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Wholesalers seek relief on transportation undercharges by shipping companies.

Wholesalers seek relief on transportation undercharges by shipping companies

National Beer Wholesalers Assn. (NBWA) president Ronald Sarasin called last week for a legislative solution to the problem of motor carrier rate undercharge liability currently facing a number of beer distributors. Sarasin testified at a hearing of the House Subcommittee of Surface Transportation, and submitted similar testimony to the Senate Commerce Committee, which is also looking into the problem.

"Beer wholesalers may not be experts in transportation law," Sarasin told the subcommittee, "but they know an injustice when they see one."

In virtually all instances of undercharging that have surfaced to date, Sarasin explained, the original transaction was based on a good-faith agreement between shipper and carrier. Billing for the alleged undercharge, he noted, occurred long after the service was performed and the original bill paid in full.

The problem, which affects other industry sectors besides beer wholesaling, stems from the fact that current federal law requires common carriers to charge only rates which they have filed with the Interstate Commerce Commission (ICC). Normally, when a carrier charges less, the discrepancy goes unnoticed. But in recent years, as a number of carriers have filed for bankruptcy, their receivers or trustees have spotted past instances where lower rates were charged and have filed collection actions seeking to recover the differences from the unsuspecting shippers.

In 1986, the ICC adopted a policy that granted relief to shippers in cases where such collection attempts were deemed unreasonable. But a June 21 U.S. Supreme Court decision ruled that such ICC action was invalid. In his testimony, Sarasin urged Congress to enact legislation which would restore the ICC's jurisdiction in such cases. Many beer wholesalers, he explained, use interstate common carriers to obtain beer from regionally-sited breweries. Such firms, he said, are good examples of how the "Catch 22" created by the undercharge issue has had a potentially devastating impact on small businessmen who are unfamiliar with terms like "unpaid tariff charges," and "filed rate doctrine."
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Title Annotation:beer wholesalers
Publication:Modern Brewery Age
Date:Jul 30, 1990
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