RIP: Trucking Company Undercharges
January 23, 2001
The book can finally be closed on the trucking company "undercharge epidemic."
The Journal of Commerce
newspaper reports the Surface Transportation Board has settled the last undercharge case stemming from the 1990s. In these incidents, a bankrupt carrier or its trustee tried to collect from a shipper the difference between what they paid and the actual rate the carrier had on file with the now defunct Interstate Commerce Commission.
The STB ended the matter by denying the effort of the bankruptcy estate of Willig Freight Lines in trying to collect claims from Shuford Mills for hauls made from 1993 and 1994.
Trucking company undercharges became widespread in the early 1990s, thanks to a 1990 ruling by the U.S. Supreme Court that found such claims were valid. The decision help spur many undercharge claims, eventually totaling some $27 billion being billed to shippers.
One widely reported case in particular illustrates the epidemic. Lloyd Whitaker was the trustee for long-bankrupt trucking company PIE Nationwide. Whitaker made it his mission in life to recover every penny he could. He went so far to even try to force a group of nuns to pay the difference in the filed rate and what they actually paid the carrier for services. Whitaker was unapologetic, saying he was just doing his job.
Congress finally stepped in and passed the Negotiated Rates Act of 1993, allowing the ICC, and later the STB, to say claims of undercharges were wrong. The bill was pushed by current Secretary Of Transportation nominee Normal Mineta when he was in Congress.