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Question: |
Recently we have seen major carriers modify their rules tariffs in response to market and some of the new security conditions. What recourse to shippers have when carriers make what might seem to be arbitrary changes to their rules tariffs. Other than moving to another carrier, does a shipper with a valid carrier contract have any other alternatives such as chosing to remain with the rules tariff in effect when the signed their original contracts? | ||
Answer: |
This question submitted by a visitor to the Tranzact site is very interesting. The interesting part of the question is not the direct answer. Prices now are subject to the market place but, as is true with any involvement of the government, governmental regulation still impacts pricing by carriers. The involvement of the government depends upon the definition of two terms in the question. The first term is “tariff” and the second term is “carrier”. A tariff can have several meanings. If a shipper is importing goods from overseas a tariff becomes important because duty charges will be contained in a tariff. Those charges represent an exactment governed by a very detailed set of regulations. Of course, the definition connoted in the question refers to a public document setting forth the services of a common carrier and the rates, rules, regulations and charges applicable to those services. The term carrier historically meant a common carrier obligated at common law to serve the shipping public without undue discrimination in the area of service and the rates applicable on the service. This term applied to all modes. Today, those modes include ocean, air, rail and motor. These differing modes complicate the answer to the question. For example, there are still tariffs that exist that apply to ocean transportation. Also, there are tariffs that apply to rail and motor carriers. Household goods motor carriers are an example. However, the question seems directed specifically at the motor mode and more specifically at cargo other than household goods. The deregulation mentioned in the question defined motor carriers as essentially a motor common carrier except to the extent a contract exists such as when the services of Tranzact are used through the Freedom Logistics Network. Where there is no contract the deregulation eliminated the duty of motor common carriers to file tariffs with a governmental agency. However, this did not eliminate tariffs in the sense historically understood in the transportation business. Tariffs are nothing more than a common reference guide for determining the nature of service and the price for that service. There are three basic types of rate tariffs. There are class rate tariffs, commodity rate tariffs and exception tariffs where rates will be scheduled. There are rules tariffs setting out charges for specific services and accessorial charges will be found in those tariffs. There are classification tariffs that class the commodities for the class rate tariffs. There are mileage tariffs that schedule distances. The differing types of tariffs for motor carriers suggest some matters common to all carriers such as mileage. This is true and these tariffs are still filed and observed under antitrust exemptions. The two major tariffs of this type are the classification tariff and the mileage tariff. Except for those tariffs the deregulation act still required motor common carriers to maintain what motor carriers still call tariffs but the tariffs are not filed with any governmental agency. However, a shipper has a right to see those “tariffs.” Specifically, the statute says,
So, in summary, tariffs still exist. Government regulation still exists in the area and this regulation even provides certain shipper rights as shown above. But prices are subject to the market place. |
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| Question: |
"Some of our carriers still refer to "tariffs" but I was under the impression that tariffs were eliminated after the Interstate Commerce Commission was closed down at the end of 1995. Are prices not now subject to the market place and not government regulation?" | ||
| Answer: |
This question submitted by a visitor to the Tranzact site is very interesting. The interesting part of the question is not the direct answer. Prices now are subject to the market place but, as is true with any involvement of the government, governmental regulation still impacts pricing by the carriers. The involvement of the government depends upon the definition of two terms in the question. The first term is “tariff” and the second term is “carrier”. A tariff can have several meanings. If a shipper is importing goods from overseas, a tariff becomes important because duty charges assessed by the U.S. Customs Service will be contained in a tariff. Those charges represent an exactment governed by a very detailed set of regulations. Of course, the definition connoted in the question refers to a public document setting forth the services of a common carrier and the rates, rules, regulations and charges applicable to those services. The term carrier historically meant a common carrier obligated at common law to serve the shipping public without undue discrimination in the area of service and the rates applicable on the service. This term applied to all modes. Today, those modes include ocean, air, rail and motor. These differing modes complicate the answer to the question. For example, there are still tariffs that exist that apply to ocean transportation. Also, there are tariffs that apply to rail and motor carriers such as Household Goods motor carriers as an example. However, the question seems directed specifically at the motor mode and more specifically at cargo other than household goods. The deregulation mentioned in the question defined motor carriers as essentially a motor common carrier except to the extent a contract exists such as when the services of Tranzact are used through the Freedom Logistics Network. Where there is no contract, deregulation eliminated the duty of motor common carriers to file tariffs with a governmental agency. However, this did not eliminate tariffs in the sense historically understood in the transportation business. Tariffs are nothing more than a common reference guide for determining the nature of service and the price for that service. There are three basic types of rate tariffs. There are class rate tariffs, commodity rate tariffs and exception tariffs where rates will be scheduled. There are rules tariffs setting out charges for specific services and accessorial charges will be found in those tariffs. There are classification tariffs that classify the commodities for the class rate tariffs based on transportation characteristics. There are mileage tariffs that provide distances between points upon which the rate is established. The differing types of tariffs for motor carriers suggest some matters common to all carriers such as mileage. This is true and these tariffs are still filed and observed under antitrust exemptions. The two major tariffs of this type are the classification tariff and the mileage tariff. Except for those tariffs, the deregulation act still requires motor common carriers to maintain what motor carriers still call tariffs but the tariffs are not filed with any governmental agency. However, a shipper has a right to see those “tariffs.” Specifically, the statute says,
So, in summary, tariffs still exist. Government regulation still exists in the area and this regulation even provides certain shipper rights as shown above. But prices are subject to the market place and if you are not sure as the status, you should seek professional advice. |
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These are general discussions only, and are not to be considered legal advice or consulting. <So, What's your question? |
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