Date: Wed, 31 Dec 1997 20:47:04 GMT Server: WebSitePro/1.1h Accept-ranges: bytes Content-type: text/html Last-modified: Wed, 31 Dec 1997 20:47:04 GMT Content-length: 17680 Overweight Containers

 

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Overweight Containers

 

OVERWEIGHT CONTAINERS - THE "JENNY CRAIG" ACT? (4/97)

On the drawing boards for sometime, the question of how to deal with shipping containers which weigh more than highway limits allow was negotiated between the federal government and the shipping public in the context of implementation of the Intermodal Safe Container Transportation Act of 1992 (the Act), Pub.L. 102-548, 49 U.S.C. §5901 et seq. Agreement has now been reached, the law has been appropriately amended and the revised act takes effect on April 9, 1997.

In 1990 the Federal Highway Administration conducted a study of shipping documents only and concluded that over one-third of all ocean containers (over three (3) million) entering the U.S. weighed more than was legally allowed. [The actual number of problem shipments could be considerably less because there is a permit process allowing for the movement of some overweight goods. As well, some goods could have been reloaded in such a fashion as to become of legal weight.] For example, in California, Vehicle Code §35550 limits the weight on one axle to 20,000 lbs. and on any one tire to 10,500 lbs., subject to revision based upon the tire manufacturer's recommendations. It was perceived that unwitting truckers were picking up containers of cargo which would be overweight and then hauling those containers to destination. Often the trucker would be cited by local authorities because the weight of the combined truck, trailer and cargo exceeded the state's weight limit. Truckers complained that often they could not properly gauge the fact that a shipment was overweight until local law enforcement required the loaded rig to be weighed. At that point, it was too late to take appropriate action. Truckers received support for their position because the perception was that overweight shipments were causing damage to the American highway system.

The Act was signed on October 28, 1992 by then President Bush. The Dept. of Transportation was given 270 days to issue implementing regulations and did so on July 14, 1993.

In simple terms, the Act originally included every shipment with a gross cargo weight of more than 10,000 lbs. (container tare weight was excluded) and required that each such shipment had to be accompanied by a notice from the shipper or consolidator as to the approximate gross weight (including outer packing) of the shipment, along with an accurate description of the cargo. When the cargo was tendered to the motor carrier, the written certification had to be tendered as well and then had to pass from carrier to carrier as the shipment moved from origin to destination.

The fact that no certification was provided was itself actionable, as was trying to coerce a carrier to move a shipment without proper certification. If the information in the certification was false, the company issuing it could be fined and a lien could be placed against the cargo.

The way the Act works is a manufacturer, for example in Asia, selling a shipment to a New York importer would now have to certify the weight of his export shipment on a per container basis at the time it was given to the ocean carrier at the port of export. That steamship line would then have to transfer the written certification to its U.S. office where the cargo was taken off the vessel and that office, in turn, would have to provide the certification to the trucker who picked up the container once it was released by U.S. Customs.

As originally passed, the shipping public was concerned that the weight threshold was too low. The feeling was that too many shipments would be affected. In support of its position, one steamship line cited the fact that 90% of the shipments it transported would have to be accompanied by certifications and a goodly number of those shipments were not overweight. The other area of concern was the requirement that a "reasonable" description of the cargo had to be provided. In practice, the description on a steamship bill of lading corresponds to the carrier's freight rate description, e.g. electronic products. That description is then generally used throughout to describe the goods while they are transported. However, under the Act, it could become necessary to describe the shipment as, for example, computers, high definition t.v. sets, etc. The concern was that a "reasonable" description could lead to a greater likelihood of cargo theft, already a serious problem in some parts of the country.

The third and equally important area of concern was that the magic piece of paper had to accompany the shipment. The key here was not an objection to the need for certification but rather to the requirement that it be in paper form and accompany the shipment. The direction of international trade documentation is toward electronic data interchange. The Act's requirement for paper ran counter to that time honored trend. As a result, the trade recommended that shipments be able to travel without the certification. It was also observed that some cargo changes weight during transit due to accumulations of moisture and other weather consequences and there is no provision in the Act for such natural events.

As the result of these efforts, DOT agreed to delay the regulations and negotiations ensued. Technical amendments language was finally agreed upon and so in October 1996 the National Transportation Safety Board Amendments of 1996 - Intermodal Safe Container Transportation Amendments Act of 1996 was signed into law. See Pub. L. 104-291. In summary, it raised the weight threshold for certification to 29,000 pounds. It also allows a carrier to assume that no certification is required if one is not tendered at time of shipment receipt. However, if the first carrier is a trucker, notification of the weight and contents must first be made by telephone or electronically. [Outbound shipments are included under the Act, too.] The person preparing the certification is responsible for its accuracy and must be the party who is legally responsible for loading the container or trailer. Also if the cargo moved through various forms of surface transportation (e.g. rail and truck) but did so at the direction of one company, that company was not required to provide certification to itself. These revisions also make specific that the Act applies to foreign persons who tendered cargo for transport within the U.S.

Actual certification can now be provided directly on the shipping document (e.g. bill of lading) or it can be provided on a separate document but, if done separately, it must be specifically labeled as an "Intermodal Certification." Both forms can be transmitted electronically. Intermediaries are only responsible for the accurate transmission of information received from other sources. For example, if a bill of lading states the gross weight, a description of the contents, the container number and a date and shipper's name, it could constitute a weight (intermodal) certification which has to be forwarded to the trucker. Failure to forward the document could itself give rise to liability.

In effect, if the trucker has a certification which proves to be erroneous, a problem arises, if at all, because that driver is stopped while out on the road. Local law enforcement tickets the driver following a proper weighing. The trucker then has a lien on the cargo, except if perishable cargo is involved. Suppose you are the innocent importer who had no idea there was a weight problem and you are now faced with a several thousand dollar lien because your supplier failed to properly document the shipment. What are your options? Obviously you will end up reimbursing the trucker his fine in order to mitigate your damages. Then you end up trying to recover from your supplier. But if the supplier was honest at the outset, would you now be facing this problem?

What about if the trucker should have known the shipment was overweight (the equivalent of driving the family car as it sinks to the rear because of something very heavy in the trunk)? The Act provides that when the gross weight is known to exceed 29,000 lbs., the trucker must give appropriate notice to his driver. On the enforcement side, "political subdivisions" (e.g. states, counties, municipalities) are now given the authority to enact laws which allow the offending containers to be impounded until the fine or penalty has been paid by the proper party. DOT is allowed to impose fines of $500 per offense, up to $2,500. If there is a pattern of violations, the fine rises to $1,000 per violation, up to $10,000. If serious injury results, the fine may be $10,000 per offense without limitation. Individual employees may also be fined in an amount not to exceed $1,000 if they act with gross negligence or reckless disregard for safety.

As to the trucker's, the carrier is allowed to recover the amount of any bonds, fines, penalties, storage costs, interest and possibly even attorneys' fees.

The new law takes effect on April 9, 1997. Affected U.S. buyers would be wise to include a provision in their letters of credit and/or purchase orders requiring suppliers to provide an accurate weight certification on a per container basis as part of the routine set of documents required for each shipment. It would also be wise to have a written agreement with your regular truckers which includes a provision that all weight certifications will be forwarded through the chain of carriage. Otherwise, if one trucker forgets to give the certification to the next one and a fine is levied, the U.S. importer could end up having to pay the fine and be faced with seeking recovery from an errant trucker later in time.

 

OVERWEIGHT CONTAINERS (3/97)

On April 7, 1997 the recently revised Intermodal Safe Container Transportation Act takes effect. It applies to all motor carrier shipments where the gross weight of the cargo itself exceeds 29,000 lbs. It will apply to imports and exports alike. Each carrier transfers the written certification to the next one until the goods are delivered, although the certification may be transmitted electronically and does not actually have to accompany the shipment.

If a freight forwarder or customs broker prepares a certification, he is responsible for any inaccuracies. However, if the certification was prepared by the shipper or consolidator, the broker/forwarder’s only obligation is to convey it to the actual carrier. If no certification is provided, the trucker is allowed to assume none is required. If the first carrier is a trucker, initial certification must occur by telephone or electronically. The party preparing the certification must be the one who is legally responsible for loading the container or trailer.

Actual certification can be provided directly on the shipping papers or by a separate document; if the latter, it must be labeled "Intermodal Certification." The required information is the weight, a description of the contents, the container number and a date and shipper’s name. Failure to transmit the certification when it is required is itself a violation.

If incorrect information is provided and the trucker is cited, he has a lien on the cargo unless it is perishable. Trucking companies may not conceal weights from their drivers. States, counties and cities are permitted to write laws which allow overweight goods to be impounded until the fines/penalties are paid. Trucker’s liens includes the cost of any bonds, fines, penalties, storage costs, interest and possibly even attorneys’ fees. The Dept. of Transportation is also allowed to assess fines for violations.

Prudence dictates that U.S. importers should require foreign suppliers to provide accurate and complete weight certifications as part of their regular package of international documentation.

 

OVERWEIGHT CONTAINERS (8/96)

Regulations implementing the Intermodal Safe Container Act are currently scheduled to take effect on September 1, 1996. While there is a measure pending before Congress to revise it, Congress did not act before its summer recess. As a result, Transportation Secretary Peña has instructed the Federal Highway Administration to prepare a notice which will extend the effective date of the implementing regulations until January 2, 1997.

 

OVERWEIGHT RULES MAY BE STAYED

On September 1, 1996 the rules regarding documentation and liability for overweight containers are due to take effect. Under those new rules, any shipment of 10,000 lbs. or more has to have its weight certified by the shipper through a written confirmation. On July 16, 1996 a bill was introduced in the Congress which is intended to address what many consider the biggest problems with the new rules. S.1957 would raise the certification amount to 29,000 lbs. and allow carriers to presume a lack of certification means the gross weight is under 29,001 lbs. In this day of electronic communication, S.1957 also allows greater use of the electronic transmission of data. It is expected that efforts will be made to achieve quick enactment of this bill, although the Dept. of Transportation has inferred it will further delay the overweight container rules if S.1957 has not been approved by September 1, 1996.

 

Copyright © 1997 S.K. Ross & Assoc., P.C.