DC Velocity - February 2017

www.dcvelocity.com FEBRUARY 2017 DC VELOCITY 43 discover that many shipments, such as those arranged by brokers and other third parties, still move subject to the uniform bill of lading, the group said.

Brent Primus, a Minneapolis-based attorney who represents shippers, brokers, and a handful of carriers, said in a phone interview that a carrier is unlikely to negotiate contracts outside the scope of the uniform bill unless a customer tenders at least $1 million worth of freight a year. Even deep-pocketed shippers with the power to negotiate separate contracts often find that carriers don’t want to deviate from language contained in the uniform bill, Primus said.

Primus said NMFTA is acting as a prudent steward of its members’ interests by attempting to limit their collective liability exposure and push more of the responsibility onto the shippers. “From their point of view, it is smart business practice,” he said.

Blubaugh of the Benesch law firm said the new rules will
widen the divide between large, sophisticated shippers that
negotiate contracts that supersede the uniform bill of lading
or carriers’ tariffs, and shippers that operate on a transac-
tional basis—or largely in the non-contractual, or spot,
market—and who rely on the uniform bill as their contract
of carriage. The latter group “would have to change their
contract management and administration in significant
ways” to migrate toward nonstandard contracts, Blubaugh
said in an e-mail.

Shipper and broker groups contend that last summer’s actions are another step in NMFTA’s efforts to tilt the playing field toward its members. In 2014, the association decreed that disputes relating to loss and damage claims as well as rates and charges for shipments subject to the terms of the uniform bill be submitted to arbitration instead of litigated in court. Meanwhile, most major carriers have added a provision to their tariffs barring class actions of any type. Critics contend that few shippers have the knowledge or the resources to challenge the association’s actions, given the arbitration provisions and the tariff language barring class actions, both of which inhibit shippers’ ability to muster a legal challenge.

Primus said the changes to the uniform bill of lading, in aggregate, amount to what lawyers refer to as a “contract of adhesion,” defined as a standard contract drafted by the side with stronger bargaining power and generally accepted by the weaker party because it has no leverage to negotiate modifications. There will be few shippers with the clout to resist the NMFTA’s contractual changes now in effect, he added.