B-92523, JUN 28, 1960

B-92523, JUN 28, 1960

TO MR. C. H. MCCALL, SECRETARY OF COMMITTEES, AIRLINE FINANCE AND ACCOUNTING CONFERENCE:

ON BEHALF OF YOUR MEMBER AIR CARRIERS, YOU HAVE SUBMITTED FOR OUR APPROVAL A PROPOSAL WHICH CONSTITUTES A DEPARTURE FROM THE PRESENT REGULATIONS GOVERNING THE DOCUMENTARY SUPPORT FOR BILLS FOR TRANSPORTATION CHARGES WHERE THE ORIGINAL GOVERNMENT BILL OF LADING IS LOST OR DESTROYED. WE HAVE CAREFULLY CONSIDERED YOUR PROPOSAL IN THE LIGHT OF REPORTS FURNISHED US BY INTERESTED GOVERNMENT SHIPPING AGENCIES.

UNDER PRESENT PROCEDURES, A CARRIER'S BILL FOR FREIGHT CHARGES MUST BE SUPPORTED BY THE ORIGINAL GOVERNMENT BILL OF LADING, PROPERLY EXECUTED BY THE CONSIGNEE TO SHOW DELIVERY IN GOOD ORDER AT DESTINATION (5 GAO 3025.10 (1) ). IF THE ORIGINAL GOVERNMENT BILL OF LADING IS LOST OR DESTROYED AT ORIGIN, EN ROUTE, OR AT DESTINATION, THE BILL FOR CHARGES MUST BE SUPPORTED BY A CERTIFICATE IN LIEU OF LOST GOVERNMENT BILL OF LADING WHICH MUST BE OBTAINED FROM THE CONSIGNEE (5 GAO 3045.10, 3045.15), OR FROM THE ISSUING OFFICER (5 GAO 3045.20). YOUR PROPOSAL IS THAT, IN SITUATIONS WHERE THE ORIGINAL GOVERNMENT BILL OF LADING IS LOST AND REASONABLE EFFORTS TO OBTAIN A CERTIFICATE IN LIEU HAVE BEEN UNSUCCESSFUL, THE AIR CARRIER BE ALLOWED TO SUPPORT THE BILLING WITH (1) A MEMORANDUM COPY OF THE GOVERNMENT BILL OF LADING; (2) THE ORIGINAL DELIVERY RECEIPT SIGNED BY THE CONSIGNEE OR HIS AGENT; AND (3) A CERTIFICATE OF THE BILLING CARRIER IN LIEU OF ORIGINAL GOVERNMENT BILL OF LADING, AS SET OUT IN EXHIBIT B TO YOUR LETTER.

YOU STATE THAT INCIDENCE OF LOST GOVERNMENT BILLS OF LADING IS HIGH AND THAT THE PROCUREMENT OF CERTIFICATES IN LIEU IS COSTLY AND TIME CONSUMING, BOTH TO THE CARRIERS AND TO THE GOVERNMENT. THIS CONDITION IS SAID TO EXIST BECAUSE THE CONSIGNEES ARE GENERALLY UNABLE TO ISSUE CERTIFICATES IN LIEU DUE TO LACK OF ACCESS TO FORMS AND RECORDS; THEY MUST BE OBTAINED FROM THE ISSUING OFFICERS, TRANSMITTED, OFTEN MANY MILES, TO THE CONSIGNEES FOR SIGNATURE, AND THEN RETURNED TO THE BILLING CARRIERS. SOME OF THE DIFFICULTIES ENCOUNTERED STEM FROM CONDITIONS IMPOSED UPON THE DELIVERING CARRIERS. FOR EXAMPLE, YOU REPORT THAT AT MANY INSTALLATIONS, THE PROPERTY IS REQUIRED TO BE DELIVERED AT ONE POINT AND THE ORIGINAL GOVERNMENT BILLS OF LADING AT ANOTHER POINT, WITH CONCOMITANT DELAY IN REGARDING POSSESSION OF THE BILLS OF LADING OR, FREQUENTLY, WITH LOSS OF THE BILLS OF LADING EN ROUTE. YOU INDICATE THAT THE PRINCIPAL IMPEDIMENT TO PROMPT AND ORDERLY ACCOMPLISHMENT AND RETURN OF THE BILLS OF LADING, HOWEVER, SEEMS TO STEM FROM THE FAILURE OF ADMINISTRATIVE PERSONNEL TO RECOGNIZE THE IMPORTANCE OF THE DOCUMENT, BOTH TO THE GOVERNMENT AND DELIVERING CARRIERS. YOU CITE THESE EXAMPLES: AFTER SIX MONTHS OF FRUITLESS EFFORT TO SECURE ACCOMPLISHED ORIGINAL GOVERNMENT BILLS OF LADING FROM ONE MILITARY INSTALLATION, THEY WERE LOCATED, UNACCOMPLISHED, IN THE DESK OF THE TRANSPORTATION OFFICER, HAVING BEEN LEFT THERE BY HIS PREDECESSOR; AT ANOTHER INSTALLATION, IT WAS DISCOVERED THAT THE MISSING BILLS OF LADING HAD BEEN FORWARDED TO, AND RETAINED BY, AN AIRLINE OTHER THAN THE DELIVERING CARRIER.

IN B-92523, OCTOBER 5, 1951, TO THE AIRLINE FINANCE AND ACCOUNTING CONFERENCE, WE AUTHORIZED, AS TO INTERNATIONAL AIR SHIPMENTS, THE FOLLOWING DEPARTURE FROM THE PRESCRIBED BILLING PROCEDURES: THE LAST AMERICAN FLAG CERTIFICATED AIRLINE, OPERATING FROM A POINT IN THIS COUNTRY AND TRANSPORTING THE SHIPMENTS FROM THE UNITED STATES TO AN OVERSEAS DESTINATION, MIGHT PRESENT A BILL FOR THE THROUGH TRANSPORTATION CHARGES, SUPPORTED BY THE UNACCOMPLISHED GOVERNMENT BILL OF LADING OR CERTIFICATE IN LIEU THEREOF, ACCOMPANIED BY A DELIVERY RECEIPT SIGNED BY THE CONSIGNEE AND A CERTIFICATE OF THE BILLING CARRIER IN LIEU OF A WAIVER FROM THE DELIVERING CARRIER. BOTH OF THE LATTER DOCUMENTS WERE REQUIRED TO BE IN A SPECIFIED FORM. IN B 92523, MAY 5, 1954, THIS VARIATION WAS EXTENDED TO ALL MEMBERS OF THE INTERNATIONAL AIR TRANSPORT ASSOCIATION, INCLUDING FOREIGN FLAG CARRIERS, OPERATING FROM POINTS IN THIS COUNTRY AND TRANSPORTING THE SHIPMENTS FROM THE UNITED STATES. IN VIEW OF THESE MODIFICATIONS, WHICH PERMIT RETENTION OF THE ORIGINAL GOVERNMENT BILLS OF LADING, IN THIS COUNTRY BY THE BILLING AIRLINE AND WHICH, THROUGH USE OF THE SIGNED DELIVERY RECEIPT, OBVIATE THE NECESSITY FOR SECURING THE OVERSEAS CONSIGNEE'S SIGNATURE ON THE GOVERNMENT BILL OF LADING, WE PRESUME THAT THE PROBLEMS YOU CITE DEAL PARTICULARLY WITH DOMESTIC AIR TRAFFIC, RATHER THAN INTERNATIONAL AIR TRAFFIC.

THE LOST GOVERNMENT BILL OF LADING PROBLEM IS NOT PECULIAR TO THE AIRLINES. A SURVEY OF PAYMENTS OF ARMY AND AIR FORCE TRANSPORTATION ACCOUNTS FOR ONE DAY SHOWED THE AVERAGE INCIDENCE OF CERTIFICATES IN LIEU TO BE 1.4 PERCENT, WITH THAT FOR AIR TRAFFIC SLIGHTLY HIGHER THAN FOR MOST OTHER MODES OF TRANSPORTATION, BUT ONLY HALF AS HIGH AS THAT FOR WATER TRANSPORTATION. THE DEPARTMENT OF THE NAVY HAS REPORTED THAT APPROXIMATELY 1 PERCENT OF ITS TRANSPORTATION PAYMENTS FOR THE CALENDAR YEAR 1959 WERE MADE ON CERTIFICATES IN LIEU; IN THE SAME CALENDAR YEAR, APPROXIMATELY 2.7 PERCENT OF THE STATE DEPARTMENT'S PAYMENTS WERE MADE ON CERTIFICATES IN LIEU; OF THESE, NEARLY ONE HALF WERE ISSUED TO MOTOR CARRIERS AND ABOUT ONE THIRD TO AIR CARRIERS. WHILE STATISTICS HAVE NOT BEEN FURNISHED US BY ALL OF THE GOVERNMENT SHIPPING AGENCIES, WE BELIEVE THIS SAMPLING IS SUFFICIENT TO SHOW THAT, AT PRESENT, THE INCIDENCE OF LOST OR DESTROYED GOVERNMENT BILLS OF LADING IS NOT OF SUFFICIENT MAGNITUDE TO WARRANT, FOR EITHER AIR OR OTHER TYPES OF CARRIERS, THE DEPARTURE FROM THE PRESCRIBED BILLING PROCEDURES WHICH YOU PROPOSE. NOTE, ALSO, THAT YOUR PROPOSAL INCLUDES NO DEFINITE STANDARD OR CONTROL FOR DETERMINING WHEN "REASONABLE EFFORT" TO OBTAIN THE ORIGINAL BILL OF LADING OR A CERTIFICATE IN LIEU HAS BEEN EXHAUSTED, SO THAT, APPARENTLY, THE DETERMINATIONS WOULD BE MADE UNILATERALLY BY THE CONCERNED AIR CARRIER. WE TAKE THE VIEW THAT SUCH WIDE LATITUDE IN THIS AREA WOULD NOT BE CONDUCIVE TO THE EXERCISE OF PROPER CARE AND DILIGENCE IN HANDLING GOVERNMENT SHIPPING DOCUMENTS EITHER BY CARRIER OR BY GOVERNMENT PERSONNEL. FURTHER, ADOPTION OF YOUR PROPOSAL WOULD REQUIRE DEVELOPMENT AND INAUGURATION OF A SEPARATE SET OF CONTROLS TO AVOID DUPLICATE PAYMENTS AND PROBABLY WOULD GIVE RISE TO DEMANDS THAT THE PROCEDURE BE EXTENDED TO OTHER TYPES OF CARRIERS WHICH SUFFER EQUALLY, AND IN SOME CASES MORE, FROM THE PROBLEMS GENERATED BY LOSS AND MISHANDLING OF GOVERNMENT BILLS OF LADING.

THE SITUATIONS YOU HAVE DESCRIBED CALL FOR PREVENTIVE MEASURES RATHER THAN REVISION OF EXISTING PROCEDURES FOR THE BENEFIT OF ONE CLASS OF CARRIERS, SINCE THE BASIC FAULT SEEMS TO LIE, NOT WITH THE PROCEDURES PRESCRIBED, BUT A LACK OF DILIGENCE AND CARE IN OBSERVING THEM. THE MILITARY DEPARTMENTS, WHEN APPRISED OF THE AIRLINES' COMPLAINTS IN OUR REQUEST FOR REPORTS ON YOUR PROPOSAL, HAVE INDICATED THAT THEY WILL PROMPTLY REMIND THEIR TRANSPORTATION ACTIVITIES OF THE APPROPRIATE REGULATIONS AND THE NECESSITY FOR STRICT COMPLIANCE THEREWITH. WE BELIEVE THAT THIS TYPE OF EFFORT TO REMOVE CONFUSION AS TO THE HANDLING OF ESSENTIAL DOCUMENTS IS ONE OF THE BEST OVERALL REMEDIES, AND WE SUGGEST THAT WHENEVER YOUR MEMBERS ENCOUNTER PROBLEMS SUCH AS YOU DESCRIBED IN THEIR EFFORTS TO SECURE PROPERLY ACCOMPLISHED GOVERNMENT BILLS OF LADING OR CERTIFICATES IN LIEU, THEY SUBMIT TO THE HEAD OF THE GOVERNMENT AGENCY CONCERNED A WRITTEN PRESENTATION OF THE FACTS, SO THAT THE MATTER MAY BE INVESTIGATED AND CORRECTED. WE ASSUME, OF COURSE, THAT THE AIR CARRIERS WILL CONTINUE TO GUARD AGAINST THE MISHANDLING OF GOVERNMENT BILLS OF LADING WITHIN THEIR OWN ORGANIZATIONS.

IN SUMMARY, WE BELIEVE THAT SUFFICIENT MODIFICATION OF THE BILLING PROCEDURES HAVE ALREADY BEEN AUTHORIZED IN INTERNATIONAL AIR FREIGHT TRAFFIC AND THAT AS TO DOMESTIC AIR FREIGHT TRAFFIC, WE ARE NOT CONVINCED ON THE BASIS OF PRESENT INFORMATION AND DATA THAT A PROBLEM EXISTS IN THIS AREA SO GREAT THAT IT CANNOT BE CORRECTED INTERNALLY AND THUS PRESERVE THE INTEGRITY OF THE PRESENT BILLING PROCEDURES.