B-238611, Feb 20, 1991, 90-2 CPD 189

B-238611, Feb 20, 1991, 90-2 CPD 189

PROCUREMENT - Payment/Discharge - Shipment - Carrier liability - Amount determination DIGEST: Where some items in a Department of Defense-unique, Freight All Kinds, shipment are damaged, the carrier's liability is determined by applying the released value of $2.50 per pound per commodity to the shipment's total weight, not just to the weight of the damaged items, pursuant to the carrier's tender and the Military Traffic Management Command's Freight Traffic Rules Publication No. 1A.

Yellow Freight System, Inc.:

Yellow Freight System, Inc., claims reimbursement of $955.31 as excessive offset from its revenues by the Department of the Air Force to satisfy a claim for damages to a Government Bill of Lading (GBL) shipment. /1/ Yellow Freight contends that the amount offset was excessive because it was based on the weight of the entire shipment, not on the weight of the damaged items only. We sustain the Air Force's action.

In March 1988, Yellow Freight transported three pallets of work stations weighing 825 pounds from Bergstrom Air Force Base, Texas, to Plattsburgh Air Force Base, New York. The shipment, which was damaged in transit, was described in the accompanying GBL as Freight All Kinds (FAK), with the Department of Defense unique classification number 999913-01. The shipment was governed by the Military Traffic Management Command's Freight Traffic Rules Publication No. 1A (MFTRP 1A), effective July 1, 1987, under which Yellow Freight had promulgated a tender that fixed the released value for FAK (999913-01) at $2.50 per pound per commodity.

Yellow Freight does not dispute liability, but believes that such liability should be determined by multiplying the released value by the weight of the damaged units, approximately 480 pounds. The Air Force contends that maximum liability should be based on the weight of the entire shipment because the entire shipment was one commodity, namely FAK (999913-01). /2/

The released value stipulated in Yellow Freight's tender was on a per- pound, per-commodity, basis, as authorized by Item 190 of MFTRP 1A. Paragraph 7 of Item 190 provides:

"In determining carrier liability for loss/or damage according to the released value provisions in this publication ... the word 'article' is synonymous with 'commodity', and means each commodity is a shipment. the event of loss and/or damage to a portion of a shipment, the amount recoverable shall be the released value ... multiplied by the gross shipping weight of each commodity involved, but no more than the loss or damage actually sustained."

Item 116 defines FAK (999913-01) as a single "Tender commodity description" that includes the individual commodities in the FAK shipment, which themselves are not to be further described. This characterization is consistent with the essential purpose of an FAK designation, which is to allow the government to secure a single rate on numerous diverse articles, thereby avoiding the need to classify the articles shipped to calculate a separate rate for each. See Consolidated Freightways, Inc., B-234217, Oct. 25, 1990. In this regard, we note that the Military Traffic Management Command revised Item 190 effective June 1989 to make it clear that FAK (999913-01), as well as other specified Defense-unique FAK shipments, "shall be considered a single commodity in determining carrier liability."

Since only one commodity was involved in this shipment, namely FAK (999913-01), the amount recoverable is the released value multiplied by the gross shipping weight of that one commodity, 825 pounds. Accordingly, we sustain the Air Force's settlement.

/1/ GBL C-3,531,591.

/2/ The Air Force offers a letter dated June 24, 1988, from the General Counsel, National Motor Freight Traffic Association, Inc., to the Executive Director, National Freight Claim and Security Counsel, to support the agency's view.