ASK AUGELLO

By William J. Augello, Esquire

Question: The trade journals report about the new rate increases being published by parcel express carriers, but they never tell us about rule changes. Are parcel express shippers bound by rule changes nevertheless?

Answer: A. Yes, whether you read the tariff rules or not. The only time a shipper might not be charged with knowledge of a rule published in a tariff would be if it was a first-time shipper or an unsophisticated, non-commercial shipper.

The courts have been getting tougher on commercial establishments that use carriers regularly but claim ignorance of their tariff terms and conditions. As a matter of fact, there has been a rash of recent cases where shippers have been held to the carriers? tariff terms even though no bill of lading was issued by the carrier. Previous court decisions held that without a bill of lading that incorporated the carrier?s tariff liability limitations, the carrier is liable for the full invoice value.

More recently, when no bill of lading is issued before shipment, the courts are placing greater weight on the shipper?s ?prior dealings? under the carrier?s bill of lading or contract of carriage. In these cases, the courts are charging shippers with actual knowledge of a carrier?s standard limitations of liability when the shipper has had repeated dealings with the carrier and should have known their terms and conditions.

Despite its harshness on shippers, this result needs to be anticipated by shippers in the current deregulated environment. Parcel express carriers change their rates once or twice a year. However, these tariff changes are not confined to rates as express carriers systematically change their tariff rules as well. UPS? new tariff effective January 3, 2005, for instance, contains 28 pages of rules, many of which contain subtle changes in terms and conditions. For example, the Excess Value Rule formerly in Item 537 has been eliminated, and all references to ?insurance? have been changed to ?declared value? throughout the tariff. A new rule has been added in Item 592 limiting the transportation of packages containing RFID, UWB or PED devices only when such devices are in an inactivated state. Item 190, formerly applied to ?Authorized Shipping Outlets,? is now entitled ?The UPS Store/Third Party Retailers? and contains many changes.

The problem that shippers face is that every time a tariff is reissued, every item on every page must be compared with the previously effective items to detect these changes. The reason is that the courts charge shippers with constructive notice of those changes as of the effective date of the new tariff. It matters not to the courts that carriers today aren?t required to ?flag? all changes, or to inform shippers as to whether the new provisions result in an increase, a reduction or no change, as previously required by the I.C.C.?s Tariff Regulations. It matters not to the courts that their imposition of constructive notice on every shipper means millions of shippers must interrupt their daily routines to study every page of a new tariff before shipping to compare them with the previous tariff. In light of this disturbing trend, shippers would be well advised to heed the warning of an unknown author who wrote:

?Education is what you get when you read the fine print. Experience is what you get when you don?t.?

Mr. Augello is an attorney that has been practicing transportation law for the past 52 years. He also teaches transportation law at the Uni-versity of Arizona. He founded and has served as executive director of the Transportation Consumer Protection Council, Inc. for the past 30 years. He may be reached by phone at 520-531-0203 or online at williamaugello@comcast.net.