Transportation of Household Goods; Consumer Protection Regulations

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 375 and 377

[Docket No. FMCSA-97-2979]

RIN 2126-AA32; formerly RIN 2125-AE30

Transportation of Household Goods; Consumer Protection Regulations

AGENCY:

Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION:

Interim final rule; request for comments.

SUMMARY:

FMCSA is amending its regulations governing the interstate transportation of personal effects or property used, or to be used, in a private residence (household goods). Our regulations specify how motor carriers who transport household goods by motor vehicle in interstate commerce (movers) must assist their individual customers who ship household goods. We are updating the regulations to make them easier to understand and have made several changes designed to assist consumers. We seek additional public comment on the information collection requirements for this interim final rule. We will not enforce the information collection requirements of this interim final rule until we obtain approval for them from the Office of Management and Budget (OMB).

DATES:

Effective Date:

This interim final rule is effective on September 9, 2003.

Compliance Date:

Mandatory compliance with this interim final rule must begin on March 1, 2004.

Comment Date:

You must submit comments concerning the

information collection requirements

of this interim final rule on or before August 11, 2003.

If you submit copies of your comments to the Office of Management and Budget (OMB) concerning the

information collection requirements

of this document, your comments to OMB will be most useful if received at OMB by July 11, 2003. The OMB prefers to receive them by July 11, 2003, but you can submit them to OMB until August 11, 2003.

ADDRESSES:

You may submit comments identified by DOT DMS Docket Number FMCSA-1997-2979 by any of the following methods:

• Web Site:

http://dms.dot.gov.

Follow the instructions for submitting comments on the DOT electronic docket site.

• Fax: 1-202-493-2251.

• Mail: Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001.

• Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays.

• Federal eRulemaking Portal: Go to

http://www.regulations.gov.

Follow the online instructions for submitting comments.

Instructions:

All submissions must include the agency name and docket number or Regulatory Identification Number (RIN) for this rulemaking. Note that all comments received will be posted without change to

http://dms.dot.gov,

including any personal information provided. Please see the Privacy Act heading for further information.

Docket:

For access to the docket to read background documents or comments received, go to

http://dms.dot.gov

at any time or to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays.

Privacy Act:

Anyone is able to search the electronic form of all comments received into any of DOT's dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the

Federal Register

published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78). This statement is also available at

http://dms.dot.gov.

Comments to OMB:

If you submit copies of comments to the OMB concerning the

information collection requirements

of this document, you should mail, hand deliver, or fax a copy of your comments to: Attention: Desk Officer for the Department of Transportation, Docket Library, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, 725 17th Street, NW., Washington, DC 20503, fax: (202) 395-6566.

FOR FURTHER INFORMATION CONTACT:

Mr. Nathaniel Jackson, Household Goods Enforcement Team Leader, (202) 385-2423, Insurance Compliance Division (MC-ECI), FMCSA, Suite 600, 400 Virginia Avenue, SW., Washington, DC 20024.

SUPPLEMENTARY INFORMATION:

Background

In 1999 Congress authorized FMCSA to regulate household goods carriers engaged in interstate operations for individual shippers in the Motor Carrier Safety Improvement Act of 1999 (MCSIA) (Public Law 106-159, December 9, 1999, 113 Stat. 1749). The Interstate Commerce Commission (ICC) administered household goods regulations from 1940 to 1995. In the ICC Termination Act of 1995 (ICCTA) (Pub. L. 104-88), Congress terminated the ICC and transferred the household goods program to the Federal Highway Administration (FHWA) effective January 1, 1996. The FHWA administered the household goods program through its Office of Motor Carrier and Highway Safety. The regulations governing interstate household goods transportation are in 49 CFR part 375.

The FHWA published a notice of proposed rulemaking (NPRM) on May 15, 1998 (63 FR 27126) requesting comments on its proposal to update the household goods regulations. These regulations set forth regulatory requirements for moving companies who provide transportation for individual shippers. An individual shipper is generally a retired person or someone changing jobs. The individual shipper uses for-hire truck transportation services infrequently and may have little or no information about the regulations movers must follow and how they operate. This information may be essential in enabling a shipper to make informed decisions in selecting a mover and ensuring a satisfactory move.

On March 5, 2001, the General Accounting Office (GAO) released its report to Congressional Committees, “Consumer Protection: Federal Actions Are Needed to Improve Oversight of the Household Goods Moving Industry,” No. GAO-01-318. Section 209 of the MCSIA directed that GAO study the effectiveness of DOT's consumer protection activities for the interstate household goods moving industry and identify alternative approaches for providing consumer protection in the industry. A copy of the report is in the docket. The GAO findings on the FMCSA's household goods program included the following: (1) The Department of Transportation has done little to oversee the Household Goods moving industry; (2) Consumer education activities have been minimal; (3) The Department does not know the extent to which it has examined carriers' compliance with Household Goods rules; and (4) The Department

has not determined whether its level of enforcement is appropriate.

These regulations represent FMCSA's effort to provide a reasonable level of protection to consumers of household goods moves. Comments to the NPRM and FMCSA enforcement actions have established the need to address weaknesses in the system for movement of household goods. Given the volume and scope of household goods movements each year, FMCSA acknowledges that it cannot intervene in individual cases to assure consumers their desired result. With these regulations, FMCSA attempts to establish parameters of fair dealing for household goods movers and a reasonable level of protection for consumers. The agency seeks to equip consumers with information adequate to make informed decisions about moving their household goods.

Interim Final Rule: Request for Comments on Information Collection Requirements

When the FHWA published the NPRM on May 15, 1998 (63 FR 27126) requesting comments on its proposal to update the household goods regulations, it failed to send the package separately to OMB for its review of the information collection requirements. Because of this error, it is necessary to publish this document as an Interim Final Rule, rather than a Final Rule, to allow OMB time to complete its review and to allow the public additional time to submit comments on the information collection requirements. As described above under “

DATES:

Comment Date:

” OMB allows 60 days for public comment, but the rule becomes effective September 9, 2003, allowing time for FMCSA and OMB to resolve any concerns about the information collection requirements in this Interim Final Rule. For more information on FMCSA's analysis of the paperwork impact, see “Paperwork Reduction Act” later in this preamble.

Docket Comments

In response to the NPRM, the agency received 53 letters from 48 different individuals or entities. Twenty-four (24) letters did not comment on any specific aspect of the NPRM. Each of these 24 letters told of alleged abuses the authors had suffered in past moves of their own household goods. Each supported in general terms the goals of the NPRM to protect individual shippers.

The docket received substantive responses from the following entities:

Action Scale & Weighing Systems, Inc. (Action)

Air Weigh

The American Moving and Storage Association, Inc. (AMSA)

As a combined comment, the Attorneys General of Alabama, Arkansas, Arizona, Florida, Hawaii, Iowa, Idaho, Illinois, Indiana, Kansas, Massachusetts, Maryland, Missouri, New Jersey, Nevada, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Washington, Wisconsin, and West Virginia (25AG)

The Attorney General of Connecticut (AGCT)

Cat Scale Company (Cat)

The Commonwealth of Pennsylvania's Department of Agriculture

Deskin Scale Company, Inc. (Deskin)

The National Association of Consumer Agency Administrators (NACAA)

The Oklahoma Corporation Commission (OCC)

Sisson Scale and Equipment Co., Inc. (Sisson)

Starving Students

The State of California's Department of Agriculture

The State of Colorado's Department of Agriculture

The State of Idaho's Department of Agriculture

The State of Michigan's Department of Agriculture

The State of New Hampshire's Department of Agriculture

The State of Oregon's Department of Agriculture

The State of New York's Department of Transportation (NYDOT)

The University of Minnesota's Student Legal Services

Weighing Consultants, Inc. (WCI)

FMCSA will discuss each of the substantive comments in relation to the specific sections they addressed.

Section 375.101 Who Must Follow These Regulations?

AMSA objected to the use of the term “motor common carrier engaged in the transportation of household goods” in this section and Appendix A. AMSA notes the ICCTA deleted reference to “common” carriers. It refers to section 13102(12) of the ICCTA. AMSA believes the part 375 regulations should reflect the terms used in the ICCTA and we should strike the word “common” wherever it appears in connection with “motor carrier(s).”

Response to Comments

Although the ICCTA no longer includes a definition of “common carrier,” FMCSA is still registering household goods carriers subject to these regulations as “common” carriers, under the transitional rule of 49 U.S.C. 13902(d). However, FMCSA, in implementing the Uniform Carrier Registration System required by 49 U.S.C. 13908 expects to eventually eliminate the distinction between common and contract carriers in registering motor carriers. Consequently, we are adopting AMSA's suggestion by applying the regulations to for-hire motor carriers engaged in the interstate transportation of household goods for individual shippers.

Section 375.103 What Are the Definitions of Terms Used in this Part?

AMSA comments that the term “advertisement” is defined as “any communication to the public in connection with an offer or sale of any interstate transportation service.” It believes we should define this term more accurately in the context of part 375 by adding the words “household goods” before the word “transportation.” The revised definition would read as follows:

“Advertisement” means any communication to the public in connection with an offer or sale of any interstate household goods transportation service.

The AGCT comments that the proposed definition of “transportation of household goods” should include handling of a shipper's goods by the carrier or his agent, while loading at the point of pickup, unloading at the point of delivery, and all handling in between, whether in storage or in transit.

AMSA believes that FMCSA should change the regulatory definition “Transportation of household goods” by eliminating subparagraph (2), reading “Another party arranges and pays for the transportation of household goods.” AMSA believes this recommended change is also consistent with the clear intention of the original 49 CFR part 1056 (1995) regulations that restricted their application to transportation paid for by the householder, specifically referencing 49 CFR 1056.1(b)(1) (1995). AMSA comments that we should change the definition to read as follows:

“Transportation of household goods” means the householder (an individual shipper) arranges and pays for the transportation of household goods. This may include transportation from a factory or store when the individual shipper purchases the household goods with the intent to use the goods in his or her dwelling.

AMSA comments on the AGCT's comments, stating that it believes that such a change is not necessary. The definition of “Transportation” contained in 49 U.S.C. 13102(19) includes each of the services enumerated in the AGCT's recommendation and, for purposes of

these regulations, the statutory definition is controlling.

AMSA also comments about this section's definition of an “individual shipper or householder,” contending that it does not correspond to the definition of an individual shipper contained in 49 U.S.C. 13102(10)(A). It provides, in addition to owning the goods being transported, the individual shipper is also the party paying for the move. This “arranged and paid for by the householder” provision serves to distinguish moves on behalf of individual shippers from those paid for by national accounts “corporations” for their employees as identified in 49 U.S.C. 13102(10)(B). AMSA states that national account shippers differ from individual shippers in that orders for service are not required (purchase orders or other similar documents are frequently issued in lieu of orders for service). National accounts also often have relocation policies that conflict with or supersede certain requirements of the existing regulations. Since this is an important distinction, AMSA believes, it suggests we change the wording of this provision to accurately define an individual shipper as follows:

“Individual shipper or householder” means any person who is the consignor or consignee of a household goods shipment identified as such in the bill of lading contract, who also owns the goods being transported and pays the moving charges.

AMSA believes the agency should modify the definition of “reasonable dispatch” to make it clear that shippers are liable for charges related to additional services they request or require, as follows:

For example, if you deliberately withhold any shipment from delivery after an individual shipper offers to pay the binding estimate or 110 percent of a non-binding estimate, plus the costs for additional services that were performed en route or at destination which were necessary to complete the transportation, you have not transported the goods with reasonable dispatch.

Response to Comments

We agree with AMSA's suggestion to eliminate proposed subparagraph (2) from the definition of “transportation of household goods.” In the interim final rule we have combined the definitions for “household goods” and “transportation of household goods.” This is consistent with 49 U.S.C. 13102(10). We believe the AGCT recommendation regarding “transportation of household goods” could have an unintended consequence for many individual shippers. If the agency were to adopt its recommendation, a mover may be able to convince an individual shipper that a mover or its agents, and only a mover or its agents, could handle the shipper's goods for loading at the point of pickup, unloading at the point of delivery, and all handling in between whether in storage or in transit. Depending on how the individual shipper contracts for moving services, other companies or the shipper herself may perform the other services.

Movers and their agents perform many services, including what AMSA states on page 36 of its comments as “the precise requirements necessary to properly remove the contents of a residence, secure them in an over-the-road vehicle and effect delivery at the new residence” that “can result in additional services which, in turn, require the assessment of additional charges.”

The individual shipper may determine he/she wants to perform the additional services or have another party do them. Adopting the AGCT's comments may have the unintended consequence of having a disreputable mover claim to be the only entity that can handle the shipper's goods. FMCSA does not question that reputable movers and their reputable agents perform these extra services with value to the shipper, but the shipper may be on a tight budget, and the shipper may choose not to have the mover perform those “precise requirements necessary to properly” effect delivery.

We do not agree with AMSA's suggested change to the definition of “reasonable dispatch” because the change would imply that carriers could demand payment for additional services before delivery. Under this interim final rule, the most that a carrier could demand before delivery is 100 percent of a binding estimate or 110 percent of a non-binding estimate.

The agency has adopted AMSA's comments regarding the definition of “advertisement” and “individual shipper.” We also removed the exclusion of advertisements on radio and television from the definition and clarified that Yellow Pages advertising is included in the definition. FMCSA also has chosen to keep the definitions for “Commercial shipper” and “Government bill of lading shipper” the same as in the current rules. We are moving the definition of “Certified scale” from proposed § 375.507 to this section. Finally, we are adding new definitions to explain the terms “Tariff” and “Surface Transportation Board.”

Section 375.201 What Is My Normal Liability for Loss and Damage When I Accept Goods From an Individual Shipper?

The AGCT recommended the title of the section should be changed from “loss and damage” to “loss or damage” to clarify the differences between contractually agreed upon increases in the carrier's liability and the availability of insurance coverage. The AGCT believes we should require the carrier to disclose the limits of its liability in a clear, concise manner and preclude a carrier from characterizing contractually agreed upon increases in liability as “insurance.” AGCT also believes the rules should provide that a carrier may have additional liability if it sells excess liability insurance. It is unclear to AGCT whether the proposed rule used the term “excess liability insurance” as it is normally used in the insurance industry or as a term of art meaning insurance in excess of the carrier's liability as limited by its released rates. If FMCSA intended to define insurance in excess of the carrier's liability as limited by its released rates, AGCT recommends we should simply refer to it as “liability insurance.”

AMSA believes that the AGCT suggestion that we clarify language in § 375.201 to explain the difference between carrier liability under released rates orders (RRO) and the availability of excess liability insurance is unnecessary. Section 375.201 is directed to movers and AMSA believes we intended to restate the mover's understanding of the parameters of liability. AMSA believes movers do not require additional explanations along these lines to understand their liability.

AMSA comments that paragraph (a) of this section, which states the mover is legally liable for loss or damage occurring during the transportation of household goods, should be modified to eliminate confusion as to the full extent of a mover's liability. Proposed paragraph (a) reads as follows:

(a) In general, you are legally liable for loss or damage if it happens during performance of any one of the following three services identified on your lawful bill of lading:

(1) Transportation of household goods.

(2) Storage-in-transit of household goods, including incidental pickup or delivery service.

(3) Servicing of an appliance or other article, if you or your agent performs the servicing.

AMSA proposes revising paragraph (a) to read as follows:

(a) In general, you are legally liable for loss or damage if it happens during

performance of any transportation of household goods and all related services identified on your lawful bill of lading.

AMSA comments that paragraph (c) of this section provides that the mover may incur additional liability if it sells excess liability insurance. AMSA states when a mover arranges for the purchase of insurance and a shipment is transported under separate liability insurance, the mover's liability is specifically limited to 60 cents per pound per article. AMSA believes the regulations provide for no additional coverage by the mover unless the mover fails to issue a copy of the insurance policy or other appropriate evidence of insurance as explained in proposed § 375.303(h). Given these circumstances, AMSA recommends we delete this provision.

Response to Comments

We do not agree with AGCT's suggestion to change “loss and damage” in the title of the section to “loss or damage” because we believe the words are interchangeable and essentially mean the same thing. We agree with AMSA's comments on paragraph (a). By using the phrase “and all related services” we can eliminate subparagraphs (a)(1)-(a)(3). This clarifies that the mover has liability for any services offered in the bill of lading.

We are also adopting the AGCT's comments to change “excess liability insurance” to “liability insurance.” We agree with AGCT concerning the need for additional explanations regarding carrier liability in this section and have included appropriate language in § 375.201(d). We do not agree with AMSA's comments concerning paragraph (c). Paragraph (c) builds upon proposed § 375.303(h) by noting the full liability the carrier may be subject to if it fails to issue a copy of the insurance policy or other appropriate evidence of insurance as explained in proposed § 375.303(h). Thus, we are keeping the provision, but have added clarifying language concerning § 375.303(h) (§ 375.303(g) in this interim final rule).

In addition, FMCSA is replacing the reference in paragraph (b) to the 1993 released rates order with a more generic reference. This order was recently amended, effective May 12, 2002. Because Surface Transportation Board released rates orders may change over time, the regulations should not be date-specific in referencing such orders.

Section 375.203 What Actions of an Individual Shipper May Limit or Reduce My Normal Liability?

AMSA comments that paragraph (a) provides that the inclusion of perishable household goods in a shipment without notice to the mover relieves the mover of liability. It suggests that to comport with generally applicable tariff provisions that allow the mover to limit liability when perishables are disclosed and accepted for transportation, this provision should be expanded to include reference to hazardous and dangerous articles, as follows:

If an individual shipper includes perishable, dangerous or hazardous articles in the shipment without your knowledge, you need not assume liability for those articles or for the loss or damage caused by their inclusion in the shipment. If the shipper requests that you accept such articles for transportation, you may elect to limit your liability for any loss or damage by appropriately published tariff provisions.

AMSA believes paragraph (b), by including reference to units of weight and measure in metric terms with the Imperial equivalent expressed parenthetically, will prove unduly confusing to both individual shippers and the moving industry. It recommends that until such time as the metric system is more commonly recognized in the United States, the terms should be reversed, with the metric equivalent shown in parenthesis.

Response to Comments

We have adopted AMSA's comments concerning dangerous and hazardous articles. This change also comports with 49 CFR 175.25 concerning passengers transporting dangerous or hazardous materials in airline baggage and 18 U.S.C. 1716 and U.S. Postal publication number 52, July 1999 (available at

http://www.usps.com/cpim/ftp/pubs/pub52.pdf

and

http://www.usps.com/cpim/ftp/pubs/pub52.htm

) concerning hazardous, restricted, and perishable articles being proper for mailing. We have also placed a warning similar to § 175.25(a)(1) in Appendix A to part 375—Your Rights and Responsibilities When You Move (YRRWYM), noting that the mover may limit its liability for the transportation of such materials in household goods.

The National Institute of Standards and Technology (NIST) has advised FMCSA that we should primarily use SI (metric) measurements. The Omnibus Trade and Competitiveness Act of 1988 cites metric units before inch-pound units where both units appear together and places separate sections containing requirements in metric units before corresponding sections containing requirements in inch-pound units. In some cases, however, trade practice is currently restricted to the use of inch-pound units; therefore, some NIST requirements continue to specify only inch-pound units until the National Conference of Weights and Measures achieves a broad consensus on the permitted metric units. In accord with NIST policy, FMCSA will use trade practice until the National Conference on Weights and Measures achieves a broad consensus on the permitted metric units.

Section 375.205 May I Have Agents?

The AGCT comments that we should require disclosure of any agency relationships to a shipper. AMSA does not object to such a requirement since it is normal industry practice to explain agency relationships. In fact, subpart B of YRRWYM contains an explicit explanation that alerts shippers to the existence of these relationships.

Response to Comments

We note that requiring disclosure of any agency relationships to a shipper would subject us to additional information collection requirements of 5 CFR part 120 for that disclosure. We note the largest motor carriers have agents and transport the most household goods shipments. Since we explain in the YRRWYM that motor carriers may have agents and AMSA believes it is normal industry practice to make such disclosures, we believe it is not necessary to require a separate notice for shippers. We believe shippers have plenty of notice that agency relationships may exist and may ask about them. If a mover transports a shipment that used the services of an agent, and the agent acted upon, or omitted, items in its performance of such transportation, the shipper has the right to file a complaint with us against the motor carrier or the agent.

Section 375.209 How Must I Handle Complaints and Inquiries?

NACAA supports the requirement that movers maintain a procedure for handling complaints. The AGCT requested that FMCSA impose an explicit affirmative requirement upon a mover to respond promptly and appropriately to complaints by a shipper.

AMSA disagrees with the AGCT because:

* * * as the [AGCT] concedes, the proposed language contemplates that movers maintain internal systems that are responsive to shippers' complaints. The requirement that telephone numbers be furnished to shippers is sufficient to ensure ready access to the mover's system and, obviously, what may constitute an “appropriate” response is dependent upon the facts of each situation. This is not a matter that warrants a more explicit attempt to regulate.

Response to Comments

We believe it is sufficient to ensure ready access to the carrier's system by requiring a telephone number. As AMSA points out, what may constitute an “appropriate” response, and even a prompt response, is dependent upon the facts of each situation. We do not believe explicit regulation is warranted. We believe shippers are knowledgeable enough, and should be responsible enough, to inquire with better business bureaus and us if they are dissatisfied with a mover's complaint handling. Better business bureaus also monitor the number of and types of complaints businesses receive.

Section 375.211 Must I Have an Arbitration Program?

A majority of household goods complaints we receive involve loss and damage claims. The 24 individual shippers who submitted docket comments generally complain about the handling of their loss and damage claims rather than commenting directly about any particular aspect of the proposed rule or solutions to correct such problems. The ICCTA imposes an arbitration requirement for the handling of most loss and damage claims against interstate movers.

See

49 U.S.C. 14708. We proposed to amend the former “information for shippers” section of the regulations, formerly 49 CFR 375.2 (proposed § 375.213), to replace the required summary of the carrier's dispute settlement program with a summary of its arbitration procedures and results.

As we discussed in the NPRM, Congress established the arbitration system in the ICCTA to afford consumers a forum for resolving loss and damage claims arising from transportation of household goods and to replace the informal dispute resolution functions previously handed by the ICC. The ICC conducted the informal dispute resolution functions under its general authority to regulate movers, but did not have a specific statutory requirement to perform that function. The Congress wanted “private, commercial disputes to be resolved the way all other commercial disputes are resolved—by the parties.”

See

H.R. Rep. No. 104-311, at 87-88 (1995).

See also

pages 117 and 121. The MCSIA expanded the availability of arbitration by requiring that carriers provide arbitration, upon shipper request, for claims of up to $5,000 (as opposed to the $1,000 limit in the ICCTA). The GAO report also studied the roles of consumers in preventing and resolving disputes.

NACAA supports having movers maintain an arbitration program for loss and damage claims.

The Consumers Union recommends we require each mover give its arbitration information at the time an estimate is made rather than before executing an order for service.

The OCC believes arbitration should be expanded to include a format for alternative dispute resolution. Arbitration alone limits available dispute resolution means, and inasmuch as alternative dispute resolution enjoys widespread recognition, it would seem illogical to omit it.

The AGCT requests FMCSA require the mover to provide a fair and prompt process that is paid for by the mover. By requiring the mover to bear the cost of the arbitration, the mover has an incentive to resolve claims and arbitration proceedings in a timely manner.

The 25AG suggest modifying proposed § 375.211(a)(2) to include a paragraph (iv) to require conspicuous disclosure of the right to the information contained in § 375.211(a)(3). They believe that § 375.211(a)(2) and (b) are inadequate as disclosure requirements because they provide no guidance as to either the timing or manner of disclosure.

The 25AG also believe consumers need to know of their right to forego arbitration and pursue court action under 49 U.S.C. 14704. They claim that many movers refuse to participate in their own program or do so in a dilatory fashion. They recommend that we require arbitration be provided at a reasonable cost and at a reasonable location, without undue delay before a neutral independent third party. The arbitrator should be empowered to grant whatever relief would be available in court under law or in equity.

In AMSA's view, a requirement that all household goods carriers file annual arbitration reports would likely not be useful to consumers, itself, and the moving industry. AMSA disagrees that such reports would assist us in meeting our statutory responsibility to report to Congress regarding arbitration, and in providing individual consumers with relevant claims information.

Details regarding arbitration and the relative success or failure of the single program that represents virtually all movers are readily available from AMSA, it asserts. To assist us in meeting our statutory reporting requirements, AMSA stated that it sent reports to FHWA containing the results of its arbitration program, both in advance of the June 1997 due date of the FHWA report to Congress and after June 1997.

AMSA believes that the information contained in the periodic AMSA reports is sufficient. It believes we can use its reports to monitor the moving industry under 49 U.S.C. 14708(g). From a consumer standpoint, AMSA is not convinced that the requested claims handling information would provide consumers with meaningful claims data. Furthermore, it also is not convinced that individual consumers are interested in claims data when it comes to their selection of a mover. Consumers are more interested, AMSA believes, in whether the mover is properly licensed, has insurance, has a good professional reputation, and complies with the regulations. AMSA reported the industry has a claims frequency ratio of roughly 21 percent,

i.e.

, only one in every five shipments results in a claim. AMSA interprets this to mean that the proposed report would have no relevance to almost 80 percent of the consumer shippers whose shipments do not sustain loss or damage. It asserts that the incidence of arbitration is even less frequent. AMSA's experience is that less than one percent of all claims result in arbitration; thus more than 99 percent of the shipments transported will not become involved in the arbitration process.

From a technical standpoint, AMSA believes the proposed report only requires the reporting of the total number of shipments transported and the number of claims less than and over the statutory maximum for mandatory arbitration. It believes the meaning of our “total shipments” (all household goods shipments; only COD shipments, excluding civilian government, military and national accounts) is unclear, as is the “number of claims” (claims filed; claims paid, and so on). AMSA presumes that it would be left to consumers to try to calculate a claims frequency ratio from the data provided and, if they get that far, to compare their particular mover's frequency with that of other movers or with industry average data. Complicating this situation is the fact that some carriers encourage the use of arbitration, while others do not. Therefore, individual carrier data may be entirely misleading,

e.g.

, a high number of arbitration cases could be construed to mean the carrier has an unacceptable claims experience when precisely the opposite may be true since the number of arbitrations may bear no relation to the number of claims.

In addition, AMSA asserts that the language of the proposal makes it clear that FMCSA will be required to process and maintain over 2,000 carrier annual

reports in order to respond to consumer requests for information. Also, FMCSA would be required to allocate resources to answer consumer questions regarding the reports and compile aggregate statistics to be in a position to answer consumer questions regarding the importance and meaning of a given carrier's data. Consumers will be unable to make informed decisions regarding report data unless they know how specific carrier data compares to industry average data. All of this assumes that we have the necessary staff to collect, process, and disseminate more than 2,000 such reports each year to even a fraction of the 600,000 individual shippers who may choose to request a copy. Since experience has shown AMSA that considerably less than 1,000 shippers will request arbitration in any year, any benefits that may be derived from this system will be overshadowed by the time, effort, and money expended preparing, filing, copying, and disseminating such reports.

AMSA also comments that paragraph (a)(3) would require that, upon an individual shipper's request for arbitration, the mover must furnish forms and information necessary to initiate an action to resolve a dispute. It believes the requirement that specific forms be furnished will be unduly burdensome.

Section 14703 of the Code, it argues, requires that movers furnish shippers with written information explaining the availability of their dispute settlement programs. One of the benefits of these programs is that the process (at least the AMSA version of the process) is quite informal and easy to use. No forms are required. Instead, shippers need only submit a written request for arbitration by letter or facsimile. AMSA believes requiring the use of specific forms to initiate the procedure will only serve to unduly complicate a program that has been running effectively without such forms for more than two years. Accordingly, it recommends that the words “forms and” should be deleted from paragraph (a)(3).

The AGCT recommends that the cost of arbitration be borne entirely by movers to provide an incentive to resolve claims promptly.

AMSA believes that Congress has addressed this point. Shippers may not be assessed more than one-half the cost of arbitration and arbitrators' decisions may include cost assessments.

See

49 U.S.C. 14708(b)(5). It argues that Congress no doubt viewed the payment by shippers of a portion of the expense of arbitration as a means to discourage the presentation of frivolous claims. Of course, movers may elect to bear a greater portion or all of these costs if they so elect.

The OCC recommends that arbitration be expanded to include “Alternative Dispute Resolution,” arguing that arbitration alone is limiting. AMSA believes that Congress has also addressed this point. The applicable statute, 49 U.S.C. 14708, refers to “arbitration” as a means of settling disputes between movers and shippers. That aside, “Alternative Dispute Resolution” is a generic term that refers to a wide array of practices which are intended to resolve disagreements at lower cost than would be incurred in litigation and includes arbitration.

The 25AG recommend that the proposed arbitration section should be strengthened in several respects by the addition of requirements for prominent disclosure of consumers' rights at the outset of the transportation transaction and expeditious processing of requests for arbitration by impartial third parties.

AMSA is not opposed to an explicit recitation of mover responsibilities related to disclosure and other aspects of statutorily mandated arbitration programs. However, it argues that the predicate for the 25AG's argument is that if the regulations are not explicit, “* * * many movers will not participate in arbitration in good faith otherwise.” Such a proposition is obviously inconsistent, it states.

If a mover is intent on violating the requirements of law, AMSA argues, explicit regulatory language will not act as a deterrent. This is a matter of enforcement. To the extent the 25AG have, as they assert, encountered movers that do not participate in an arbitration program, AMSA argues that those movers should be reported to FMCSA for enforcement action.

Moreover, AMSA notes that the proposed regulation contains no less than 14 explicit directives that will govern all aspects of mover arbitration programs. One of those requirements states that: “You must produce and distribute a concise, easy-to-read, accurate summary of your arbitration program, including the items in this section.” § 375.211(b). In addition, paragraph (a)(2) requires that “Before the household goods are tendered for transport, your arbitration program must provide notice to the individual shipper of the availability of neutral arbitration. * * *” Thus AMSA believes these and other provisions of the proposed regulations clearly address the 25AG's concerns.

Response to Comments

We agree with AMSA. We believe the annual arbitration report (proposed §§ 375.901-375.907) will not be a benefit to shippers, the industry, or FMCSA. We also believe we should not retain the ICC's annual performance report elements for a combined annual report. Consumers will have to make informed decisions regarding movers' products and services without past performance reports that have been, and most likely would continue to be, inaccurate. FMCSA does not have the necessary staff to collect, process, verify, and disseminate such reports each year to all individual shippers, consumer advocacy organizations, and attorneys general who may choose to request a copy.

AMSA was correct that FMCSA would be required to process and maintain over 4,000 carrier annual reports in order to respond to consumer requests for information. (The NPRM used the figure 2,000 for the number of motor carriers, but we are using 4,000 in this Interim Final Rule, based on the FMCSA Motor Carrier Management Information System and Insurance Division's best estimate in March 2002 of the number of active household goods carriers authorized to operate in interstate commerce.) Also, the agency would have to allocate resources to answer consumer questions regarding the reports and compile aggregate statistics if we were to be in a position to answer consumer questions regarding the importance and meaning of a given carrier's data. Consumers would be unable to make informed decisions regarding report data unless they know how specific carrier data compares to industry average data. All of this would assume that FMCSA would have the necessary staff to collect, process, and disseminate more than 4,000 such reports each year to even a fraction of the 600,000 individual shippers who may choose to request a copy. Any benefits that may be derived from a reporting system would be outweighed by the time, effort, and money expended preparing, filing, copying, and disseminating such reports. FMCSA cannot justify the information collection costs in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Therefore, FMCSA is withdrawing the proposal to require the filing of an annual arbitration report.

We congratulate AMSA for not needing forms to initiate its arbitration programs. As AMSA points out, however, it does not represent all interstate movers. FMCSA does not want to preclude a mover who finds it

necessary to have a form from requiring that form and we would require the mover provide it upon the individual shipper's request.

We note, in response to comments by NACAA and OCC, that consumers have numerous remedies available to them before entering the arbitration process or if carriers fail to establish and maintain arbitration processes. As the 25AG note, consumers, NACAA, and the OCC should know of the consumer's right to decline from participating in arbitration, and, instead, pursue court action under 49 U.S.C. 14704. We believe it is not necessary to inform movers of this right in part 375 since AMSA has shown through its comments that its members have a good understanding of the statute. FMCSA has added this information to the YRRWYM appendix, though, to be provided to shippers for their benefit.

NACAA should not be surprised about our position regarding our limited role in dispute resolution. The Congress, as the NPRM noted, provided a clear understandable directive against allocating scarce resources to resolve private disputes and indicated that our primary role was to oversee the regulations. The GAO report also noted this Congressional directive.

We are not adopting the NACAA recommendation that the regulations require that other Federal, State, and local agencies retain jurisdiction over movers' acts and practices. This can be accomplished only by statute, not through these regulations.

Section 375.213 What Information Must I Provide to a Prospective Individual Shipper?

NACAA supports requiring movers to provide all prospective customers with the YRRWYM booklet. NACAA further believes movers should be required to insert their prior two years arbitration reports in YRRWYM to enable consumers to examine the claims history of a prospective mover. It believes the expense to movers will be negligible. It also recommends that all movers post annual arbitration reports on the Internet with references to their web site in YRRWYM and that FMCSA audit these arbitration reports.

The AGCT suggests requiring movers to provide a prospective shipper with a copy of a blank uniform bill of lading used by the mover before loading the shipment, to give the shipper an opportunity to review and ask meaningful questions about the terms listed on the form. It also would require movers to provide copies of their tariffs to properly inform the consumer of possible charges that may be levied by the mover.

The Consumers Union recommends that the information required by this section be provided at the time an estimate is given rather than before an order for service is executed.

AMSA believes the AGCT's recommendation that movers be required to provide a blank bill of lading and their tariffs to prospective shippers is unrealistic and burdensome. AMSA alleges that industry data indicates that roughly three shipment surveys are performed for each shipment booked. AMSA did not provide the data for the docket. AMSA believes requiring the distribution of bills of lading and tariffs containing several hundred pages of technical matter to prospective shippers would burden shippers and movers alike. In any event, Congress has addressed this issue by requiring in 49 U.S.C. 13702(c)(1) that movers provide notice of the availability of their tariffs for shippers who would elect to examine tariff provisions related to their move.

Consumers Union strongly urges FMCSA to redraft YRRWYM into even plainer language. As one example it states that subpart K should be at the front of the pamphlet.

AMSA disagrees with the Consumers Union. The proposed YRRWYM publication is a substantial revision of the former ICC publication. AMSA believes it significantly clarifies many points that are important to consumers in language that represents a major improvement over the former ICC language.

Response to Comments

FMCSA will adopt the specific recommendation provided by the Consumers Union by moving Subpart K to the front of the pamphlet.

In the interim final rule, FMCSA has added a paragraph (a)(3) requiring movers to provide notice of the availability of the applicable sections of their tariffs for shippers' examination or have copies sent to them upon request. FMCSA believes this addition provides shippers with adequate information to assist themselves in asking informed questions.

To require significant additional consumer information be provided by carriers, as recommended by some commenters (arbitration reports, blank bills of lading, complete copies of tariff) at the time an estimate is given, would add significant burdens on carriers beyond anything proposed in the NPRM. Since shippers frequently obtain more than one estimate, the additional burden on carriers could be multiplied several times. Also, because most tariffs are voluminous documents, FMCSA believes that it is beneficial to both shippers and carriers to limit the additional requirements in paragraph (a)(3) to the applicable sections of the tariff.

Section 375.215 How Must I Collect Charges?

The OCC recommends the option of pre-payment be made available at the shipper's election, especially for weight-based shipments. The mover would insure an accurate weight before shipping to protect its weight-based revenues. The shipper, in turn, would have more confidence in the weight and pre-payment of freight charges would eliminate unexpected destination or other charges.

AMSA questions whether OCC's recommendation would serve the interests of shippers. Section 375.401(a)(1) of the proposed regulations provides a mechanism for guaranteed charges. Shippers have the option of electing to tender their goods under a binding estimate and, in fact, many exercise that option. AMSA states that its data indicates that 47.2 percent of all COD consumer shipments were transported under binding estimate tariff provisions in 1996. (AMSA did not provide this data for the docket.) AMSA believes that authorizing payment of transportation charges in advance of the actual delivery of goods could provide unscrupulous movers with the opportunity to deceive shippers. As a case in point, it notes the experience of Ms. Josephine Meany, whose complaint is included in the NACAA comments. Unfortunately, Ms. Meany paid thousands of dollars to an unlicensed mover for what amounted to essentially no service. Her son's goods were not transported to the intended destination and she was forced to hire and pay a second mover to transport the goods. AMSA urges that we reject the OCC recommendation.

Response to Comments

FMCSA agrees with AMSA. The shipper may not know at the time he or she contracts for transportation whether circumstances related to the move may cause additional freight charges beyond those agreed upon at origin. The mover should not be held accountable for poor planning on the shipper's part. FMCSA, however, has added regulatory text to the interim final rule that specifies that all rates and charges for the transportation and services rendered must be in accordance with the mover's applicable tariff in effect, including the method of payment.

Section 375.217 How Must I Collect Charges Upon Delivery?

NACAA requests a modification stating that the mover “may specify two forms of payment acceptable, only one being cash or a cash equivalent.”

The AGCT suggested FMCSA establish nondiscriminatory rules governing cash-on-delivery (COD) service and collection of COD funds rather than allowing movers to develop their own procedures in the tariff. It suggested modifying paragraph (b) to require movers to relinquish possession of a shipment upon payment by the consumer of an amount substantially less than the binding or non-binding estimate. This provides the consumer with some leverage over the mover in the event of a dispute. The mover would have to pursue a claim against the consumer rather than requiring full payment by the consumer and forcing the consumer to pursue the mover. Such a burden shift provides greater protection for the consumer.

AMSA comments that the NACAA proposal, if adopted, would limit the options available to movers and their customers to effect the payment of transportation charges. The generally applicable options for payment are cash, certified check, traveler's check, or bank check (drawn by a bank and signed by a bank officer).

See

HGB Tariff 400-M, Item 29. In addition, the existing credit regulations in § 377.215, the household goods regulations in § 375.19, and proposed § 375.221, authorize the credit card option for payment and provide specific requirements related to the use of credit. Taken as a whole, AMSA believes these provisions adequately address the concerns expressed by NACAA.

AMSA believes the AGCT proposal for adopting nondiscriminatory rules for the collection of transportation charges in this proceeding is addressed in the preceding paragraph. Additionally, AMSA asserts that the AGCT has apparently neglected to consider the discussion at page 27128 of the NPRM that outlines the FHWA response to the moving industry's request for amendment of the existing credit regulations. AMSA states “obviously, household goods movers are not at liberty to fashion payment and/or extension of credit tariff provisions that would violate the existing or proposed FHWA regulations.”

The 25AG argue that the form of payment issue is directly related to consumer overcharge complaints. The 25AG therefore propose that § 375.221 require that, if a mover agrees to accept a credit card at the beginning of the shipment transaction, the credit card should be accepted at delivery. They also propose a related amendment to § 375.503(b)(9) dealing with bill of lading contents, which would require disclosure of the form of payment required upon delivery if it is different from that agreed to at the outset of the transaction.

In a similar vein, the AGCT is opposed to permitting movers to treat the reversal of a credit card transaction as an involuntary extension of credit. It argues that consumers should be authorized to treat a mover's failure to pay a claim for delay or loss/damage as an “involuntary extension of the shipper's credit to the mover,” thus subjecting the mover to the same financial penalties as the consumer bears under the credit regulations at § 375.807.

AMSA asserts that each of these proposals is fraught with the potential for endless controversies between movers and shippers. More importantly, it believes, they reflect a misunderstanding of Congressional intent. Section 13707 provides that a motor carrier “* * * shall give up possession at the destination of the property transported by it only when payment for the transportation or service is made.” Since the extension of credit by movers is permissive, it would be foolhardy to adopt regulations that would attempt to address these issues since they cannot adequately anticipate the many circumstances that occur when drivers and consumers settle accounts at the time of delivery. AMSA argues that accepting a credit card at origin, for example, provides the consumer with sufficient time to seek alternative means of payment should the charge amount be declined by the card issuer. If a driver delivers on weekends or after hours and the mover's credit/collection department is closed, the driver cannot call in the charges and the mover will not be in a position to make certain that the card issuer will accept the charge. Dealing with a credit card at delivery may also cause unnecessary delays. If the charge is declined, the consumer must seek alternative means of payment that could unnecessarily delay delivery. In the meantime, the mover must wait, which could result in additional charges, vehicle detention, or storage-in-transit. These proposals could have the unfortunate result of forcing movers to limit the payment alternatives that are presently offered to shippers.

AMSA strongly opposes the AGCT proposal that movers should be required to relinquish possession of a shipment upon payment of an amount “substantially less than the binding or non-binding estimate” in order to provide consumers with “leverage” in the event a dispute arises. AMSA believes it obviously ignores the requirements of 49 U.S.C. 13707 and the important requirement contained in 49 U.S.C. 13702(a)(2) that:

The mover may not charge or receive a different compensation for the transportation or service than the rate specified in the tariff, whether by returning a part of that rate to a person, giving a person a privilege, allowing the use of a facility that affects the value of that transportation or service, or another device.

AMSA believes the 25AG have approached this and a number of other issues as if the regulations to be promulgated should be treated in a vacuum with no consideration given to underlying statutory directives or restraints. They also ignore the fact that movers have a lien on the goods they transport and may refuse to deliver until their charges are paid or guaranteed.

Illinois Steel Co.

v.

Baltimore & Ohio Railroad Co.,

320 U.S. 508 (1944).

Response to Comments

FMCSA appreciates the comments received regarding this section and has incorporated the recommendation that we require the mover to specify the form of payment when the mover prepares the estimate. The mover and its agents must honor the form of payment at delivery, except when a shipper agrees to a change. The mover must include the same information on the order for service and bill of lading. It is important to state in the rule that the carrier must accept the method of payment originally agreed in order to avoid unnecessarily burdening the shipper, who may not be prepared to make an alternative form of payment. For example, in a case where a cashier's check is the agreed payment and the carrier demands cash on a Saturday evening when the bank is closed, a serious problem would be created for the shipper, most likely resulting in the driver leaving without unloading the shipment.

FMCSA has also added another requirement to the interim final rule. If the mover or its agent agrees to accept a charge or credit card payment as the method to pay for receipt of goods at delivery, then the mover must arrange for delivery during the time the mover's credit/collection department is open to seek approval of payment by card issuer, unless the vehicle is equipped to process credit card payments.

Section 375.221 May I Use a Charge or Credit Card Plan for Payments?

The OCC believes the term “cashier's check” should not supplant the term “money order.” A loss of an open money order that does not denote a payee can result in a stop payment of the same. No stop payment is available for the loss of cash. A shipper may hesitate to carry a large sum of cash and may want to go to a convenience store and convert the cash into consecutive money orders. AMSA agrees that both terms should be used.

The 25AG believe the regulations should mandate that the mover's payment policy be the same at all stages of the transaction. If charge or credit cards are permitted at the order for service, the cards should be allowed at the time of delivery. They suggest that carriers should inform consumers of their payment policies.

The AGCT suggests the regulations should not allow carriers to treat reversal of credit card transactions as an involuntary extension of credit. This is not consumer protection, it believes. If carriers suffer financial loss due to actions of the consumer, carriers should be required to rely on the same avenues of dispute resolution that are available to the shipper. It further recommends that FMCSA should allow a consumer to treat a carrier's failure to pay a claim for untimely shipments or damage or loss as an involuntary extension of the shipper's credit to the carrier, subjecting the carrier to the same financial penalties as the consumer listed in § 375.807.

Response to Comments

FMCSA has added money orders as a form of acceptable payment in the interim final rule. If a mover accepts money orders as an acceptable form of payment, the mover must include the provision in its tariff.

FMCSA has also added language to § 375.221(a) to make it clear that a carrier is bound by the payment provisions in its tariff from the time it gives an estimate until completion of any transaction that results from that estimate, unless otherwise agreed with a shipper under § 375.217(a).

FMCSA has retained the rule language that allows a carrier to treat a reversal of a credit card transaction as an involuntary extension of credit because the use of a credit card is considered an alternative to payment in cash, certified check, money order, or cashiers check, which are payment methods that cannot be reversed.

However, FMCSA has not added a provision allowing a consumer to treat an unpaid claim against a carrier as an involuntary extension of credit. Adding such a provision would be beyond the scope of the NPRM. Resolution of a claim that may be in dispute is traditionally resolved in a State court.

Section 375.301 What Service Options May I Provide?

The AGCT recommends that the regulations should require carriers to have liability insurance covering casualty losses resulting from the actions of the carrier.

AMSA comments that the rationale underlying the AGCT recommendation is not clear. AMSA states that carriers are liable for cargo loss and damage under 49 U.S.C. 14706 and must provide evidence of insurance pursuant to 49 U.S.C. 13906(a)(3). As a general proposition, casualty insurance coverage contemplates personal injury losses, a subject that is not related to this proceeding. In any event, carriers are also required by statute to maintain liability insurance in amounts prescribed by the Secretary covering bodily injury, etc.

See

49 U.S.C. 13906(a)(1).

Response to Comments

FMCSA agrees with AMSA. The AGCT's recommendation appears to contemplate requiring personal injury loss coverage in these regulations. This is not within the scope of this rulemaking and is already required by statute and regulation.

Section 375.303 If I Sell Liability Insurance Coverage, What Must I Do?

The 25AG recommend requiring clear and conspicuous disclosure to consumers of all limitations on liability coverage and any inventory requirements needed for valuation of their shipments, as well as requiring disclosure, at the time of delivery, of whether any agents were used during the move and whether the consumer's goods were stored during the shipment. They further recommend that upon the consumer's request, carriers should provide numerous pieces of information. Such information would include the agents or subcontractors used during the move, liability coverage for that move, identification of all storage facilities used, and liability coverage attendant to that storage. They also suggest development of regulations that will sharply limit the use of disreputable tactics by some carriers to avoid legitimate liability coverage obligations.

The AGCT suggested the regulations require carriers to procure insurance on behalf of the shipper. If a carrier sells or offers to sell liability insurance to the shipper, the carrier must comply with any applicable licensing requirements of a State insurance regulatory body. If the carrier sells or procures insurance on behalf of the consumer, the consumer must be the named insured on the policy and the carrier must provide the consumer with a copy of the policy and a certificate of insurance indicating the period of coverage.

AMSA comments that the language proposed in § 375.303(a)(1) and (2) is unclear in establishing the conditions under which carriers may sell or procure insurance coverage for cargo loss or damage. As written, paragraph (a) provides that insurance may be procured only under the two conditions set out in paragraphs (a)(1) and (2). However, those paragraphs are not connected with the conjunctive “and” or the disjunctive “or.” Moreover, AMSA believes the language in paragraph (a)(2) is confusing. It describes a situation where the shipper fails to declare a valuation of $1.25 per pound and pays or agrees to pay the carrier for assuming liability equal to “the declared value.” This condition is at odds with itself.

AMSA points out that under the outstanding Surface Transportation Board released rates order (RRO), the failure to declare a lump sum value or valuation of $1.25 per pound will result in the shipment being deemed to have been released to a declared lump sum value of $1.25 per pound times the weight of the shipment.

See

9 I.C.C. 2d 523.

In any event, AMSA believes paragraph (a)(2) can be eliminated as unnecessary. Historically, carriers were authorized to sell or procure excess insurance only when the shipment was released to a value not exceeding 60 cents per pound. Although current § 375.11(a) contains the additional condition that “the shipper does not declare a valuation of $1.25 or more,” it is clear that the latter condition is superfluous. Although stated as two conditions, they are actually the same. If a shipper releases a shipment at 60 cents per pound, he could not declare a valuation at $1.25 per pound or more. Conversely, if he declares a valuation at $1.25 or more, he could not release the shipment at 60 cents per pound. This mutual exclusivity is made clear in the RRO giving rise to this language.

See

RRO No. MC-505, Released Rates of Motor Common Carriers of Household Goods, June 7, 1966, and Released Rates Decision No. MC-999, 9 ICC. 2d 523 (1993). AMSA therefore recommends that paragraph (a)(2) be deleted.

AMSA further argues that paragraphs (b) and (c) are duplicative to some extent. Current § 375.11(a) is limited to insurance for loss and damage just as appears in proposed paragraph (c). It therefore recommends that paragraph (b) be deleted, paragraph (c) be redesignated as (b), and the remaining paragraphs be redesignated accordingly.

With respect to the 25AG recommendation that more explicit language should be employed to preclude carrier avoidance of payment of loss or damage claims, AMSA believes that proposed § 375.303 is not intended to deal with this issue. Carriers, it asserts, are required to process claims for loss or damage in accordance with the regulations contained in 49 CFR part 370. If, as the 25AG argue, they encounter situations in which they believe carriers have violated part 370, a complaint can be made to FMCSA.

AMSA believes that the AGCT recommendation that carriers be required to procure insurance on behalf of shippers and, if appropriate, comply with any applicable State licensing requirements, confuses the carrier's role in procuring insurance. Carriers do not sell insurance, but may procure insurance on behalf of a shipper from an insurance entity that is authorized to issue a policy under applicable State law.

Response to Comments

In response to the 25AG, we believe that the carrier, its employees, and agents are essentially one and the same, in that the carrier is responsible for the acts of both the employees and agents. Therefore, the authorized carrier named in the bill of lading would be primarily responsible for any activity involving the move, including the selling of insurance and providing the shipper with a policy from the insurance carrier. If the authorized carrier used an owner-operator under lease agreement, the carrier would be fully liable for the move.

The Surface Transportation Board's revised RRO states that unless the shipper expressly releases the shipment to a value not exceeding 60 cents per pound per article, the carrier's maximum liability for loss and damage shall be either the lump sum value declared by the shipper or an amount equal to $4.00 times the actual weight of the shipment, whichever is greater. Additionally, the shipper may purchase additional liability insurance coverage from the carrier. The revised RRO provides that the $4.00 rate may be increased annually by the carrier based on the Department of Commerce's Cost of Living Adjustment.

As we noted in our response to § 375.201, we have added regulatory text to § 375.201 concerning the full liability to which the carrier may be subject if it fails to issue a copy of the insurance policy or other appropriate evidence of insurance. Also, we have adopted AMSA's recommendation to delete proposed paragraphs (a)(2) and (b) in § 375.303.

Section 375.401 Must I Estimate Charges?

NACAA supports estimates being given in writing. The AGCT suggests changing “binding estimate” everywhere in the proposed regulations to “guaranteed delivery price.” It believes that the term “estimate” implies approximation rather than a fixed price. It further suggests changing paragraph (b) to reflect the fact that the final charges will be based on the actual weight “or volume” because this is consistent with estimates to be given based on weight or volume.

Starving Students has a deep concern about requiring written estimates. It states that a written estimate requires a personal visit to the shipper's residence, which is costly. It estimates that requiring a prior written estimate would add $250 or more to the cost of the move and believes adding such costs would discourage many shippers from hiring a mover for small moves.

Starving Students also believes that there is not enough advance time to perform a visual inspection for a written estimate. Shippers often schedule moves with very short notice, which does not permit a prior visual inspection to be performed. The majority of Starving Students' bookings are booked within seven days of the scheduled move.

Starving Students also notes that numerous moves occur from locations where movers do not have a local office in the vicinity. A prior visual inspection will be impossible in these cases. The consumer would have to select a mover not based on price or service, but on the proximity of a field estimator. Small movers offer low cost, no frills alternatives to the large van lines. It argues that excluding small movers, like Starving Students, from interstate moves based on a lack of a national network of estimators is an unfair restraint of trade. In summary, Starving Students believes that shippers and carriers want the same thing,

i.e.

, for the consumer to pay, and the carrier to receive, a reasonable price for the transportation of household goods across state lines.

AMSA believes this section provides that individual shippers must be given a written estimate before an order for service is executed and commends FMCSA for including these provisions in the proposed regulations. Providing as many written estimates as possible will certainly serve to reduce shipper complaints and misunderstandings over final charges. However, AMSA believes there are certain aspects of this requirement that should be considered further.

AMSA believes that most moves are booked at least two weeks in advance with the majority booked a month or more in advance. However, situations arise when moves are booked on much less than two weeks' notice or sudden last-minute changes make the preparation of a written estimate in advance of the move impossible. Situations brought about by unusual circumstances such as unexpected employment changes, domestic disputes, evictions, foreclosures, or emergency evacuations do not always permit much in the way of advance notice. AMSA believes that requiring a written estimate, which is, in turn, subject to the 110 percent rule, will cause some movers to refuse short notice shipments to avoid being held to the 110 percent payment provision because there is no opportunity to perform a visual inspection. Shippers will then be left with fewer options to accommodate their requirements,

e.g.

, move on their own or use unlicensed movers who ignore FMCSA regulations.

AMSA recommends that an alternative procedure be adopted for short notice shipments. Shippers would be given the opportunity to waive the requirement for a written estimate (or to waive the 110 percent rule) in short notice situations. The shipper will nonetheless receive service from a licensed professional mover subject to all of the other protections provided by the proposed regulations, it believes. It suggests that paragraph (a)(2) should be amended by revising paragraph (a) and adding a new paragraph (e), as follows:

(a) Before you execute an order for service for a shipment of household goods for an individual shipper, you must estimate the total charges in writing, except as provided in paragraph (e) below. The written estimate must be in one of the following two types:

(e) Waiver—Signatures Required. Subject to the shipper's agreement to waive the requirement for a written binding or non-binding estimate, pursuant to the provisions of § 375.407, you may provide a price quotation which shall be your reasonably accurate estimate of the approximate costs the individual shipper can expect to pay. The

shipper's agreement to waive the written estimate requirement must also include collection or credit arrangements acceptable to the shipper for payment of the total charges. The waiver agreement must be in writing and signed by the shipper before the shipment is loaded, and a copy must be retained as an addendum to the bill of lading.

AMSA believes for situations other than short-notice shipments, the provisions of § 375.407 that have been designed to deal with “hostage shipments” are a welcome addition to the proposed regulations. AMSA routinely receives complaints from desperate shippers whose shipments are being held by unscrupulous movers to be exchanged for the payment of charges in excess of the 110 percent maximum. If the government enforces these provisions, AMSA asserts, many complaints of this nature will be eliminated.

In response to AGCT's suggestion that the term “guaranteed delivery price” be used in this section and throughout in lieu of “binding estimate,” AMSA notes the term “binding estimate” is rooted in the underlying statute, 49 U.S.C. 13704(a)(1).

Response to Comments

We did not require that a personal visit had to be made to execute the written estimate when we proposed the section regarding written estimates. We believe a written estimate could be executed after any telephone interview with a prospective shipper. Whatever the estimator estimates the total to be and communicates it to the shipper, the estimator would follow it up in writing.

We believe that the requirement to provide a written non-binding estimate, subject to the 110 percent rule, would cause some movers to make more accurate estimates for short notice shipments. This is because the incentive to add charges for additional services should be less when a carrier would not have to be paid for at least 30 days after delivery, and when the additional charges could be disputed by the shipper. This should provide shippers with a more accurate estimate to compare to other movers. Shippers would then be in a better position to compare and pay a more realistic amount than what some movers have allowed their agents to estimate.

In the interim final rule, we have added a requirement that the mover provide each shipper with an explanation in writing of the formula used when an estimate is given in terms of volume and then converted to weight. We have added a requirement that the mover specify the final charges will be based on actual weight and services, subject to the 110 percent rule at delivery.

We have also added a requirement that the mover must determine charges for any accessorial services such as elevators, long carries,

etc.,

before preparing the order for service and the bill of lading. If the mover fails to ask the shipper about such charges and fails to determine such charges before preparing the order for service and the bill of lading, the mover must deliver the goods and bill the shipper after 30 days for the additional charges.

In addition the interim final rule contains a new paragraph (b) specifying that, at the time the estimate is presented, the mover must specify the form of payment that it will accept at delivery.

To clarify the role of household goods brokers in the estimating process, FMCSA has added a new § 375.409, discussed below.

Section 375.403 How Must I Provide a Binding Estimate?

The AGCT suggests requiring all carriers include a binding estimate provision in their tariffs and to provide a binding estimate if requested by the consumer. It suggests the rules should not allow carriers to unilaterally refuse to honor the binding estimate and carriers should be required to provide the service as originally agreed on. It recommends that carriers be permitted to negotiate with the consumer for any additional services requested at the time of pickup, either as a binding or non-binding estimate, and that the rules should affirmatively require carriers to inquire of site conditions at the destination or other matters which may result in the imposition of additional charges at the delivery point. If the carrier fails to ask whether there are any long flights of stairs, AGCT states, the carrier should “not be permitted to charge for any additional services at the destination which may have reasonably been anticipated and not listed as an additional charge in its estimate. This is reasonable, since the carrier has experience in this area, and knows such services often require additional charges.”

The AGCT believes carriers should be required to relinquish possession and bill the consumer for such additional services rather than demand immediate payment at the time of delivery.

AMSA comments about paragraph (a)(5), which provides three options for the carrier if the shipper tenders additional household goods or requests additional services that were not included in the original binding estimate. While the first three options will cover most situations, AMSA writes, other circumstances may result in a failure between the mover and the shipper to agree to a price for the additional services. Therefore, AMSA believes it is appropriate to include a fourth option to address this situation as follows:

(iv) If an agreement cannot be reached as to the price and/or service requirements for the additional goods or services, you are not required to service the shipment.

Paragraph (a)(7) provides that the carrier may require full payment for additional services requested by the shipper or required to be performed at destination (such as stair carry, long carry, storage, etc.). AMSA notes that during a typical moving scenario, the shipper may also request additional services while a shipment is en-route, such as a diversion with an extra pick-up or delivery to a friend or relative at an intermediate point. AMSA believes that the proposed language should be clarified to accommodate such requests as follows:

(7) If the individual shipper adds or requires additional services en-route or at destination to complete the transportation, and the services fail to appear on your estimate, you may require full payment at the time of delivery for such added services.

AMSA states that AGCT's proposal that carriers be required to include a binding estimate provision in their tariffs conflicts with the permissive authority conferred by 49 U.S.C. 13704(a) (1) and 14104(b)(l), which provide that carriers “may” provide binding estimates of charges.

AMSA believes that the AGCT's suggestions reflect a failure to understand the operational conditions carriers often confront in order to properly service shipments. During a typical move, additional services may be required to complete the move or the shipper may request additional services while the shipment is en-route or before delivery. Since the transportation of household goods is a labor intensive process, the failure of the shipper to properly inform the carrier of the precise requirements necessary to properly remove the contents of a residence, secure them in an over-the-road vehicle and effect delivery at the new residence, can result in additional services which, in turn, require the assessment of additional charges.

AMSA asserts that owner-operators perform the majority of the labor services that are required to load, transport, and unload household goods shipments. These individuals cannot, nor should they be expected to, perform their services without compensation or

for compensation that is less than is necessary to attract their services. AMSA believes that it should be apparent that the fact that the costs and related charges incurred to perform a move may not agree with an estimate of charges is not the exclusive result of carrier misfeasance or deception as certain arguments suggest.

For example, AMSA notes, NACAA proposes that, by paying an additional 10 percent, the shipper is not admitting the legitimacy of the expense or waiving any rights to bring a private action under State or local law. NACAA also proposes that the regulations state that it is an unfair, misleading or deceptive act or practice for a mover to fail to deliver the goods after an offer to pay 110 percent is made.

In response to the AGCT's recommendation that consumers be allowed to reduce the amount they must pay for a carrier to relinquish a COD shipment to “substantially” less than 100 percent of the estimate, and that they be allowed to offset any damages from the balance of any remaining charges owed to the carrier, AMSA states that certain AMSA testimony in 1998 before the U.S. House of Representatives Subcommittee on Surface Transportation of the Committee on Transportation and Infrastructure warrants repeating:

The overwhelming majority of all movers are reputable, regulated businesses. They perform an essential public service by complying with the consumer and other regulations that govern our business and were put in place by the former ICC. * * *

In its evaluation of this situation, and in its consideration of possible legislative solutions, we urge Congress not to lose sight of the fact that the moving industry performs 1.3 million interstate moves each year, the vast majority of which are accomplished without incidence and to the customer's satisfaction. It is the exceptional, out of the norm “horror story” that attracts media attention and portrays the industry in a bad light. No attention is paid to the hundreds of thousands of incident-free moves that take place each year. [footnote omitted] This is somewhat understandable since the media concentrates on the exception rather than the rule in its attempt to alert the public to what it perceives to be potential problems. My industry understands that motivation. In fact, we also firmly believe the public should be encouraged to make certain they are selecting a licensed, reputable mover when they require moving services. My point is, given the existing, somewhat negative climate the moving industry is dealing with, Congress should not react in a manner that will unduly burden the industry by imposing regulatory obstacles that translate into less efficient, more costly service to the public. (Testimony of Joseph M, Harrison, President, AMSA, delivered August 5, 1998.)

Attached to Mr. Harrison's testimony were copies of a small sampling of congratulatory letters AMSA members received from customers expressing their satisfaction with the carrier's service. AMSA noted those letters reflect the high level of service all reputable movers strive to achieve. AMSA also noted no publicity was paid to the customer's laudatory comments.

AMSA comments that in the context of estimates of charges versus actual lawful charges, changes in service requirements usually occur either because the shipper requested the changes or because the mover determined they were necessary to properly service a shipment. AMSA argues that one needs merely to review carrier tariffs to understand the many services carriers must perform that may result in changes in estimates of charges. These include vehicle detention, distance and stair carries, impracticable operations, pickup or delivery on Saturdays, Sundays or Holidays, stop-offs, appliance service, shuttle service, and storage-in-transit. Available industry statistics obtained from the AMSA Continuing Traffic Study for COD shipments transported in 1995 indicate the following:

11.7 percent of COD shipments required either an extra pick-up, an extra delivery, or both;

14.2 percent required long carry service or elevator service;

14.0 percent required stair carries; and

2.8 percent required shuttle service to complete pickup or delivery at inaccessible locations or waiting time to accommodate shippers' schedules when accomplishing delivery.

In the aggregate, 56.8 percent of the COD shipments required these or other additional services either at the shippers' specific request or because such service was required to accomplish delivery.

AMSA also believes it is appropriate to consider the former ICC's analysis of the difficulties associated with estimating. In concluding that 10 percent above estimated charges is the appropriate margin for collection by carriers at delivery, the Commission stated:

In doing so, we recognize that carriers should be permitted some leeway in estimating charges. Calculating approximately the weights of various items of household goods, arriving at an opinion of the total weight of a shipment, and working out the probable costs of accessorial services at origin and destination, all coupled with the element of human error, should not be the bases for establishing the amount beyond which the carrier should be required to extend credit to the shipper. We therefore conclude that a 10 percent margin should be allowed to the carrier in arriving at its reasoned judgment of total charges, and that such a variation will not be an unreasonable burden to the shipper.

Practices of Motor Common Carriers of Household Goods,

111 M.C.C. 427, 468 (1970). See also

Practices of Motor Common Carriers of Household Goods,

132 M.C.C. 599, 609 (1981).

Response to Comments

FMCSA agrees with the AGCT that, at the time of pickup, movers should inquire of site conditions at the destination or other circumstances which may result in the imposition of additional charges at the delivery point. If the mover fails to ask whether there are any long flights of stairs, for example, the mover would relinquish possession and bill the shipper for such additional services rather than demand immediate payment at the time of delivery. We have added appropriate language to the interim final rule to incorporate these comments.

In addition, FMCSA requires in § 375.403(a)(8) in the interim final rule that if a shipper asks for additional services after the goods are in-transit, the mover must inform the shipper additional money must be paid. If a mover believes additional services are necessary to properly service a shipment after goods are in-transit, the mover must inform the shipper what the additional services are before performing those services. The mover must allow the shipper at least one hour to determine whether he/she wants the additional services performed. If the shipper agrees to pay for the additional services, the mover must execute a written attachment to the bill of lading and have the shipper sign the written attachment. This could be accomplished through faxes between the parties.

If the additional services are not acceptable by the shipper and the shipment is in transit, the carrier should deliver for the amount of the original estimate and bill for any remainder after 30 days.

FMCSA believes it is the carrier's responsibility to ask and determine at origin if the conditions at the destination require additional services (

i.e.

, shuttle, long carry, elevator, stairs, and other accessorial services) to effect delivery, and to advise the shipper of the cost of such additional services, as well as method of payment for the services at the time of delivery. If the shipper refuses to pay for additional services at origin and before loading, the carrier has the option to accept or deny the shipment.

See

§ 375.403(a)(5) in the interim final rule. If the shipper refuses to pay for additional services at the

destination when the carrier arrives for delivery, then the carrier can attempt to negotiate different payment terms for the cost of additional services; however, the carrier must deliver the shipment.

We disagree with AMSA that when the individual shipper adds or requires additional services en-route or at destination to complete the transportation, and the services failed to appear on the mover's binding estimate, the mover may require full payment at the time of delivery for such added services. We believe the better approach is to allow the binding estimate to be paid on delivery and the additional charges be billed at least 30 days after delivery. By requiring the mover to determine the appropriate accessorial charges before loading the shipment and permitting the carrier to refuse servicing the shipment before loading, the problem of inaccurate estimates because of surprise charges and services at destination will be minimized. If new charges or services do occur, we will require the individual shipper to pay them, but only after a period when the individual shipper has had the opportunity to establish his or her financial relationships in the new community. Requiring an individual shipper to raise hundreds, if not thousands, of dollars at the destination in a very short time can cause a severe hardship.

Section 375.405 How Must I Provide a Non-Binding Estimate?

NACAA supports movers retaining shipping records, including written cost estimates, for a period of one year. The Consumers Union believes the rules should require that carriers give consumers a maximum price with a non-binding estimate. The Union suggests allowing a carrier to self-determine how it provides the maximum price, whether through a simplified tariff schedule handed to the consumer, or by calculating a maximum price above the estimate. It asserts that information about a maximum price enhances the consumer's ability to compare carriers.

AMSA believes consistency requires expanding proposed paragraph (b) to address the circumstances presented when changes occur in the services required to transport a shipment that moves on a non-binding estimate just as is provided by § 375.403(a)(5), (6), and (7) for binding estimate shipments. AMSA recommends adding the following similarly worded paragraphs to paragraph (b):

(7) If it appears, before loading, that an individual shipper has tendered additional household goods or requires additional services not identified in the non-binding estimate, you are not required to honor that estimate. However, before loading the shipment, you must do one of the following three things:

(i) Reaffirm your initial non-binding estimate;

(ii) Negotiate a revised written non-binding estimate listing the additional household goods or services;

(iii) If an agreement cannot be reached as to price and/or service requirements for the additional goods or services, you are not required to service the shipment.

(8) Once you load a shipment, failure to execute a new non-binding estimate signifies you have reaffirmed the original non-binding estimate. You may not collect at delivery more than 110 percent of the amount of the original non-binding estimate, plus the full payment for additional services that were performed en-route or at destination that do not appear on your non-binding estimate.

AMSA believes the same additions should be made to the Your Rights and Responsibilities When You Move publication, under the explanation of Non-Binding Estimates.

AMSA also believes the words “best estimate” contained in paragraph (b) should be changed to “reasonably accurate estimate” because estimates are just that and accuracy is the goal, not best or worst or some other misnomer.

AMSA believes that the proposed requirement that movers retain records of all non-binding estimates of charges for at least one year from the date the estimate was prepared will be unnecessarily burdensome. As part of the normal course of arranging for a move, shippers are encouraged to obtain multiple estimates before their move. As a result, most movers perform many more estimates than moves. AMSA believes that the intent of paragraph (c) is to ensure that estimates are preserved only for the moves that are actually performed. Thus, AMSA suggests deleting paragraph (c) and adding the 1-year retention requirement paragraph (b)(4), as follows:

(4) You must retain a copy of the non-binding estimate for each move you perform for at least one year from the date you made the estimate as an addendum to the bill of lading.

AMSA also recommends that § 375.403(c) and § 375.407(d) should be amended to incorporate these recommended changes.

AMSA comments that the Consumers Union proposal to require carriers to give consumers a maximum price with a non-binding estimate has been addressed by Congress in 49 U.S.C. 14104(b), which does not mandate binding estimates. According to AMSA, a requirement that carriers furnish maximum prices would be tantamount to a mandated binding estimate and inconsistent with the statute.

Response to Comments

FMCSA believes that whether a mover provides an estimate via telephone or a personal visit, the estimate must be in writing. The carrier should provide an estimate that is reasonably accurate and include all services to be provided. The estimate should also be based on the carrier's applicable tariff. This would not be a new burden, as the carriers are already required to do this. The estimate must clearly note the shipper is only required to pay 110 percent of the non-binding estimate at time of delivery. We have added the following provisions to the interim final rule to clarify how to handle changes to non-binding estimates: Any changes in a non-binding estimate must be mutually agreed to in a written attachment to the bill of lading. If a shipper asks for additional services after the goods are in-transit, the mover must inform the shipper additional money must be paid. If a mover determines additional services are necessary to properly service a shipment after the goods are in-transit, the mover must inform the shipper what the additional services are. The mover must allow the shipper at least one hour to determine whether he/she wants the additional services performed. If the shipper agrees to pay for the additional services, the mover must execute a written attachment to the bill of lading and have the shipper sign the written attachment.

FMCSA agrees with AMSA that a requirement that carriers furnish maximum prices would be tantamount to a mandatory binding estimate. FMCSA also agrees with AMSA that paragraphs (a)(7) and (8) of § 375.405 should parallel § 375.403(a)(5)-(7) and has changed the interim final rule language accordingly.

FMCSA also agrees with AMSA's comment on paragraph (b) and has changed “best estimate” to “reasonably accurate estimate.”

FMCSA also agrees that requiring the retention of all estimates for one year would be burdensome, and has changed §§ 375.403(c), 375.405(d), and 375.407(d) so that a mover need only retain for one year copies of estimates for moves actually performed.

Section 375.407 Under What Circumstances Must I Relinquish Possession of a Collect-on-Delivery Shipment Transported Under a Non-Binding Estimate?

NACAA supports the requirement that all goods be released upon payment of no more than 110 percent of the

estimated charge. It also suggests that language should be added clarifying that the consumer, in accepting delivery, is not waiving any rights to proceed against the mover in a private action to recover transportation charges, or waiving State or local enforcement. It argues that the rules should provide that it is unfair, misleading and a deceptive act or practice to fail to deliver household goods when a mover is offered 110 percent of the written estimate.

The AGCT recommends the rules substantially reduce the amount of money that the consumer must pay to the carrier in order for the carrier to relinquish possession of the shipment. The AGCT strongly supports the deferred payment provision of paragraph (c) and believes the consumer should be permitted to offset any damages from the balance of any remaining charges owed to the carrier.

AMSA recommends that to avoid potential misunderstandings, the wording of paragraph (a) should be changed to comport with the language contained in current § 375.3(d), as follows:

(a) If an individual shipper pays you at least 110 percent of the estimated charges on a collect-on-delivery shipment on which a non-binding estimate of the approximate costs was furnished, plus the costs for additional services that were performed en-route or at destination which were necessary to complete the transportation, you must relinquish possession of the shipment at the time of delivery. You may specify the form of payment acceptable to you.

Paragraph (c) includes an explanation of how carriers must handle the collection of balances due in excess of the 110 percent amount paid on shipments that moved under non-binding estimates. Although it believes that the example provided in the NPRM is clear, AMSA would like language added to avoid any misunderstandings concerning the assessment of authorized service charges on delinquent payments as would be authorized by proposed § 375.807. AMSA recommends adding the following sentence at the conclusion of paragraph (c) of § 375.407:

If the $400 is not paid within the 30-day period following issuance of your freight or expense bill, you must assess a service charge of one percent of the freight bill, subject to a $20 minimum charge for each subsequent 30-day period or fraction thereof.

AMSA also believes it is necessary to consider the language contained in proposed § 375.801(b)

What types of charges apply to subpart H?

, and the discussion in Subpart H of the Your Rights and Responsibilities publication as they deal with the extension of credit to COD shippers.

AMSA believes the existing credit regulations make it clear that they do not apply to COD non-binding estimate shipments that move under the 110 percent rule. It refers to 49 CFR 377.215(a), and its reference to 49 CFR 375.3(d). This language was lifted in its entirety from the former ICC credit regulations, 49 CFR 1320.8(a), which contained the same inapplicability reference,

i.e.

, 49 CFR 1056.3(d). Under both versions of these regulations, COD shippers must pay not less than 110 percent of the estimated charges on a non-binding estimate shipment at the time of delivery. If a balance remains beyond the 110 percent amount paid, the carrier may request payment of that amount not sooner than 30 days after the date of delivery. There are no other credit arrangements available for the COD customer. The extension of credit regulations contained in 49 CFR 377.215 and 49 CFR 1320.8 apply to shippers, other than COD shippers, to whom carriers extend credit. For example, a national account shipper may arrange for the transportation of its employees' goods under a carrier's tariff rather than under a contract. Because of the repetitive nature of that shipper's business, the carrier may elect to extend credit to the shipper for the payment of transportation charges, in which case the provisions of § 377.215 would apply.

AMSA believes that in the drafting of proposed § 375.801 and the narrative contained in Subpart H of Your Rights and Responsibilities, we incorrectly assumed that the existing credit regulations apply to COD shippers whose goods move under the 110 percent rule. AMSA believes the language and instructions in proposed § 375.801 are bound to create confusion among individual shippers who may assume that their mover will defer its request for payment and extend credit 30 days or more beyond the date of delivery. AMSA recommends rewriting § 375.801 and subpart H to avoid misunderstandings between individual shippers and movers. It believes the regulations and shipper guidance must make it perfectly clear carriers will expect payment of not more than 110 percent of the estimated charges on a COD non-binding estimate shipment at the time of delivery. It also believes the mover rule and shipper guidance must make it perfectly clear the shipper will be billed for any balance due not sooner than 30 days after delivery.

Response to Comments

We do not agree with the AGCT proposal to reduce the amount of payment required at delivery to substantially less than 110 percent of the estimated charges. We believe the 110 percent requirement strikes a fair balance between the carrier's right to receive prompt payment for its services and the shipper's right to pay an amount reasonably close to the estimated charges at the time of delivery. Allowing shippers to offset damages from any remaining charges owed the carrier would violate 49 U.S.C. 13702, which requires household goods carriers to charge and receive the rate specified in their tariffs. In response to NACAA, the right to take claims to court is established by law and does not need to be specifically mentioned in these regulations.

FMCSA agrees with the AMSA comments. We have modified the section to state that the mover may expect payment of no more than 110 percent of the estimated charges on a COD non-binding estimate shipment at the time of delivery and that the shipper will be billed for any balance due not sooner than 30 days after delivery. We have also modified the last sentence in paragraph (a) to state the mover must accept the form of payment agreed upon at time of estimate, including credit card, and relinquish the shipment.

Section 375.409 May Household Goods Brokers Provide Estimates?

We have added new § 375.409 to eliminate confusion regarding the authority of household goods brokers to issue estimates of transportation charges. Twenty-five years ago, the Interstate Commerce Commission concluded that brokers were prohibited from providing estimates because the duty to comply with the household goods regulations rests with the carrier, and shippers aggrieved by an act or omission of a broker would be unprotected by the regulations. In

Entry Control of Brokers,

126 M.C.C. 476, 520 (1977), the Commission stated:

For example, if a broker provides a c.o.d. shipper with an estimate it has made, on which the shipper relies, the shipper would be deprived of the protection of 49 CFR 1056.8(b) of the household goods regulations, which provides that where the transportation charges exceed a carrier-made estimate by more than 10 percent, the shipper must pay only 110 percent of the charges upon delivery and is given a period of 15 days following delivery to make payment in full. Since this protection applies only to carrier-made estimates, a c.o.d. shipper who relies upon an incorrect estimate of a broker will have to pay the carrier's entire freight charges

upon delivery, regardless of the extent the actual charges might exceed the broker's estimate.

In

Exec-Van Systems, Inc., Broker Application,

128 M.C.C. 669, 678 (1978), the ICC noted that a broker's proposal to make estimates “would appear to be inconsistent with our established regulations, since 49 CFR 1056.8(a) places the obligation for making estimates solely upon the carrier. Applicant would, therefore, be advised not to interfere with the carrier in the performance of his obligations in making estimates, as this responsibility is intended by our regulations to be performed solely by the carrier or his agent.”

Along these same lines, the Commission, in

Ward Moving & Storage Co., Inc., Household Goods Broker Application,

132 M.C.C. 589, 596 (1981), stated that “49 CFR 1045.7(b) * * * implicitly forbids the broker offering services or making contractual obligations which only a carrier may offer. It must be clear to the public that the broker is only an arranger of transportation, acting only in an advisory nature and offering services ancillary to the physical transportation.” The rule cited in this quotation, now codified in 49 CFR 371.7(b), prohibits brokers from misrepresenting themselves, directly or indirectly, as carriers.

Although brokers may not enter into agency agreements with household goods carriers because they are required to exercise discretion in allocating traffic among carriers, we believe it would be permissible for a carrier to enter into a more limited type of agreement authorizing the broker to provide estimates on behalf of the carrier. Under such an agreement, the carrier would have to adopt the broker's estimate as a carrier-issued estimate and incorporate it into the order for service and bill of lading for purposes of compliance with part 375, particularly the 110 percent rule. We believe that under these circumstances, the individual shipper would not be deprived of the protections provided in part 375 because the carrier would still be held accountable for complying with this part. However, a household goods broker may not issue an estimate without entering into such an agreement with a carrier because otherwise the requirements of part 375 would not apply to the broker-issued estimate.

Section 375.501 Must I Write Up an Order for Service?

NACAA supports requiring all prices, terms and services to be presented in written documents signed by the mover and delivered to the shipper before the household goods are packed and loaded; and that these documents must be retained for a period of one year. NACAA also urges us to prohibit movers from requiring shippers to sign blank or incomplete documents, such as estimates, orders for service, or bills of lading.

The AGCT suggests the rules should allow a shipper to proceed against the mover if the mover fails to deliver the shipment in accordance with the time requirements in the contract. It believes that the shipper should not have to pay an additional fee to the mover to ensure pickup and delivery of the goods on the specific dates or within a specific period. The AGCT argues that we should grant the shipper a three-day grace period allowing the shipper to rescind the order for service without any penalty, provided the ordered services are scheduled more than three days after the order is written and that the mover should provide shippers with the items listed in § 375.503(b)(2), (4), (9), (10), and (11).

The AGCT argues that paragraph (a)(5) should allow the shipper to deduct any penalties or per diem amount due to the shipper from any amounts that the shipper owes to the carrier. Alternatively, the mover should be required to make payment to the shipper at the time of delivery in the manner specified by the shipper to level the playing field and allow both parties to collect amounts due them at the same time. Paragraph (a)(6) should require the carrier to affirmatively note the shipper's denial of any special or accessorial services that might be reasonably expected.

In response to the AGCT comments, AMSA argues that shippers do not ordinarily incur additional costs for delivery date commitments unless equipment availability is limited and a specific request requires special operations. With respect to the shipper remedies suggested by the AGCT, AMSA states that: (1) Shippers routinely cancel orders for service for a variety of personal reasons and incur no penalty for doing so; (2) as a general rule, the information listed in § 375.503(b)(2), (4), (9), (10), and (11) is routinely furnished when an order for service is executed; (3) any amount that may be due a shipper as a result of loss, damage or inconvenience must be presented and processed pursuant to the regulations at 49 CFR part 370, or the carrier's lawful tariffs; and (4) if an accessorial service is requested or required, presumably performance of that service is necessary to safely transport a shipment. AMSA questions the advisability of a rule that would permit shippers to refuse services that “might be reasonably expected.”

Response to Comments

Although carriers may routinely permit shippers to cancel orders for service without penalty and furnish references to several bill of lading provisions when an order for service is executed, the comments from the AGCT indicate that not all carriers adopt such practices. We believe that mandating a 3-day grace period and reference to the bill of lading provisions provides additional consumer protection (

See

new paragraphs (e) and (a)(6) through (a)(10) in the interim final rule).

We adopt the AGCT's comment about paragraph (a)(6) (which is codified at (a)(11) in the final rule) and agree with AMSA that a required accessorial service may be necessary to safely transport a shipment if the mover could reasonably expect it. We require, in new paragraph (b) of the interim final rule, that if an accessorial service is necessary to safely transport a shipment, the mover must refuse to accept the shipment. As a safety agency, we will not allow the mover to provide unsafe transportation even when requested by an individual shipper.

In response to comments by NACAA, in new paragraph (d) in the interim final rule we are prohibiting movers from requiring shippers to sign blank or incomplete estimates, orders for service, bills of lading, or any other blank or incomplete documents pertaining to the move.

Must I Write Up an Inventory?

NACAA believes the rules should mandate shipment inventories that itemize every box and item consigned to protect shippers and movers for all weight-rated and hour-rated moves, unless the shipper signs a clear and conspicuous waiver of the inventory. NACAA recommends that an inventory form also be required.

AMSA concurs in the NACAA recommendation stating that detailed inventories of the goods tendered for transportation serve to protect the interests of shippers and carriers. AMSA recommends inclusion of the following provision:

Proposed § 375.502 Must I Write Up an Inventory?

(a) You must prepare a written, itemized inventory for each shipment of household goods you transport for an individual shipper. The inventory must identify every carton and every uncartoned item that is included in the shipment. When you prepare the inventory, an identification number that corresponds to the inventory must be placed

on each article that is included in the shipment.

(b) You must prepare the inventory before the shipment is loaded in the vehicle for transportation in a manner that provides the individual shipper with the opportunity to observe and verify the accuracy of the inventory if he or she so requests.

(c) You must furnish a complete copy of the inventory to the individual shipper before beginning to load the shipment. A copy of the inventory, signed by both you and the shipper, must be provided to the shipper, together with a copy of the bill of lading, before you begin to load the shipment.

(d) Upon delivery, you must provide the shipper with the opportunity to observe and verify that the same articles are being delivered and the condition of those articles. You must also provide the shipper the opportunity to note, in writing, any missing articles and the condition of any damaged or destroyed articles. In addition, you must also provide the shipper with a copy of all such notations.

(e) You must retain inventory forms for at least one year from the date you created the form.

AMSA noted its recommended addition would also entail a change in that portion of the Your Rights and Responsibilities publication which deals with this issue (Subpart E—Pick Up of My Shipment of Household Goods).

AMSA therefore recommends adopting the following language in lieu of that proposed:

Should my mover write up an inventory of the shipment?

Yes. Your mover should prepare an inventory of your shipment before loading. The inventory should be a detailed listing of the cartons and uncartoned articles included in your shipment noting any damage or unusual wear to any articles. The purpose of the inventory is to make a list of the articles included in your shipment and a record of the condition of each article.

After completing the inventory both you and the driver should sign each page. Before you sign it, make sure that the inventory lists every item in the shipment and that the entries regarding the condition of each article are accurate. You have the right to note any disagreement in the form. When your mover delivers your shipment, your ability to prove that any articles were lost or damaged may depend on the accuracy of the inventory. Your mover should give you a copy of the inventory. Be sure to keep your copy in a safe place; it is an important part of your shipment records. Your mover will keep the original. If your mover's driver completed the inventory, the mover will attach the complete inventory to the bill of lading as an addendum.

Response to Comments

FMCSA agrees with NACAA and AMSA. We have added the proposed requirements in § 375.503 of the interim final rule and included that a mover must write an inventory of all items involved in a move, assigning each item an identification number. The mover must prepare an inventory before it allows its agents or drivers to load the shipment. The mover must provide a complete copy to the shipper before loading the shipment. Upon delivery, the mover must provide the shipper with an opportunity to verify the same articles are being delivered and the condition of those articles. The mover must provide the shipper the opportunity to note any missing articles and the condition of any damaged or destroyed articles. Finally, the mover must provide the shipper with a copy of all such notations.

Section 375.503 Must I Write Up a Bill of Lading?

NACAA supports the requirement that all prices, terms, and services be presented in written documents signed by the mover and delivered to the shipper before the household goods are packed and loaded and that the allowable form of payment be specified in writing. NACAA supports requiring movers to retain shipping records, including bills of lading, for a period of one year.

The 25AG recommend that the rules should require clear and conspicuous disclosure on all documents, including estimates and bills of lading, of what form of payment will be required upon delivery of household goods, if different from the form of payment received at the outset of the transaction. If a carrier accepts a credit card as only a guarantee, the 25AG assert, the carrier should disclose that the credit card is not the form of payment that will be accepted upon delivery and also must disclose the form acceptable at delivery.

Response to Comments

FMCSA has modified this section (renumbered as § 375.505 in the interim final rule) based on the comments. New paragraph (b)(4) requires movers to specify on the bill of lading the form of payment acceptable at delivery, which must be the same form of payment entered on the estimate and order for service. New paragraph (b)(14) specifies that the attachments to the bill of lading are an integral part of the bill of lading contract. Also, proposed paragraph (b)(4) has been deleted as unnecessary.

Section 375.505 Must I Determine the Weight of a Shipment?

The 25AG strongly agree with the proposed opposition to the use of non-certified on-board trailer scales.

Air-Weigh states that its scales convert truck and trailer air-spring air pressure to accurate weight display. Its scale determines how much weight per pound of air pressure the suspension is supporting by comparing empty and loaded vehicle weights with air pressure required to support the weight. It states that once calibrated, the scale displays the on-the-ground weight of each axle group to within 200 to 300 pounds of an accurate platform scale. Comparative statistical research is being conducted, which Air Weigh intends to forward to the FMCSA when it becomes available.

The Cat Scale Company believes that on-board weighing is not in the best interest of the shipper when addressing the issue of shipper protection. It stated that “the allowance of on-board weighing would eliminate the customer being given a certified, ‘legal for trade’ weight of their goods as performed by a third party. The owner of the on-board scale would actually be the party transporting the goods and therefore have an interest in the weight of those goods.”

Cat Scale states further that full length certified scales are governed by regulations established by the National Institute of Standards and Technology (NIST) under the U.S. Department of Commerce. Cat states these regulations are published in the Handbook 44 publication. Most States have adopted Handbook 44 as the State's governing regulations or have regulations in force that are based, in large part, on Handbook 44. Cat asserts that each State very aggressively checks certified scales to insure their compliance with Handbook 44 and in turn seals the scale to show that the scale may be used to give a “legal for trade” weight.

Cat also states that significant ongoing maintenance of a certified scale is necessary in order to keep it 100 percent accurate and able to meet Handbook 44 requirements. For example, Cat uses a 200,000 pound capacity scale, having 10,000 graduations of 20 pounds each found in Table 6 Handbook 44 Section 2.20, Scales, pages 2-23. In order for Cat to maintain proper calibration of that scale, when Cat applies 25,000 pounds of test weights to the scale, the maximum deviation tolerance allowed by NIST would be three graduations or 60 pounds. When Cat initially placed into service the scale, the maximum allowable deviation was one half that or 30 pounds. It is Cat's understanding that the deviation of an on-board scale (using Air-Weigh's model 5600 as an example) is 200-300 pounds per axle group. That equates to as much as 900 pounds of potential error per typical load. If the average household goods load weighs 6,023 pounds, Cat believes 900 pounds represents a significant percentage of

that total and could translate into significant unnecessary costs to the shipper.

Cat re-calibrates its scale every 90 days or four times per year. Cat states that typically a State will check calibration and reseal the scale once per year. However, Cat's scale is subject to a random check by the State at any time.

Important to the certified weighing process, Cat believes, is the necessity of the scale to be constructed on a level plane with a 10-foot level approach at each end of the scale. If the scale is not absolutely level, the potential for error exists and is multiplied the more out of level the condition is. Cat asserts it is very difficult to achieve a level surface on many streets or driveways.

Cat states the remote sensor processor on an on-board scale converts the pressure readings at the axle group's air spring to a number and updates the scale every 4.8 seconds. By contrast, on its scale unit, the scale indicator reads data from each load cell 16 times per second, or 76 times more often.

In addition, Cat states Air Weigh's on-board scale systems are not approved by the National Type Evaluation Program of the NIST and are totally unregulated by any standards organization. Cat states it is concerned with shipper protection and customer satisfaction and guarantees its weights to be accurate. If a driver weighs legal on its scale and then receives an overweight citation, Cat states it will either reimburse the driver or trucking company for the amount of the fine, or it will appear in court with the driver as an expert witness. Cat also keeps copies of all of its scale tickets for seven years as required by law. This gives the shipper the opportunity to request a copy of the original ticket if he/she suspects fraud. In the case of its weights being used for billing purposes, Cat's guarantee still applies to make sure that drivers get paid for what they've hauled—no more, no less.

Cat does not think it is in the best interest of the shipper for FMCSA to approve on-board scales for the moving and storage industry because of the potential for error and the lack of a governing body to check the accuracy of the scale system. These factors could equate to shippers incurring additional unnecessary expenses in connection with their household moves.

Weighing Consultants, Inc., (WCI) believes that on-board weighing systems for trucks and trailers are available that meet the tolerance requirements for commercial application, which are 0.1 percent of the applied (net) load. WCI attached to its comments the National Type Evaluation Program of the NIST Certificate of Conformance 99-091 issued to NORAC Systems International for an on-board weighing system. WCI stated the request by Air-Weigh for FMCSA to accept Air-Weigh's technology was based on data accurate at best to 1.0 percent of applied load. WCI recommends rejecting it based on product already available that meets commercial requirements.

A WCI representative made a household move and the net weight of the household goods was 9,540 pounds. WCI stated that this represented the contents of a four-bedroom house and was above the average net weight of a household move. On a certified platform scale the tolerance allowed on this 9,540 pounds would be plus or minus 20 pounds. (WCI refers to Table 6 Handbook 44 Class IIIL scale). The 200-300 pound weight differential stated by Air-Weigh is 10 to 15 times greater. WCI stated, “If in fact the differential of the Air-Weigh system is 200-300 pounds per axle group, the differential from a certified scale would be 20 to 30 times greater than the presently allowable tolerance. Handbook 44 also states the allowable tolerance for Class IIII scales, allowed for use by law enforcement only, at a maximum of 5 divisions which would be 100 pounds on an axle scale. The Air-Weigh product accuracy is stated as 2 to 3 times the generous Class IIII tolerance.”

WCI believes FMCSA should continue the policy of requiring all weights to be determined on scales certified by a State's Weights and Measures Department. This policy, it believes, will continue to ensure equity in the marketplace and leave the statutory authority for weights and measures with the states. WCI asserts that the National Conference on Weights and Measures and NIST Office of Weights and Measures have always encouraged the development of new technology and evaluate many new weighing device types each year under the National Type Evaluation Program. WCI believes Air-Weigh should be encouraged to submit its product to the National Type Evaluation Program for evaluation as its competitor NORAC System International did.

The Sisson Scale and Equipment Company, Inc., supports the current regulation requiring the use of certified scales for independent shippers by the moving and storage industry.

The Deskin Scale Company, Inc. states that the regulatory guide for its industry has been Handbook 44 since 1949. The NIST has a statutory responsibility for “cooperation with States in securing uniformity of weights and measures laws and methods of inspection,” Deskins states.

The only on-board weighing systems that Deskin was aware of that are actually accepted for commercial use are fork lift scales and lifting devices for trash haulers, which use load cells connected to the forks for measuring and do not in any way derive weight information from the pressure of hydraulics or air. Deskin stated its experience has been that “those who do rely on hydraulics or air pressure do not repeat to any degree of accuracy which is demanded by H-44 and therefore in the interest of the shipper should not be considered for use.” It is Deskin's opinion that the shipper's best interest will only be served by use of those devices that meet the requirements of Handbook 44.

The Action Scale & Weighing Systems, Inc., states Toledo, Ohio is a “hub” for truck traffic coming from the North, South, East, and West, including Michigan “train trucks” and grain vehicles from Canada. It is Action's opinion that “on-board weighing would not be in the best interest of the public, as the fox would virtually be guarding the hen house. The only way to insure accurate weights is on a static scale operated by a third party.”

The California, Colorado, Idaho, Michigan, New Hampshire, Oregon, and Pennsylvania Departments of Agriculture strongly support the use of certified scales for all aspects of commerce done by weight. They support the retention of the regulation requiring the moving and storage industry to use certified scales when conducting commerce where cost is determined by weight. The Pennsylvania Department of Agriculture believes the use of on-board non-certified scales will be an invitation for unscrupulous operators to defraud shippers, based on its experience discovering and prosecuting moving and storage companies for falsifying weighmaster certificates by “bumping.” “Bumping” is any method where additional charges to the customer are claimed by the moving and storage company by adding additional weight to the load or by adding weight to the scale and then weighing the load.

The State of Idaho Department of Agriculture, Bureau of Weights & Measures, does not dictate what type of scales the moving and storage industry uses, as long as they are commercial type scales, and are therefore capable of being certified. It believes there are a myriad of devices made today that fall short of the requirements for commercial use, but are manufactured for estimation, internal accounting, sorting, or other non-commercial applications. The Idaho Department of

Agriculture states there is at least one on-board weighing system for semi-trailer use (Weigh-Tronix, model STS-50, 50,000 times 20 pounds) that has a certificate of compliance on the market today.

The Idaho Department of Agriculture is concerned that non-commercial type on-board weighing systems are being used. It is also concerned that manufacturers are using this rulemaking to try to circumvent the National Type Evaluation Program of the NIST requirements being met by other scale manufacturers. The Idaho Department of Agriculture encourages Air-Weigh and Hi-Tech Scale to work to get their products approved through the National Type Evaluation Program system.

The Idaho Department of Agriculture notes that the National Conference on Weights and Measures along with NIST advisers have determined the requirements for commercial scales. The tolerances and performance requirements have been set to prevent either the buyer or seller from being damaged in transactions. These standards are recognized not only in every jurisdiction in this country but throughout the world. The Idaho Department of Agriculture urges FMCSA to ensure any rule change continues to require shipping and storage charges be determined on a commercial scale—whatever form that scale may be, a vehicle scale or on-board scale system.

The Michigan Department of Agriculture would not object to the non-commercial use of non-certified scales, provided they are clearly marked “Not Legal For Trade” and could thus be used for estimates only. Otherwise, the Michigan Department of Agriculture strongly supports maintaining the “certified scale” requirement for commercial sales.

The Handbook 44 serves the California Department of Agriculture as a uniform model governing performance, use, and testing of commercial weighing and measuring devices. The California Department of Agriculture urges FMCSA to retain a policy of requiring weights upon which charges are based to be determined on scales that have been tested and sealed by State weights and measures officials applying the requirements of Handbook 44. Companies who wish to offer weighing and measuring devices for use in determining charges for goods or services, should ensure that they comply with the uniform standards contained in Handbook 44, and should continue to be required by FMCSA to submit such devices to testing and verification by weights and measures officials.

The Oregon Department of Agriculture requires that: (1) Any weighing or measuring device must be licensed, tested and approved by the Oregon Department of Agriculture Measurement Standards Division when the device is used commercially for the measurement of vehicles; and (2) any commercial weighing or measuring instrument or device must be issued a Certificate of Conformance traceable to NIST.

The New Hampshire Department of Agriculture believes that on-board scales are not in the best interest of shippers and competitors. The potential error of 200-300 pounds per axle group is unacceptable, as well as its “incorrect” status under Handbook 44.

The Colorado Department of Agriculture does not have a problem with on-board weighing. It believes any rules that are adopted must take into account the individual State requirements for commercial measuring devices. All states currently have requirements for commercial measuring devices that are rooted in years of experience. These requirements manifest themselves as Handbook 44.

The Colorado Department of Agriculture states that if FMCSA elects to allow the use of on-board weighing systems, it must (1) ensure that the system is as accurate as the certified scales that are currently used for shipping; and (2) ensure the on-board weighing system meets the same standards, with regard to specifications, as other commercial devices,

i.e.,

that it meets the criteria of Handbook 44. The Colorado Department of Agriculture believes that meeting Handbook 44 requirements will ensure that both the shipper and carrier are treated equally, and scale manufacturers can compete equitably.

AMSA urges us to acknowledge the advantages of advances in technology that have become available throughout the moving industry for the weighing of shipments. It asserts that the use of on-board scales promotes shipper satisfaction by producing immediate, on-site shipment weights without the need to follow a tractor-trailer to an available scale. It proposed adding new § 375.523, which it believes will protect shippers' rights by requiring that shippers observe the weighing procedure, and allow them to reject the results of the on-board weighing procedure and elect to have the shipment weighed on a traditional scale. The recommended provision would read as follows:

If a trailer is so equipped, at the shipper's option, shipment weight may be determined with an on-board trailer scale if the shipper observes the weighing of the trailer both before and after the loading of the shipment. If the shipper accepts the final weight determination, you must obtain a signed statement to that effect and retain it as part of the shipment file. If the shipper rejects the on-board scale weight determination, the shipment must be weighed on a certified motor vehicle scale in accordance with the requirements of § 375.509.

Response to Comments

FMCSA opposes the use of non-certified on-board trailer scales. The comments show they are not in the best interest of shippers. On-board weighing has the potential for manipulation of actual weight. While we acknowledge there may be advantages to using new technology for the weighing of shipments, AMSA and its device manufacturer have not produced evidence that its system is compliant with Handbook 44.

FMCSA believes the issue of on-board trailer scales should be discussed in a separate and specific rulemaking. We believe the moving industry must work with the NIST and the States before asking us to allow their use. The NIST is the government agency responsible for promoting uniformity in United States weights and measures laws, regulations, and standards. The NIST regulations achieve equity between buyers and sellers in the marketplace and enhance shipper confidence in the marketplace. FMCSA does not have this expertise and will defer to the NIST for its opinions in this matter. The NIST does not want FMCSA approving a device that may set non-uniform weight regulations and may achieve inequality between buyers and sellers in the marketplace and degrade shipper confidence in the marketplace.

The moving industry may also want the NIST to research the issue as allowed by 15 CFR 200.101

Measurement research.

The NIST provides basic research and development activities aimed at meeting broad general needs. The NIST may also undertake investigations or developments to meet specialized physical measurement problems of an industrial group using funds supplied by the requesting organization.

AMSA has not indicated how it will safeguard shippers' rights other than requiring that shippers observe the on-board weighing procedure and permitting them to reject the results of this procedure. The comments by the weighing industry and State regulatory agencies suggest that AMSA's methods and device may provide false weights.

AMSA does not specify how often the device would be calibrated, who would ensure calibration accuracy, and what happens if the calibration was done in another State and the shipper wishes to contest the weight in another State.

FMCSA has added a requirement in the interim final rule that the mover must provide a written explanation of volume to weight conversions, when the mover provides an estimate by volume and converts the volume to weight. Also, this section has been renumbered as § 375.507.

Section 375.507 What Is a Certified Scale?

The regulatory text of proposed § 375.507, which defined “certified scale,” has been moved to § 375.103, where it is more appropriate.

Section 375.509 How Must I Determine the Weight of a Shipment?

The 25AG believe the proposed rule fails to provide the shipper disclosures necessary to assure that carriers do not double bill on so-called split loads. They allege shippers are presented with recently issued official weight tickets from a nearby certified public scale at the time of delivery; however, the shipper is unaware that a partial load bound for another destination remains onboard, and that it formed a portion of the total load reflected on the ticket. They believe the rules should require that each shipper's shipment must be weighed separately.

AMSA states that a requirement that each shipper's shipment be weighed separately would result in operating gridlock. To comply with such a rule, carriers would be required to unload one shipment that is on a van to accommodate a second shipment solely for weighing purposes. The impracticalities of coordinating such operations should be obvious.

Response to Comments

FMCSA is not adopting the 25AG's proposal. FMCSA believes it is economically costly and time consuming to weigh each shipment separately as suggested by the 25AG. The rules as proposed are adequate. The weight must be determined by weighing the shipment at origin or back weighing the shipment. The shipper is further protected by the regulations that allow a shipper to witness the weighing and the right to request a re-weigh. Final transportation charges are based on actual weight in accordance with applicable tariff provisions.

Section 375.511 May I Use an Alternative Method for Shipments Weighing 454 Kilograms or Less?

AMSA states this section adopts the provisions of the current regulations, which provide that shipments weighing 1,000 pounds or less may be weighed on a certified platform or warehouse scale in lieu of a scale designed for weighing motor vehicles. AMSA understands the agency's concerns that an increase in the minimum shipment weight threshold might allow movers to charge a minimum rate at the higher weight threshold when the shipment actually weighs less and that defining a small shipment as one weighing 3,000 pounds or less could be perceived as giving our blessing to an increase in the minimum rate threshold in household goods carriers' tariffs. However, AMSA does not agree that these concerns will actually occur if the 1,000 pound small shipment weight is increased. AMSA argues that tariff charges, historically, have not been linked to the minimum weight determination threshold. For more than 40 years, AMSA states, the tariff minimum weight remained at 500 pounds (even though the minimum scale weight was 1,000 pounds) as personal effects shipments continued to gradually increase in weight. As a result, in June 1984, the tariff minimum was increased to 1,000 pounds, not because the increase corresponded to the threshold, but because of increases in the fixed administrative costs associated with the servicing of small shipments.

As a matter of practice, the moving industry already considers shipments weighing less than 3,000 pounds to be classified as small shipments and has adjusted its principal tariff series accordingly. A small shipment surcharge applicable to shipments weighing less that 3,000 pounds was initiated in May 1989 to offset the administrative costs associated with handling these shipments. This surcharge remained in effect until May 1996 when it was incorporated into the line-haul tariff rates. Therefore, an increase in the minimum scale weight would not impact existing tariff provisions since they have already been adjusted to reflect the costs associated with the handling of small shipments.

With this history in mind, and because the minimum scale weight and the minimum tariff rate have been unrelated to one another, AMSA does not agree that an increase in the minimum scale weight to 3,000 pounds will have a causal effect on tariff rates. Instead, AMSA believes that increasing the weight limit to 3,000 pounds would promote greater efficiency in the weighing of shipments on certified warehouse and platform scales which will, in turn, help reduce tractor-trailer traffic and congestion in areas where larger motor vehicle scales are operated.

AMSA notes that the proposed and current regulations require that if shipment charges are weight-based, the carrier must obtain a gross and tare weight for each shipment. Separate weight tickets identifying each weighing of a shipment are required to be provided to the shipper. The certificates list the scale name, location, weighing date, identification of tare, gross or net weights, vehicle identifications, and the name of the shipper. Clearly, this is sufficient to ensure that carriers obtain accurate shipment weights.

Response to Comments

We agree with the AMSA comments on this section and have modified the interim final rule to raise the weight threshold from 454 kilograms (1,000 pounds) to 3,000 pounds.

Section 375.513 Must I Give the Individual Shipper an Opportunity to Observe the Weighing?

NACAA supports requiring movers to afford shippers an opportunity to observe weighing of their shipments.

Response to Comments

The proposed observation requirement is adopted without change.

Section 375.515 May an Individual Shipper Waive His/Her Right To Observe Each Weighing?

AMSA argues this provision should be modified. AMSA recommends the provision should indicate that the shipper's decision not to observe weighings constitutes a waiver of that right. It argues that proposed § 375.513 clearly requires that carriers “* * * must give the person who will observe the weighings a reasonable opportunity to be present to observe the weighings.” Assuming a shipper elects not to observe the weighings, to be consistent, § 375.515 should be amended to indicate that right was waived. 49 U.S.C. 14104(c) requires that shipper waiver of the right to observe re-weighings must be accomplished in writing. Therefore, to accommodate both situations, AMSA recommends revising the section to read as follows:

If an individual shipper elects not to observe a weighing, the shipper is presumed to have waived that right. If an individual shipper elects not to observe a re-weighing, the shipper shall waive that right in writing. This does not affect any other rights of the individual shipper under this part or otherwise.

Response to Comments

FMCSA agrees with AMSA and has added language to the interim final rule that a shipper's waiver of the right to observe a re-weighing must be in writing. We allow the shipper to send the writing via fax, e-mail, or any other electronic means.

Section 375.521 What Must I Do if an Individual Shipper Wants To Know the Actual Weight or Charges for a Shipment Before I Tender Delivery?

NACAA supports requiring movers to comply with the shipper's requests for notice of the shipment weight and charges before delivery.

Response to Comments

The proposed notification requirement is adopted without change.

Section 375.601 Must I Transport the Shipment in a Timely Manner?

NACAA supports requiring movers to transport goods in a timely manner.

Response to Comments

The proposed reasonable dispatch requirement is adopted without change.

Section 375.605 How Must I Notify an Individual Shipper of Any Service Delays?

NACAA supports requiring movers to retain notices relating to service delays for a period of one year and supports requiring movers to notify shippers of service delays.

AMSA believes there is a basic problem with the language employed in this section. The section states that a carrier must notify a shipper of service delays. AMSA believes the inconsistency lies in the fact that if a carrier is unable to pick up a shipment on the agreed upon date(s), it must notify the shipper of the delay and amend the order for service. It makes little sense to AMSA to amend an order for service for delay at origin. The practical result of this section, as written, is that carriers will never be responsible for delays at origin because the order for service will reflect that the shipment was actually loaded on the agreed upon pick-up date. Appropriate changes should be made.

In addition, AMSA notes that paragraph (b)(6) requires the mover, in the instance of delay notification, to furnish the shipper with a “true copy” of the notice by first class mail or in person. AMSA believes this provision, while carried over from the existing regulations, will be no more feasible to perform under the proposed regulations than it is under the existing regulations. During the course of a move, while both the shipment and the shipper are in transit, there is no practical benefit in mailing a copy of the delay notification to the shipper. Since the shipper, who has already received notice of a delay by telephone, telegram, or in person is not at his old or his future address, no purpose is served by mailing a duplicate notice. AMSA submits that the solution lies in simply adding the words “if the shipper requests a copy of the notice.” Such a revision would ensure that “interested shippers” who desire a copy of the notice for their records or to support a claim for delay or inconvenience will be furnished a copy, while duplicate copies would not be automatically forwarded to other shippers who have already received their shipments and have no need for the notice.

Response to Comments

FMCSA agrees with AMSA's comments on this section and has made appropriate changes in the interim final rule language.

Section 375.607 What Must I Do if I Am Able To Tender a Shipment for Final Delivery More Than 24 Hours Before a Specified Date or Period of Time?

The AGCT comments that carriers should be required to deliver the shipment in accordance with the delivery dates or periods specified in the contract. Paragraph (c) should preclude a carrier from limiting its liability for storage-in-transit to the delivery period. It is inequitable to allow a carrier to avoid any liability for delays in shipment while providing no similar mechanism to excuse a shipper's delay, even if the delay is caused by circumstances beyond the shipper's control. It recommends we should permit movers only limit their liability to the last day of the delivery period specified in the bill of lading.

AMSA comments on this AGCT proposal that paragraph (c) preclude movers from limiting their “liability” for storage-in-transit. In addition, it is suggested that this subsection be modified to only permit the mover to limit its “liability” to the last day of the period specified in the bill of lading. The proposed regulation speaks in terms of “responsibility” and not “liability.” The rule is apparently intended to authorize movers, at their option, to not assess storage charges, or, alternatively, to assess charges beyond the agreed date. In support of the AGCT's position, it argues that it is “inequitable” to allow carriers to avoid liability for delays with no similar mechanism to excuse shipper delays. AMSA believes that movers routinely honor delay and/or inconvenience claims in accordance with their tariff provisions that are not intended to avoid carrier liability.

Response to Comments

FMCSA agrees with the comments of this section.

Section 375.609 What Must I Do for Shippers Who Store Household Goods in Transit?

NACAA supports requiring movers to retain notices issued under this section for a period of one year.

The AGCT comments that the nine-month limitation on a shipper's right to file a claim against the carrier for damage or loss of goods in paragraph (b)(2) runs counter to a shipper's right to bring an action within the State of Connecticut's statutory period. It believes the rules should acknowledge the shipper's right to rely on a State-established statutory period for bringing an action against the carrier. Any other action is not shipper protection in its opinion. It also recommends that we modify paragraphs (a) and (b) to impose liability on the carrier until ten days after the carrier actually gave notice to the shipper that the period of storage-in-transit will expire and the shipment will be governed by rules and charges of the warehouseman. It believes the ten-day period is consistent with the provisions in paragraph (c).

AMSA asserts that paragraph (d) will require that notifications to shippers regarding the expiration of storage-in-transit (SIT) be accomplished by certified mail, return receipt requested. This provision should be expanded to include notification by facsimile transmission and overnight courier. Such a change will permit movers to take advantage of faster methods of transmitting the required notifications. This is particularly important for SIT periods of less than 10 days when only 1-day notice is required as contemplated by § 375.609(e).

In connection with paragraph (b)(2), AMSA believes that the AGCT's suggestion conflicts with the nine-month statutory period provided for the filing of claims for loss or damage in 49 U.S.C. 14706(e)(1).

In response to the AGCT proposal to retain carrier liability until 10 days after the carrier actually gives notice, AMSA does not believe that a notice related to the expiration of storage-in-transit should be allowed to unduly extend the SIT period. AMSA states shippers are advised at the time their goods are placed in storage that the SIT storage period is 90 days and if a longer period

applies by virtue of a particular carrier's tariff, the shipper is so advised.

Response to Comments

In the interim final rule, FMCSA has added to paragraph (d) that notification can be made by facsimile, overnight courier, e-mail, or certified mail return receipt. All of these methods can confirm delivery notification to the shipper. We cannot adopt the AGCT's comment about the shipper's right to bring an action within a State's statutory limitation period. The Federal statute takes precedence for interstate moves. Also, FMCSA cannot add a new requirement that would impose on carriers a potential additional 9 days of liability when it has failed to give the 10 day notification under paragraph (c). The rule, as adopted, imposes liability on a carrier for an indefinite period if it does not give notice and ensures the shipper of at least 24 hours notice that a carrier liability for goods in storage will end.

Section 375.701 May I Provide for a Release of Liability on My Delivery Receipt?

NACAA supports the requirement that movers must not include in their paperwork a release from liability for damages, but believes permitting carriers to include the “statement the property was received in apparent good condition except as noted in the shipping documents” is not justified and can lead to serious shipper harm. It suggests that proposed § 375.701(b) be removed. It also proposes requiring check boxes with statements such as “I have not had an opportunity to open all boxes to verify the condition of their contents or determine if anything is missing.” It believes the rules should mandate inclusion of a statement that the “mover remains liable for all losses suffered by shipper” with an explanation of the procedure and time limits for making a claim.

The AGCT recommends amending this section to make explicit that the “apparent good condition” language is not binding and the rules should not allow a carrier to include a statement that the property was received in good condition unless otherwise noted. It asserts that the shipper does not have the time to inspect all goods as the carrier unloads them. This is especially true for any items that are boxed and unavailable for inspection at the time of delivery. It believes the regulation creates a barrier to the shipper's ability to successfully assert damage claims against the carrier.

AMSA argues that paragraph (a) makes it clear that any carrier statement attempting to release it from liability is not permitted. The statement NACAA objects to is a general acknowledgment indicating that the services ordered have been accomplished and the shipment has been delivered in “apparent” good condition. The shipper is only expected to note conspicuous loss or damage at the time of delivery. The presumption of “apparent” good condition is routinely rebutted by shippers after they have had an opportunity to unpack and perform a more thorough inspection.

Response to Comments

FMCSA agrees with AMSA's comments on this section and believes no changes are necessary.

Section 375.703 What Is the Maximum Collect-on-Delivery Amount I May Demand at the Time of Delivery?

The AGCT recommends requiring carriers to relinquish possession of the shipment in an amount substantially less than 100 percent of the estimate.

AMSA comments that the maximum COD amount that may be collected on a non-binding estimate shipment is 110 percent of the estimated amount. It states that this provision should be revised to mirror its earlier suggested change in § 375.403(a)(7), to provide that the carrier may also require full payment for additional services requested or required by the shipper that do not appear on the estimate and were performed by the mover en-route or at destination. The proposed subsection would read as follows:

(b) On a non-binding estimate, the maximum amount is 110 percent of the non-binding estimate of charges, except that full payment may be collected at the time of delivery for any added additional services that were performed en-route or at destination which were necessary to complete the transportation and do not appear on your non-binding estimate. You may specify the form of payment acceptable to you.

Response to Comments

We have not made the changes to this section suggested by AMSA since we are providing in § 375.403(a)(7) that the carrier may not require full payment for additional services required by the shipper that do not appear on the estimate and were performed by the mover en-route or at destination. We believe that all shipments based on non-binding estimates should be released to the shipper for no more than 110 percent of the original estimate and the remainder billed after 30 days.

Section 375.705 If a Shipment Is Transported on More Than One Vehicle, What Charges May I Collect at Delivery?

The AGCT requested the rules should not permit demand for payment until the entire shipment is delivered. Shipments are not split for the shipper's benefit, but only for the convenience of the carrier. Shippers should only be required to tender payment upon the carrier delivering the entire shipment.

AMSA comments that the proposed section is patterned after the existing regulation and, on split delivery shipments, it would authorize carriers to defer collection of transportation charges until final delivery or collection of a pro-rata portion of those charges based upon the quantity of goods included in the first delivery.

AMSA argues the AGCT also ignored the requirements of 49 U.S.C. 13707, that provides that carriers must not relinquish possession of goods until transportation charges are paid. Thus, collection of a pro-rata portion of transportation charges equal to the quantity of goods delivered is required by statute.

From an operational standpoint, AMSA alleges, industry data indicates that less than 2 percent of the shipments transported in 1994 moved in two or more vans. This percentage is nearly equal to the number of shipments (2 percent) that weighed more than 18,000 to 20,000 pounds, the normal capacity of a moving van, and required the service of two or more vans. AMSA stated this data came from the latest year for which such data was available from the AMSA Continuing Traffic Study, though AMSA did not submit the study as part of its comments. Therefore, AMSA contends that, contrary to the AGCT's position, most shipments that involve split deliveries are not the result of carrier convenience. They are dictated by operational requirements.

Response to Comments

FMCSA agrees with the AMSA comments on this section and has made no changes to the proposed rule.

Section 375.707 If a Shipment Is Partially Lost or Destroyed, What Charges May I Collect at Delivery?

The AGCT comments that it is unimaginable that a carrier can lose or destroy part of a shipment and yet demand full payment before being obligated to relinquish possession of the remainder of the shipment. It believes this provision is abhorrent and strongly anti-shipper. The proposed regulation is silent as to when the carrier must refund

the amount of the lost or destroyed shipment to the shipper. The AGCT argues the carrier should be forced to relinquish possession of a shipment and only bill the shipper for amounts due and owing 30 days after delivering the shipment to the shipper.

AMSA comments that as proposed, in the event of partial loss or destruction of a shipment, the mover must determine, at its own expense, the portion of the shipment that was delivered intact. It recommends that the wording of this provision be revised for clarity to avoid confusion concerning the basis for refunding charges that were applicable to lost or destroyed portions of shipments, as follows:

(b)(4) You must determine, at your own expense, the proportion of the shipment, based on actual or constructive weight, not lost or destroyed in transit.

AMSA argues that the AGCT's comments evoke the same degree of incredulity that the AGCT professes regarding the proposed rule. AMSA argues that carriers routinely process claims for loss or damage, the sum of which includes a portion of the transportation charge related to lost goods. It is difficult to understand the rationale that would deny payment on a 10,000 pound shipment if, for example, cartons weighing 500 pounds were not tendered at the time of delivery. In such a situation, the carrier is liable for the value of the lost goods and a pro-rata portion of the transportation charges. As AMSA had commented previously, the ICCTA requires that carriers “* * * shall give up possession at the destination of the property transported by it only when payment for the transportation or service is made.”

Response to Comments

FMCSA agrees with the AMSA comments on this section and has modified paragraph (b)(4) in the interim final rule accordingly.

Section 375.709 If a Shipment Is Totally Lost or Destroyed, What Charges May I Collect at Delivery?

The AGCT comments that carriers should be required to pay shippers the declared value of a lost or destroyed shipment on or before the last day of the contractually agreed on delivery date, less the specific valuation charge.

AMSA comments that under this section as proposed, movers will not be entitled to collect or require shippers to pay freight charges (including charges for accessorial or terminal services) when a shipment is totally lost or destroyed in transit. The provisions of paragraph (a)(2) appear to be in conflict by providing that “you may apply paragraph (a) of this section only to the transportation of household goods and not to charges for other services the individual shipper ordered.” AMSA is unclear as to the difference between the prohibited “accessorial services” charges referred to in paragraph (a) and the permitted “other services” charges referred to in paragraph (a)(2). AMSA recommends that paragraph (a)(2) be deleted to avoid confusion concerning the meaning of this section.

AMSA states that the settlement of claims for loss or damage does not fall into the simple scenario presented by the AGCT. All such claims must be substantiated. If a claimant declared a shipment value of $100,000, that does not automatically entitle the claimant to that amount in the event of a total loss. If the goods are actually valued at $75,000 and the claimant can substantiate that amount, the carrier will honor a claim for the same amount. 49 U.S.C. 14706 imposes liability “* * * for the actual loss or injury to the property * * *” The regulations require that claims for loss or damage be submitted, in writing in accordance with the requirements of 49 CFR part 370, and that they, inter alia, include a “certification of values [and] depreciation reflected thereon.” 49 CFR 370.7(b). Obviously, the processing and settlement of claims for loss or damage by carriers must follow the explicit requirements of the regulations.

Response to Comments

FMCSA agrees with AMSA's comments for this section and has changed the interim final rule accordingly.

Section 375.801 What Types of Charges Apply to Subpart H?

The AGCT again asserts the rules should require carriers to relinquish possession of shipments in an amount substantially less than 100 percent of the estimate.

Response to Comments

FMCSA does not agree with the AGCT comments. We believe that all binding estimates should be released to the shipper for no more than 100 percent of the original estimate. Sections 375.801-375.807 do not apply to non-binding estimates.

Section 375.805 If I Am Forced To Relinquish a Collect-on-Delivery Shipment Before the Payment of ALL Charges, How Do I Collect the Balance?

The AGCT comments that carriers should not be allowed to present freight or expense bills before the expiration of a 30-day period after delivery.

AMSA comments that in order to collect the balance of charges due on collect-on-delivery shipments, proposed § 375.805 would require carriers to present the freight bill within 7 days from the date the shipment was delivered at destination. Such a requirement is unreasonably short and unrealistic. Typically, a freight bill cannot be prepared until all shipment paperwork is received from the delivering driver. It is not uncommon for this process to consume most of the proposed 7-day period. A 7-day requirement is also inconsistent with the 15-day requirement contained in proposed § 375.807, and there is no justification for the two different time periods. It therefore recommends that § 375.805 be revised to read:

On “collect-on-delivery” shipments, you must present your freight bill for all transportation charges as provided in § 375.807(a).

Response to Comments

FMCSA agrees with AMSA's comment and has changed the rule text to be 15 days as required by § 375.807.

Section 375.807 What Actions May I Take To Collect the Charges Upon My Freight Bill?

The AGCT comments that shippers should not be automatically subjected to a one percent service charge by the operation of a regulation and believes the FMCSA should consider imposing a one percent ceiling on any service charge imposed by the carrier.

AMSA comments that as proposed, individual shippers will be assessed a service charge equal to one percent of the amount of the freight bill, subject to a $20 minimum charge, for extension of the normal credit period. AMSA believes this wording should be clarified to indicate that the one-percent fee applies in 30-day increments, rather than once for the entire extended credit period. For example, if the bill remains unpaid for 60 additional days following the

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