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Motor carrier interests.-Cartwright Van Lines, Inc., which describes itself as a small to medium size independent carrier views the proposed rules as both economically both economically inflationary and competitively stifling. It states that the proposed regulations would greatly increase tariff rates inasmuch as the carrier would have to protect itself against the increased liability. It explains that rates would have to be increased so that proper insurance coverage could be afforded by the carrier. It complains that if this happened, then the larger household goods carriers could be provided proportionately cheaper insurance premiums because of volume, and that this would be a positive economic factor to the benefit of the larger carrier over the smaller independent carrier. Rather than the Commission's proposal, Cartwright would prefer that a carrier not be required to assume any liability whatsover for specified items (documents, currency, money, jewelry, watches, stamp collections, or precious stones) of which the carrier had not been furnished prior written notice by the shipper.

The Wm. Fridrich Moving & Storage Co. argues that to do away with the limits to movers' cargo liability would be "foolhardy.” Moreover, it disagrees with the proposal to create carrier liability for third-party services. It argues that a mover has not the ability or the inclination to know what local ordinances require for such things as plumbing and electrical work in the limitless number of communities in which he may work. Imperial Van Lines contends that a carrier's inability to require identification of articles of extraordinary value would put it in a position of writing the shipper a "blank check." It argues that a carrier's inability to exclude from liability damage to mechanical or electrical items where there is no external evidence of damage would put it at the mercy of shipper's opinion as to the existence of such a loss, inasmuch as a carrier is not equipped or qualified to determine mechanical or electrical conditions. It comments that, as a general rule, insurance companies will not accept liability for losses to articles of extraordinary value unless they are so identified, and that, accordingly, it does not seem reasonable to expect a carrier to do so. Lawrence Moving & Storage Co., objects to the proposed amendment, arguing that the elimination of liability exclusions would greatly increase the cost to motor carriers which could only be reflected in higher insurance rates and transportation costs to the general public.

Lester Moving & Storage Co. also objects to the proposed rules and states that the new requirements, when taken together with past

added "burdens" to the common carriers of household goods, would force more people to use U-haul service, which assertedly would result in much damage to household goods. Similarly, Miller Van Lines and Tillamoak-Portland Auto Freight object to the proposed regulations and contend that, if allowed to be instituted, small carriers would be unable to continue operations. Security Van Lines comments that if carriers are now to assume the added responsibility for the third-party service performed, then carriers should be permitted by the Commission to include in their tariffs "arranging for appliance servicing" charges to reimburse the carriers both for the time involved to arrange for the appliance serving and for the added liability that they are assuming. It states. that before a mover should be forced to accept responsibility for owner-packed cartons, standards of packing should be set, not only for the test strength of the cartons, but also for the methods used to pack these cartons. It adds that there should be a place on the uniform bill of lading for the shipper to certify that he has met these standards in packing his own belongings. Security further states that if it is not the customer's responsibility to specifically list all articles of extraordinary or unusual value on the bill of lading, then it should be his responsibility to check these articles immediately upon receipt and advise of any loss or damage. If this is not done, the claim should be denied without recourse. Security feels that the liability exclusion for insects, moths, and vermin should not be eliminated from the contract terms. It states that many times these insects are inherent in the furniture and damage becomes apparent after months of storage-in-transit or handling. Security also expresses concern that the proposed regulation fails to grant any protection to the carrier against the unscrupulous consumer.

Trans-American Van Service states that subsection (i) of the proposed subsection 1056.16(c) would require the household goods carrier to guarantee to the shipper that any frozen foods tendered to the carrier shall be part of the carrier's liability despite the fact that no single household goods carrier has the ability within its current fleet structure to guarantee the refrigeration of frozen food or other refrigerated articles. Accordingly, it suggests that the proposed subsection (c)(i) should be changed to clearly state (1) that no liability need be assumed for perishable articles involved in the shipment without the knowledge of the carrier and, (2) that a carrier who accepts for shipment frozen items may impose such conditions as may be necessary to insure the safe transportation of such commodities. Trans-American further comments that the proposed

subsection 1056.16(d) would place an unfair burden upon the carrier to notify the shipper of something of which he has already been advised on at least two prior occasions.' It notes that the Commission's own booklet (Form BOp 103, revised 1974), which is required to be handed to the shipper prior to his signing the Order for Service, advises the shipper that at the end of the specified storage-in-transit period, the shipment enters a permanent storage status, subject to conditions set by the local warehouse. Additionally, it notes that the vast majority of household goods carrier tariffs clearly define the carrier's liability and the amount of time that the carrier's liability will cover a shipment that is in storage.

Wheaton Van Lines, Inc., agrees with our conclusion that a carrier should not be allowed to require prior notice of “an article of extraordinary value," acknowledging that this term is ambiguous and often interpreted against the shipper. However, it states that fairness requires that a carrier be able to require prior notice of certain specified items of value such as documents, jewelry, precious stones, et cetera. Wheaton further suggests that after the Commission makes its final determination on limitations of carrier liability, it should modify the BOp 103 booklet so as to include all terms and conditions of the household goods carrier bill of lading, since the shipper does not otherwise see these terms until the day that the shipment is loaded and the goods are already in the van.

Wheaton states that subsection (i) of the proposed subsection 1056.16(c) is ambiguous. In its view, this section may be interpreted so as to impose liability on the carrier for damage to frozen foods and other articles requiring refrigeration even in instances when such items are included in the household goods shipment without the knowledge of the carrier. To eliminate this ambiguity, Wheaton suggests that the parenthetical language be deleted from the proposed rule altogether. If the rule were to be clarified as proposed, then the only question remaining would relate to what the Commission would consider “reasonable conditions” necessary to ensure the safe transportation “of frozen foods and other articles requiring refrigeration." Accordingly, Wheaton suggests that a carrier be allowed to impose in its tariff rules the following conditions necessary to insure the safe transportation of such commodities:

1. A requirement that the carrier be notified prior to the time of shipment of the inclusion in the shipment of any frozen foods or other articles requiring refrigeration. 2. A requirement that the food be frozen when repacked for shipment.

3. A requirement that the frozen food be removed from the food freezer and packed in insulated cartons with sufficient dry ice to withstand the trip.

4. A requirement that the carrier could specify in its tariff a limit of miles and a limit of hours for the transportation of frozen food.

5. A requirement that no storage in transit be provided.

Wheaton also contends that the proposed subsection (c)(i) can be interpreted as including live plants within the term "perishable articles." It argues that a carrier should not be expected to be liable for loss or damage to live plants, whether or not the carrier has notice of its inclusion in the shipment. It notes that presently many customers request carriers to transport plants, preferring to take the risk that these will die en route, rather than leave the plants at origin. Accordingly, Wheaton states that the proposed rule should be amended so as to allow carriers to transport live plants absent any fear of liability for their loss or damage in transit.

With respect to subsection (ii) of the proposed subsection 1056.16(c), Wheaton states that a carrier should be allowed to disclaim liability for loss or damage caused by or resulting from strikes, lockouts, labor disturbances, riots, civil commotions, or the acts of any person or persons taking part in any such occurrence or disorder." It further argues that the carrier should not be liable for loss or damage resulting from any “acts of God," irrespective of the valuation of the shipment. Finally, Wheaton argues that the carrier should be allowed to preclude liability for loss or damage caused by or resulting from breakage of china, glassware, bric-a-brac or similar articles of a brittle or fragile nature unless packed by the carrier or unless such breakage results from negligence of the carrier when the shipper has released the value of each article in the shipment to a value not exceeding 60 cents per pound per article.

Truck Underwriters Association insures a number of household goods carriers against liability for loss of or damage to property being transported by them. It states that the effect of the proposed amendment would be to require the removal of important exclusions from insurance contracts covering this type of transportation. In its view, the removal of these exclusions would inevitably result in a frequency of fraudulent claims. It explains that the carrier would have no defense against claims for loss of or destruction to items of high value and that, similarly, a carrier would have no way of knowing of the existence of fragile items in shipper-packed cartons. Finally, it argues that the present liability limitations are as

important to the shipper as to the carrier. It states that an increase in the number of claims resulting from the additional liability assumptions required by the proposed amendment would have a severe financial impact upon the carriers, forcing out of business a number of household goods movers, and thus reducing the service available to the public. It states that, although this financial burden could be overcome by tariff increases, the public again would suffer through the paying of higher rates. Mr. Bennett B. Watson, employee relocation coordinator for Imco Services, agrees with this view, stating that the proposed regulations would force very substantial rate increases from the movers.

The Household Goods Carriers' Bureau, an association of more than 1,500 interstate carriers of household goods, expresses agreement with certain aspects of the proposed regulation, but takes issue with several other aspects. It agrees that the given term "articles of extraordinary value" should be dropped, but argues that carriers should be allowed to require that certain specified items must be declared in writing on the shipping document as a condition precedent to carrier liability. Accordingly, the Carriers' Bureau wishes to add a subsection to the proposed subsection 1056.16(c) whereby a carrier would not have to assume liability for loss of or damage to certain named articles unless such items are specifically listed on the shipping document.2

The Carriers' Bureau notes that section 1(c) of the contract terms and conditions of the present uniform household goods bill of lading allows a carrier to disclaim liability for loss or damage caused by or resulting "from defects or inherent vice of the article, including susceptibility to damage because of atmospheric conditions such as temperature and humidity or changes therein." In our interim report, we stated that the term "defect or inherent vice of the article" is ambiguous and should not be used. Accordingly, we did not include this provision under the liability exclusions set out

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With respect to 1056.16(c), the Carriers Bureau recommends changing subsections (i) and (ii) to (ii) and (iii), respectively, and adding a new subsection (i) as follows:

(i) No liability need be assumed for loss of or damage to any article of the following kinds UNLESS such article is specifically listed on the shipping document:

bills of exchange, bonds, bullion or precious metals, currency, deeds, documents, evidences of debt, credit cards, firearms, money, gems, jewelry, watches, precious stones, pearls, gold, silver, or platinum articles, stock certificates, securities, stamp collections, stamps, letters or packets of letters, musical instruments of rare quality or historical significance, first editions or autographed copies of books, antique furniture, heirlooms, paintings, sculptures, works of art. and hobby collections.

'Said terms are set out in appendix A to our interim report, 121 M.C.C. 347, 375. 121 M.C.C. 347, 363.

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