B-165829, JUN. 17, 1969

B-165829, JUN. 17, 1969

TO NAVAJO FREIGHT LINES, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 13, 1968, AND MAY 6, 1969, YOUR FILE 25837, ASKING FOR REVIEW OF SETTLEMENT TK-879577, DATED NOVEMBER 8, 1968, WHICH DENIED YOUR CLAIM FOR REFUND OF $699.24, IN CONNECTION WITH A SHIPMENT MOVING UNDER BILL OF LADING D-5746570. THE SHIPMENT WEIGHED 19,205 POUNDS, MOVED FROM MEMPHIS, TENNESSEE, TO LATHROP, CALIFORNIA, VIA RED BALL MOTOR FREIGHT AND NAVAJO, AND WAS DESCRIBED IN THE BILL OF LADING AS "ONE SHIPMENT FREIGHT OF ALL KINDS.'

FREIGHT CHARGES IN THE AMOUNT OF $1,623, BASED ON A RATE OF $5.41 PER 100 POUNDS, APPLIED TO A MINIMUM WEIGHT OF 30,000 POUNDS, WERE BILLED AND PAID. THE RATE AND MINIMUM WEIGHT APPARENTLY WERE THOSE PROVIDED IN ITEM 4600, ROCKY MOUNTAIN MOTOR TARIFF BUREAU, INC; U.S. GOVERNMENT QUOTATION I.C.C. 19, APPLICABLE FROM MEMPHIS, TENNESSEE, TO POINTS IN CALIFORNIA SERVED BY NAVAJO, UNDER THE QUOTATION DESCRIPTION "FREIGHT, ALL KINDS.' THIS RATE APPARENTLY WAS NOT APPLICABLE VIA RED BALL MOTOR FREIGHT, THE CARRIER WHICH PICKED UP THE SHIPMENT.

IN THE AUDIT HERE, THE ALLOWABLE CHARGES WERE COMPUTED ON THE BASIS OF A RATE OF $4.81 PER 100 POUNDS, APPLIED TO THE ACTUAL WEIGHT OF THE SHIPMENT. THIS RATE APPLIED FROM MEMPHIS TO LATHROP, VIA RED BALL AND NAVAJO, AND WAS PUBLISHED IN ITEM 4620 OF THE QUOTATION, ALSO UNDER THE DESCRIPTION "FREIGHT, ALL KINDS.' WHEN YOUR COMPANY DECLINED TO REFUND THE RESULTANT OVERCHARGE, THE SUM OF $699.24 WAS DEDUCTED FROM REVENUE OTHERWISE DUE FOR OTHER SERVICES.

IN YOUR REQUEST FOR REVIEW, YOU POINT OUT THAT THE QUOTATION ITEM RELIED ON HERE CONTAINS A LIST OF CONTRABAND COMMODITIES UPON WHICH THE RATE NAMED IN THE ITEM WILL NOT APPLY. AND YOU ASK THAT WE IDENTIFY THE CONTENT OF THE LADING SO THAT YOU CAN DETERMINE WHETHER ANY CONTRABAND WAS INCLUDED IN THE SHIPMENT. AS ILLUSTRATIVE OF THE NEED FOR THIS INFORMATION, YOU REFER TO A SHIPMENT UNDER BILL OF LADING C-7852501 AS AN EXAMPLE OF AN INSTANCE WHERE INVESTIGATION OF THE CONTENTS OF THE LADING COMPELLED AN ADJUSTMENT IN THE FREIGHT CHARGES.

ITEM 4620 OF THE QUOTATION CONTAINED THE DESCRIPTION "FREIGHT, ALL KINDS" AND THE SHIPMENT IN QUESTION WAS DESCRIBED IN THE BILL OF LADING AS CONSISTING OF FREIGHT OF ALL KINDS. THIS DESCRIPTION WAS IN ACCORDANCE WITH RULE 360, SEC. 2 (C), OF NATIONAL MOTOR FREIGHT CLASSIFICATION A-9, ONE OF THE TARIFFS GOVERNING THE QUOTATION, WHICH READS, IN PERTINENT PART:

"TO INSURE THE ASSESSMENT OF CORRECT FREIGHT CHARGES AND AVOID INFRACTIONS OF FEDERAL AND STATE LAWS, SHIPPERS SHOULD ACQUAINT THEMSELVES WITH THE DESCRIPTIONS OF ARTICLES IN THE TARIFF UNDER WHICH THEY SHIP. COMMODITY WORD DESCRIPTIONS MUST BE USED IN SHIPPING ORDERS AND BILLS OF LADING AND MUST CONFORM TO THOSE IN THE APPLICABLE TARIFF. ***" AND SEC. 3 OF THE SAME RULE READS:

"WHEN CARRIER'S AGENT BELIEVES IT NECESSARY THAT THE CONTENTS OF PACKAGES BE INSPECTED, HE SHALL MAKE OR CAUSE SUCH INSPECTION TO BE MADE, OR REQUIRE OTHER SUFFICIENT EVIDENCE TO DETERMINE THE ACTUAL CHARACTER OF THE PROPERTY. WHEN FOUND TO BE INCORRECTLY DESCRIBED, FREIGHT CHARGES MUST BE COLLECTED ACCORDING TO PROPER DESCRIPTION.' THUS THE RULE REQUIRES A SHIPPER TO DESCRIBE HIS PROPERTY IN TERMS OF THE APPLICABLE TARIFF DESCRIPTION, SUBJECT TO THE CARRIER'S RIGHT OF INSPECTION OR RIGHT TO "REQUIRE OTHER SUFFICIENT EVIDENCE TO DETERMINE THE ACTUAL CHARACTER OF THE PROPERTY.' WHILE THE RULE DOES NOT EXPRESSLY SAY SO, IT SEEMS OBVIOUS THAT THE CARRIER'S RIGHT TO INSPECT THE PROPERTY OR TO REQUIRE OTHER EVIDENCE OF THE NATURE OF THE LADING MUST BE EXERCISED AT THE TIME OF SHIPMENT AND NOT MONTHS OR YEARS AFTER THE TRANSPORTATION HAS BEEN PERFORMED.

IN THE SUBJECT CASE, THE SHIPMENT WAS DESCRIBED IN TERMS OF THE APPLICABLE QUOTATION DESCRIPTION AND SO FAR AS THE RECORD HERE SHOWS WAS TRANSPORTED FROM ORIGIN TO DESTINATION WITHOUT ANY QUESTION BEING RAISED BY THE CARRIERS AS TO THE NATURE OF THE LADING. IN THESE CIRCUMSTANCES, WE BELIEVE THERE IS NO LEGAL OBLIGATION ON THE PART OF THIS OFFICE TO INVESTIGATE THIS SHIPMENT AT THIS LATE DATE IN ORDER TO DETERMINE, IF POSSIBLE, ITS ACTUAL CONSIST. AND WE BELIEVE ALSO THAT WE ARE ENTITLED TO RELY ON THE BILL OF LADING DESCRIPTION FOR SETTLEMENT OF THE FREIGHT CHARGES JUST AS NAVAJO DID WHEN IT BILLED FOR ITS CHARGES ORIGINALLY UNDER A RATE ALSO APPLYING IN CONNECTION WITH A "FREIGHT, ALL KINDS" DESCRIPTION.

ONE OF THE MAJOR ADVANTAGES TO SHIPPER AND CARRIER ALIKE IN THE USE OF "FREIGHT, ALL KINDS" (FAK) RATES IS THE ELIMINATION OF THE NECESSITY TO DESCRIBE AND RATE THE MANY AND VARIOUS ARTICLES COMPRISING MIXED-TRUCKLOAD SHIPMENTS. THIS ADVANTAGE WAS REFERRED TO BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF PUBLIC UTILITIES COMMISSION OF CALIFORNIA V UNITED STATES, 355 U.S. 534 (1958), AND APPARENTLY WAS AN IMPORTANT ELEMENT AFFECTING THE DECISION REACHED THERE. THIS ADVANTAGE OBVIOUSLY WOULD BE NEGATED IF OUR OFFICE WERE REQUIRED TO INVESTIGATE, LONG AFTER THE SHIPMENT HAD MOVED, EVERY FAK LADING REACHED IN THE AUDIT HERE OF GOVERNMENT TRANSPORTATION ACCOUNTS. FURTHERMORE, THE ADMINISTRATIVE BURDEN, NOT ONLY ON THIS OFFICE BUT ON THE SHIPPING AGENCIES AS WELL, WOULD BE OUT OF ALL PROPORTION TO ANY BENEFITS ACCRUING FROM THE USE OF FAK RATES. ANY QUESTIONS ABOUT FAK LADINGS SHOULD, IT SEEMS TO US, BE RAISED BY THE CARRIER'S AGENT AT THE TIME THE SHIPMENT IS ACCEPTED FOR TRANSPORTATION.

FINALLY, YOUR REFERENCE TO THE SHIPMENT UNDER BILL OF LADING C 7852501 AS ILLUSTRATIVE OF AN INSTANCE IN WHICH INVESTIGATION OF A FAK LADING REQUIRED ADJUSTMENT OF THE FREIGHT CHARGES SEEMS IRRELEVANT TO THE PROBLEM HERE. THE ADJUSTMENT IN THE FREIGHT CHARGES IN THAT CASE WAS NOT REQUIRED BECAUSE INVESTIGATION OF THE LADING DISCLOSED CONTRABAND ARTICLES BUT BECAUSE SUCH INVESTIGATION DISCLOSED A LOWER CHARGE BASIS THAN THE FAK BASIS WHEN THE ARTICLES COMPRISING THE SHIPMENT WERE RATED SEPARATELY.

FOR THE REASONS STATED, WE BELIEVE THE SETTLEMENT BASED ON THE "FREIGHT, ALL KINDS" RATE PROVIDED IN ITEM 4620 OF THE QUOTATION WAS CORRECT. SINCE YOU HAVE PRESENTED NO EVIDENCE THAT THE SHIPMENT IN QUESTION CONTAINED CONTRABAND ARTICLES, WE SUSTAIN THE SETTLEMENT AND, ACCORDINGLY, DENY YOUR CLAIM FOR REFUND OF THE DEDUCTION MADE TO RECOVER THE OVERCHARGE.