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Changes to terms and conditions on the bill of lading made final

Liability, burden of proof for losses, and Carmack Amendment affected

Posted January 13, 2017

The Surface Transportation Board (SBT) announced it will stand by an earlier decision to allow for changes to the Terms and Conditions stated on the back of the Uniform Straight Bill of Lading.

Background on decision

The changes were made on July 14, 2016, when the National Motor Freight Traffic Association (NMFTA) published a supplement in the National Motor Freight Classification (NMFC). NMFC 100-AP Supplement No. 2 became effective on August 13, 2016. Two trade groups representing shippers filed a Petition for Suspension and Investigation of the changes with the STB.

On August 12, 2016, the STB denied the groups’ request allowing the changes to take effect on August 13, 2016. However, STB stated it would take comments on the matter (if filed by September 12, 2016) to consider the matter further.

On January 10, 2017, STB stood by its initial decision and announced it will not make any further investigations into these changes as there is no basis to do so. Because this decision finds no basis for an investigation, the STB will not address parties’ arguments as to the substance of the amendments to the Uniform Straight Bill of Lading or the application of other general statutory provisions that do not confer investigatory authority to the Board. In other words, these changes will stay in effect, and the STB does not have make any further changes to them.

Overview of changes

The changes that went into effect on August 13, 2016, significantly alter the terms and conditions that govern most motor carrier transportation of goods within the United States that is not subject to contracts negotiated with the motor carriers. The face of the document that proves a business agreement exists between two parties to transport goods did not change.

One of the biggest revisions to this document is how the party responsible for any damage that may occur while the goods are in transit is determined. This change places the responsibility on the carrier shown on the bill of lading, rather than the one who is in possession of goods when they were lost or damaged. In addition, the new terms and conditions now place the burden of proof for loss or damage on the shipper rather than the carrier, as it had been for many years.

Also changed was the common law exceptions stated in the Carmack Amendment that no motor carrier is liable for any loss or damage that may occur due to:

  • An act of God;
  • An inherent nature or vice of the goods;
  • An act of the shipper;
  • An act of public enemy; or
  • The authority of law.

The recent changes add riots, strikes, and any related causes to this list.

Prior to these new terms and conditions, claims were to be filed within nine months after the delivery of the cargo, except claims for failure to make delivery, which must be filed within nine months after a reasonable time for delivery has elapsed. The new language simply states the claims must now be filed for failure to make delivery within nine months from the date of the bill of lading.

Also, new language published in these changes now makes it allowable for a carrier to limit its liability by publishing any limitations it chooses in its tariff. This differs from the old language that stated the limitations of liability would apply if the cargo value had been stated by the shipper or had been agreed upon in writing as the released value.

As it is in the “real world,” many shippers, and their attorneys, have never read the terms and conditions stated on the back of the bill of lading. However, these changes significantly alter the carrier’s liability for loss and damage, delay, and time limits for filing claims and now place it firmly on the shipper.

This article was written by Robert Rose of J. J. Keller & Associates, Inc.

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