A Wealth of Information

By William J. Augello, Esq.

Editor's Note: In the last few years, Academia has (finally!) taken a real interest in logistics and supply chain management. There are now many fine programs in logistics, both degree and continuing education, offered by universities around the country. We are planning to have an article covering academic opportunities available in logistics in the December issue of Parcel Shipping & Distribution.

Where do parcel shippers go to learn about transportation and logistics? Are there material differences between shipping via parcel carriers compared with other modes of transportation? What are the benefits of knowing about the legal implications of dealing with carriers, intermediaries, warehousers, insurers and third parties? What are the differences between carriers, brokers, forwarders, 3PLs, consultants, etc.? Once we learn about transportation and logistics, how does one stay current?

I have attempted to provide the answers to these frequently asked questions in a new text, Transportation, Logistics and the Law. For those who are too busy to read this 550-page text, here are some of the answers to the above questions:

The most comprehensive course on logistics is given by the Institute of Logistics Management (successor to the Academy of Advanced Traffic). It offers 11 courses in distance learning format; successful students can earn three college credits per course without ever being on a campus. (Visit www.logistics-edu.com for details.)

There are material differences between using parcel express carriers and using motor common carriers, airlines, freight forwarders, ocean carriers, etc. Each mode uses different bills of lading forms, and therefore, their terms and conditions differ. The tariffs used by each mode and by individual carriers within each mode differ greatly. For example, parcel express carriers? tariffs limit their liability to $100 per package, while for many airlines and air freight forwarders it is 50? per pound. But all parcel express and airline rates apply on any product shipped and are based on fixed zones. On the other hand, motor, rail and ocean carriers? rates are published to apply on the specific commodity to be shipped.

The benefits of knowing the legal implications of the transportation and warehousing arrangements that shippers enter into are many, and they all have a direct impact on the firm?s bottom line. First and foremost is the problem of recovering for losses suffered in transit or in storage. Claims must be filed correctly and on time. Claimants must be knowledgeable in what carriers are and are not liable for. They must be familiar with the legality of the defenses that carriers (and their insurers) traditionally raise in an effort to evade payment of lawful claims. They must know what remedies are available when claims are denied and how to go about proving claims.

Next are the legal obligations to pay for the services rendered. The transportation press has recently drawn attention to the risks that shippers undertake when they pay freight charges to any party other than the carrier that performed the over-the-road transportation. When the third party files for bankruptcy without paying the carriers, the carriers look to the shipper to pay them.

Similarly, if a consignee on a ?collect? shipment fails to pay the carrier, the carrier will look to the shipper for payment. When a carrier accepts payment on a COD shipment and the shipper deposits the check ? which is determined to be a counterfeit ? the shipper will have difficulty in recovering the COD amount from the carrier. These disputes usually end up in court, thus adding unnecessary and unexpected costs to the shipper.

Overcharges by the carrier require the filing of overcharge claims by the shipper within strict time limits. On the other hand, undercharges by the carrier result in claims and suits against the shipper.

Negotiating contracts is the trickiest part of logistical management. Most unsophisticated shippers rely on their carriers to furnish a contract or rely on them for advice for shipping their goods. The general logic is that since transportation is the carrier?s business and selling goods is the shipper's business, shouldn?t the carrier know more about writing a transportation contract? Any shipper that adopts that logic will pay for it sooner or later. Contracts are drafted to protect the drafter?s client, not the other party! Shippers should never enter into a ?standard contract,? particularly a contract from a parcel express carrier. They will probably kick and scream if modifications are requested, but you will soon discover whether or not they really want your business and how much ?clout? your firm possesses.

There are many different types of carriers and intermediaries. It is essential that shippers understand the entities with which they are dealing because their liabilities and contractual obligations differ. Government regulations for each type of intermediary also differ. Some types require insurance, and others require surety bonds. Types such as intermodal operators, 3PLs and consultants have no government regulation. Furthermore, there are substantial differences between surface freight forwarders and ocean freight forwarders and NVOCCs.

The best source of current information and education on parcel shipping is through Parcel Shipping & Distribution, but for more specific information on how carriers are reacting in a deregulated environment, parcel shippers should read TransDigest, the monthly publication of the Transportation Consumer Protection Council, Inc. The Web site contains a catalog of TCPC publications that are available to help shippers and others comprehend the problem areas of the distribution cycle. TCPC is the only broad-based trade organization that currently represents all segments of the shipping community and which restricts its voting members to those having shipper interests.

Every transportation and logistical arrangement that parcel shippers enter into is based on a contract with the transporter or an intermediary. These arrangements require a certain amount of quasi-legal training in government statutes and regulations as well as transportation law. Transportation, Logistics and the Law was written to provide a handy desk reference for busy shippers, carriers, intermediaries, insurers, government officials and their attorneys and consultants. Everyone that ships or carries goods needs to know what laws are currently in effect after 20 years of deregulation as well as the problems that usually cause disputes and litigation. (Editor's Note: Visit www.transportlawtexts.com for details on how to obtain more complete information on the only text available today on these perplexing legal issues, and see page 39 in this issue for a complete review of the text.)

William J. Augello, Esq. is a professor of Law at the University of Arizona in Tucson, a member of the Institute of Logistical Management?s Board of Directors and Faculty and is executive director for the Transportation Consumer Protection Council, Inc. in Huntington, New York. He is of Counsel to his law firm of Augello, Pezold & Hirschmann, PC. He may be reached by phone at 520-531-0203 or by e-mail at williamaugello@worldnet.att.net.