files/stb_decision_8-12-16.pdf