[Federal Register Volume 72, Number 116 (Monday, June 18, 2007)]
[Notices]
[Pages 33557-33559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11722]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Amendment No. 5 to Released Rates Decision No. MC-999]


Released Rates of Motor Common Carriers of Household Goods

AGENCY: Surface Transportation Board, DOT.

ACTION: Request for comments on proposed changes to the authorization 
for motor common carriers of household goods to offer ``released 
rates,'' under which the carriers limit their liability to consumers 
for loss of or damage to the household goods transported.

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SUMMARY: The Board proposes, and seeks comment on, three changes to its 
released rates authorization, to enhance the protection of consumers 
whose household goods are damaged or lost by motor common carriers.

DATES: Comments are due July 30, 2007. Reply comments (if any) are due 
August 13, 2007.

ADDRESSES: Send an original and 10 copies of any comments, referring to 
Amendment No. 5 to Released Rates Decision No. MC-999, to: Surface 
Transportation Board, 395 E Street, SW., Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: Lawrence C. Herzig, (202) 245-0282. 
[Federal Information Relay Service (FIRS) for the hearing impaired: 1-
800-877-8339].

SUPPLEMENTARY INFORMATION: Prior to the enactment of the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users (SAFETEA-LU), Pub. L. 109-59, 119 Stat. 1144 (2005), motor 
carriers of household goods (HHG) were generally held liable, under 49 
U.S.C. 14706, for the actual loss or injury they caused to the property 
they transported. Because most HHG are ``used,'' the carrier's 
liability was for the depreciated value of the goods. However, under 49 
U.S.C. 14706(f), HHG carriers could, with the permission of the Board, 
limit their liability by offering ``released rates,'' under which a

[[Page 33558]]

carrier's liability is limited to a value established by written 
declaration of the shipper or by written agreement. The Board has 
authorized HHG carriers to offer released rates under certain terms and 
procedures.
    The Board's current released rates orders--Released Rates of Motor 
Common Carriers of Household Goods, 5 S.T.B. 1147 (2001), and Released 
Rates of Motor Common Carriers of Household Goods, Amendment No. 4 to 
Released Rates Decision No. MC-999 (STB served Apr. 22, 2002, and July 
26, 2006)--authorize HHG carriers to limit their liability for damage 
to, or loss of, the goods in their care upon a written declaration of 
the shipper. Under these orders, HHG carriers could avoid the default 
cargo liability level by offering their shippers a choice of two 
alternative carrier-liability options based on the rate that the 
shipper agreed to pay for the transportation of its goods. Under one 
option, the carrier's cargo liability is limited to 60 cents per pound 
per article (``60-cents option'') if the shipper writes a valuation of 
``60 cents per pound'' on the bill of lading/contract. In that event, 
the shipper pays only a base rate for the shipment. Alternatively, for 
an additional charge, the shipper may obtain ``full value protection'' 
for the shipped goods (the ``FVP option''), meaning that the carrier is 
liable for the replacement value of the lost or damaged goods (up to 
the pre-declared value of the shipment), or, at the carrier's option, 
for restoring damaged goods to their prior condition.
    In section 4207 of SAFETEA-LU, Congress changed the statutorily 
prescribed, standard cargo liability of HHG carrier from the actual 
(i.e., depreciated) value of lost or damaged goods to the replacement 
value of those goods unless the shipper waives in writing that level of 
protection. See 49 U.S.C. 14706(f)(2), (3).\1\ Thus, the standard (or 
default) cargo liability of a HHG carrier is now the replacement value 
of the goods (for example, the value of a comparable new television to 
replace a used television that was lost in a household move, rather 
than the depreciated value of the used television).
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    \1\ The statutory amendment required a change to the released 
rates authorization. See Released Rates of Motor Common Carriers of 
Household Goods, Amendment No. 4 to Released Rates Decision No. MC-
999 (STB served June 13, 2007). As noted in that decision, we 
construe the new statutory default level of liability as the 
equivalent of what formerly was the FVP option.
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    Also in SAFETEA-LU, at section 4215, Congress directed the Board to 
review the current Federal regulations regarding the level of cargo 
liability protection provided by motor carriers that transport HHG and 
to revise the regulations, if necessary, to provide enhanced protection 
in the case of loss or damage. After receiving public comments, the 
Board published its review in Review of Liability of Motor Common 
Carriers of Household Goods, STB Ex Parte No. 662 (Review) (STB served 
Aug. 9, 2006).
    In the Review proceeding, the Consumer Protection Division of the 
Office of the Attorney General of Maryland (Consumer Protection 
Division) suggested ways to condition the released rates authorization 
to enhance consumer protection. We propose to adopt the Consumer 
Protection Division's two suggested changes, and ask for comment on 
those two proposed changes as well as a third proposed change. In 
addition, we invite suggestions on any other conditions that could help 
to ensure that consumers understand the consequences of selecting the 
60-cents option when shipping their HHG.
    Requiring All Shipping Documents to Include Full Value Protection. 
The Consumer Protection Division indicated that each year it receives 
complaints from consumers who did not know that they had shipped their 
goods under the 60-cents option until they filed claims with the moving 
company for property that was lost, stolen, or damaged during the move. 
According to the Consumer Protection Division, moving companies often 
include in their basic moving contract a waiver of the consumer's right 
to FVP, and consumers sign contracts without understanding that they 
are agreeing to limit the moving company's liability.
    As suggested by the Consumer Protection Division, the Board 
proposes to require moving companies to provide, in any order for 
service, contract form, or bill of lading, a provision for, and a 
written estimate of, the cost of the move under FVP. If the moving 
company provides only the required estimate at FVP and the shipper 
accepts, the shipper will have the standard protection established in 
the statute: Replacement value for goods lost or damaged. Moving 
companies also could include in the documents an estimate of the cost 
under the 60-cents option. When the moving company provides two 
estimates (the required FVP estimate and a voluntary 60-cents option 
estimate), consumers will likely inquire about the difference between 
the two estimates and be alerted to the difference in the available 
levels of carrier liability. We seek comment on this proposed change.
    Requiring All Shipping Documents to Include Full Value Protection 
Estimate. The Consumer Protection Division indicated that each year it 
receives complaints from consumers who did not know that they had 
shipped their goods under the 60-cents option until they filed claims 
with the moving company for property that was lost, stolen, or damaged 
during the move. According to the Consumer Protection Division, moving 
companies often include in their basic moving contract a waiver of the 
consumer's right to FVP, and consumers sign contracts without 
understanding that they are agreeing to limit the moving company's 
liability.
    As suggested by the Consumer Protection Division, the Board 
proposes to require moving companies to provide, in any order for 
service, contract form, or bill of lading, a provision for, and a 
written estimate of, the cost of the move under FVP. If the moving 
company provides only the required estimate at FVP and the shipper 
accepts, the shipper will have the standard protection established in 
the statute: Replacement value for goods lost or damaged. Moving 
companies also could include in the documents an estimate of the cost 
under the 60-cents option. When the moving company provides two 
estimates (the required FVP estimate and a voluntary 60-cents option 
estimate), consumers will likely inquire about the difference between 
the two estimates and be alerted to the difference in the available 
levels of carrier liability. We seek comment on this proposed change.
    Written Waiver of Full Value Protection on Separate Document. We 
also propose, as the Consumer Protection Division suggests, to require 
that any waiver of FVP by the consumer must be in clear and 
understandable language that is designed to ensure that the waiver has 
been made knowingly, and must be on a document separate from the bill 
of lading contract. We ask for comment on: (1) The wording that would 
most easily explain the consequences of waiving the standard FVP; and 
(2) whether having the waiver on a separate document would better alert 
consumers to the consequences of waiving FVP.
    Resetting the Assumed or Minimum Valuation for a Shipment. The 
current released rates orders provide for an assumed valuation and a 
minimum valuation for a shipment in certain circumstances. The assumed 
valuation arises when a shipper elects the FVP option but neglects to 
write a valuation figure on the bill of lading or contract. The minimum 
valuation comes into

[[Page 33559]]

play when a FVP shipper writes in a value that is obviously too low.
    Under the 2001 released rates order, both the assumed valuation and 
the minimum valuation were set at $5,000 or $4 times the actual total 
weight in pounds of the shipment, whichever is greater. 5 S.T.B. at 
1149. Recently, the Board authorized HHG carriers to make annual 
inflation adjustments to the $4-per-pound figure, based on the 
percentage changes since a base year, by applying a commonly used 
index.\2\ See Released Rates of Motor Common Carriers of Household 
Goods, Amendment No. 4 to Released Rates Decision No. MC-999 (STB 
served July 26, 2006).
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    \2\ The index is the Consumer Price Index--All Urban Consumers 
(All Items), published by the Bureau of Labor Statistics of the 
United States Department of Labor (CPI-U).
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    At the time the Board authorized the $4-per-pound figure, a moving 
industry group estimated that the average actual (depreciated) value of 
HHG shipments was $4.50 per pound.\3\ 5 S.T.B. at 1154. Thus, the 
approved $4-per-pound figure approximated the then-default level of 
carrier liability: Actual (depreciated) value. As previously explained, 
the default level of liability is now the replacement value of the HHG, 
not the depreciated value. Because the $4-per-pound figure, even as 
adjusted by the CPI-U, likely is nowhere near the new statutory default 
level of liability (i.e., replacement value), it would be more 
appropriate to apply a new per-pound value that reasonably approximates 
the average replacement cost of a HHG shipment. Therefore, we solicit 
the public's comment on an appropriate new figure for a minimum and 
assumed per-pound value.\4\
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    \3\ The industry group was the Household Goods Carriers' Bureau 
Committee, which is composed of HHG carriers.
    \4\ We will not eliminate the $4-per-pound minimum while we 
develop a new minimum valuation because the $4 level at least 
provides some protection for shippers who do not declare a value, or 
who use unscrupulous movers who might suggest unconscionably low 
declared values for HHG shipments.
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    Board decisions and notices are available on our Web site at http://www.stb.dot.gov.

    Decided: June 11, 2007.

    By the Board, Chairman Nottingham, Vice Chairman Buttrey, and 
Commissioner Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7-11722 Filed 6-15-07; 8:45 am]
BILLING CODE 4915-01-P