Mutual Distribution Solutions
“Solutions” is the word that must apply.
The approach that has worked, and will continue to work in the future, is a forum for open discussion. Experienced, executive-level participants from the shipper and carrier communities who are willing to air their problems openly and in a friendly atmosphere, without any hidden agendas, should discuss what solutions each group can contribute to the problems of carrying out the LTL distribution operation.
NASSTRAC and a group of representative carrier CEOs had a fruitful experience in jointly developing a bill of lading. The approach was complemented by using a “facilitator,” whose job it was to keep the discussions on track. There was no rancor in the discussions, even though shippers and carriers had individual concerns that had to be addressed in the final result. Each group was constructive in attempting to meld the solutions.
Following this work, American Trucking Associations referred the proposed bill of lading to the National Motor Freight Traffic Assn., with the directive that an ad hoc committee of National Classification Committee members and shippers be set up to continue the process and develop a version of the proposed product for publication in the National Motor Freight Classification. Once again, liability was a sticking point, in view of the pending DOT study and the varying views of what this study would recommend.
As was the case in the previous ad hoc committee, the participants agreed to disagree, except for including a Note 2 on liability that cited two paragraphs in the Interstate Commerce Commission Termination Act of 1995 addressing liability. Since the interpretation of the reference by shippers and carriers was at odds, the decision was made to leave the final interpretation of the liability provision up to the courts or seek legislative action based upon the recommendations of the DOT Cargo Liability Study. The cooperative approach worked in this case, as it will in the future, despite disagreement on a single issue.
One of the DOT recommendations in the Cargo Liability Study, issued in August, said the Carmack Amendment should remain unchanged until shippers and carriers could come to “agreement on an alternative liability regime.” DOT emphasized that both carriers and shippers have concerns, especially catastrophic loss protection on the part of carriers and adequate liability coverage ofshipments for shippers. The discussion noted that shippers carry a major portion of the risk of carriage for a variety of reasons.
However, the discussion did encourage shippers to consider cargo insurance.
Recommendations also addressed the bill of lading and the relationship between contracts and bills of lading. It was recommended that shippers and carriers establish a uniform bill of lading, containing minimum identifying information. And if the parties could not agree, it was recommended that DOT’s Federal Highway Administration should designate minimum requirements.
The DOT study underlines the need for a mutually cooperative approach to solve the problems with compromise acceptable to all. No single issue should be considered in isolation. The issues are inter-related, if not interdependent. Rates, classification, liability, service and cost have bearing on both sides in the problems. A collegial approach would consider these and any other factors that have an impact.
Partnership is a word that has been overused. Partnership is often one-sided. But true partnership is essential to produce the kind of environment that serves the welfare of both shippers and carriers. Cost control by carriers depends to a great extent upon cooperation from shippers. Many cost-saving techniques are heavily dependent on the way the shipper dispatches and receives freight. On the other hand, shippers depend on carriers to provide the kind of service they need to satisfy their customers at a price that permits them to be competitive in the marketplace.
While it may seem that a solution is impossible, in view of the competing concerns, nothing is impossible if a true spirit of cooperation permeates joint discussions.
Competing groups or competing interests cannot be permitted to flaw the process. Every effort should be made to ensure that both negotiating groups fully represent the community from which they are chosen. As indicated in the DOT study, a consensus position must be reached; otherwise solutions may be imposed. A successful future for the distribution community clearly lies in the direction of consensus and cooperation in developing solutions to mutual problems.
