Stop the Changes to the Uniform Straight Bill of Lading that Threatens all Shippers

The recent changes to the Uniform Straight Bill of Lading by the National Motor Freight Traffic Association (NMFTA), if allowed to remain in effect, will make it virtually impossible for shippers to recover claims filed against carriers for lost or damaged shipments.

The NMFTA, which publishes the National Motor Freight Classification (NMFC), modified the terms and conditions of the bill of lading forms in the NMFC– the Uniform Straight Bill of Lading, and the Straight Bill of Lading Short Form, as well as the NMFC rules in Item 360 - Bills of Lading, Freight Bills and Statements of Charges.

Under the original rules established by virtue of the Carmack Amendment, carriers are strictly liable for loss or damage of goods - even if they were not negligent in any way – subject to five exceptions, Act of God, the public enemy, the authority of law,  inherent vice of the goods, or act or default of Shipper. Therefore, it was the carrier’s responsibility to prove that the loss or damage was caused by one of these exceptions.  If the carrier was successful in proving that the loss or damage was caused by one of these limited exceptions, then the carrier had the additional burden of proving that it was free from negligence (i.e., that the carrier’s negligence did not somehow contribute to the loss).

However, under the new bill of lading terms and conditions established by NMFTA, the carrier is not liable for the loss or damage of the goods unless its actions are proven to be negligent. What’s more, the burden of proof for this negligence is shifted to the shipper!

Here is the exact wording of the two versions of the bill:

Section 1 (b) of the "old" bill of lading:

(b) No carrier shall be liable for any loss or damage to a shipment or for any delay caused by an Act of God, the public enemy, the authority of law, or the act or default of shipper. Except in the case of negligence of the carrier or party in possession, the carrier or party in  possession shall not be liable for  loss, damage or delay which results: when the property is stopped and held in transit upon request of the shipper, owner or party entitled to make such request; or from faulty or impassible highway, or by lack of capacity of a highway bridge or ferry; or from a defect or vice in the property; or from riots or strikes. The burden to prove freedom from negligence is on the carrier or the party in possession.

Section 1 (b) of the "new" bill of lading:

(b) No carrier shall be liable for any loss or damage or for any delay caused by an Act of God, the public enemy, the authority of law, the act or default of the shipper, riots or strikes, or any related causes. Except in the case of negligence of the carrier, the carrier shall not be liable for loss, damage or delay which results: when the property is stopped and held in transit upon request of the shipper, owner or party entitled to make such request; or from faulty or impassible highway, or by lack of capacity of a highway, bridge or ferry; or from a defect or vice in the property. The burden to prove carrier negligence is on the shipper.

The Transportation and Logistics Council illustrates the clear issues with this:

The reasoning for not requiring the shipper to prove negligence is obvious.  When the shipper tenders his goods to the carrier he doesn't "ride shotgun" with them.  He has no way to know what the carrier does with the goods, so it would be virtually impossible for the shipper to prove that the cause of the loss or damage was the carrier's "negligence".

Some examples of what the change will mean:

  • Shipper's goods are damaged when trailer is involved in an accident. Now the shipper would have to prove that the carrier's driver negligently caused the accident.
  • Shipper's goods are stolen, or trailer is hijacked. Now the shipper would have to prove the carrier's driver was negligent, e.g., for failing to adequately protect the goods from theft by a third party while making a delivery or at a truck stop.
  • Shipper's goods are damaged by fire, water, noxious odors, insects or vermin, etc. Now the shipper would have to prove that the damage was caused by the carrier's negligence.

These amendments to the bill of lading will significantly impact you if they are allowed to remain in effect. Nearly all motor carriers that provide LTL and/or TL services in the US are covered by usage of the NMFC and the Uniform Straight Bill of Lading. The Transportation and Logistics Council estimates that this issue will affect 90% of freight moving by truck in the United States.

Even if a shipper wants to use its own bill of lading, it must still comply with the new freight liability rules and burden of proof requirements in Section 1 (b):

Sec.1 (h) Consignors may elect to furnish their own bills of lading, provided all requirements of Sec.1 (a) through Sec. 1 (c) and Sec.2 of this Item are observed (see Note 1). (See also, 49 U.S.C. Sections 80110, 80111 and 80113.)

This change is completely contrary to the Carmack amendment and it must be stopped. According to FBI estimates, losses cost shippers roughly $10 billion per year. If these changes are allowed to remain in effect, that number will increase dramatically.

As shippers and freight brokers, we need to band together and stop this grossly unconscionable change of the “rules of the road”. Take action now:

  • Put your attorney or legal department to work lobbying against these changes
  • Forward this bulletin to your clients, suppliers, and partners
  • Write to the Surface Transportation Board at the address below to express your concern

Chief, Section of Administration
Office of Proceedings
Surface Transportation Board
395 E. Street, SW
Washington, DC 20423

And refer to:
Docket Number ISM 35008
Transportation and Logistics Council
Petition for Suspension and Investigation NMFC 100-AP Supplement 2

We thank you in advance for your help in stopping this outrageous change.

Sincerely,

Joe Celestina, TranSolutions Inc.

Additional Resources

For more information, please consult the following resources:

General Information:

TLC’s first special report on the NMFTA changes
TLC’s second special report on the NMFTA changes

Progress on movements against the change:

TLC Petition for Suspension and Investigation
NASSTRAC Reply in support of TLC
STB Decision