The American Trucking Assns. (ATA) and the National Industrial Transportation League (NITL) have unveiled a Model Truckload Motor Carrier/Shipper Agreement
for use by motor carriers and shippers in structuring their contractual relationships. The goal of the Model Agreement is to promote uniformity in contract provisions so as to increase efficiency in negotiations and provide a balanced agreement for shippers and carriers.
As trade associations of motor carriers and shippers respectively, ATA and NITL observed that too often one or both parties do not fully understand their rights and obligations under their current contractual agreements, leading to disputes, unforeseen liabilities -- even expensive litigation. To rectify that situation, the Model Agreement eliminates as much legalese as possible, substituting plain English terms. It is designed to help ensure that essential elements of the intended relationship are covered in ways the parties intended and understand.
The trade groups stressed that use of the Model Agreement is intended as a starting point for negotiations and that use of any of its sections or of the agreement as a whole is purely voluntary. The Model Agreement covers many standard or common provisions, but must be customized to reach the exact relationship desired and the needs of the individual shipper and carrier. All provisions related to rates, charges, limitation of liability, level of carrier insurance, and other related areas are left blank and must be negotiated. Optional appendices cover scope of service provisions, freight and accessorial charges, fuel surcharge programs, and a uniform freight documentation form that may be used as a pick-up and delivery receipt. Many of the sections include Commentaries that provide background information and sometimes alternative language that can be used in the section discussed.
The Model Agreement project was started by ATA in 2002 and in the fall of that year the U.S. Department of Justice issued a "business review letter" that effectively stated that creation and distribution of a voluntary motor carrier/shipper model contract would not raise antitrust concerns. In 2003, ATA invited the NITL, on behalf of shippers, to join it in the development of the Model Agreement to ensure that it fairly represented the interests of each group. Over the past year, the two trade groups have worked closely to develop an evenhanded agreement that favors neither party, but benefits both by reducing negotiating costs and eliminating problems caused by poor drafting and confusing provisions.
ATA President and CEO Bill Graves said: "this achievement is unprecedented and a big step forward in motor carrier/shipper relations. It benefits both parties by encouraging efficient and effective negotiations and the creation of meaningful contractual relationships."