§10701. Standards for rates, classifications, through routes, rules, and practices

(a) A rate (other than a rail rate), classification, rule, or practice related to transportation or service provided by a carrier subject to the jurisdiction of the Interstate Commerce Commission under chapter 105 of this title must be reasonable. A through route established by such a carrier (including a rail carrier) must be reasonable. Divisions of joint rates by those carriers (including rail carriers) must be made without unreasonable discrimination against a participating carrier and must be reasonable.

[(b) Repealed. Pub. L. 96–448, title II, §201(b)(2), Oct. 14, 1980, 94 Stat. 1900 .]

(c) A common carrier providing transportation subject to the jurisdiction of the Commission under subchapter I or III of chapter 105 of this title may not discriminate in its rates against a connecting line of another carrier providing transportation subject to the jurisdiction of the Commission under either of those subchapters or unreasonably discriminate against that line in the distribution of traffic that is not routed specifically by the shipper.

(d) In a proceeding to determine whether a rate for transportation or service provided by a common carrier subject to the jurisdiction of the Commission under subchapter II, III, or IV of chapter 105 of this title complies with subsection (a) of this section, the good will, earning power, or certificate or permit under which that carrier is operating may not be considered or admitted as evidence of the value of the property of that carrier. When the carrier receives a certificate or permit under chapter 109 of this title, it is considered to have agreed to this subsection for itself and for all transferees of that certificate or permit.

(e) Except as provided in subsection (f), in proceedings to determine the reasonableness of rate levels for a motor carrier or group of motor carriers, or in proceedings to determine the reasonableness of a territorial rate structure where rates are proposed through agreements authorized by section 10706(b) of this title, the Commission shall authorize revenue levels that are adequate under honest, economical, and efficient management to cover total operating expenses, including the operation of leased equipment and depreciation, plus a reasonable profit. The standards and procedures adopted by the Commission under this subsection shall allow the carriers to achieve revenue levels that will provide a flow of net income, plus depreciation, adequate to support prudent capital outlays, assure the repayment of a reasonable level of debt, permit the raising of needed equity capital, attract and retain capital in amounts adequate to provide a sound motor carrier transportation system in the United States, and take into account reasonable estimated or foreseeable future costs. Any complaint brought against a motor carrier (other than a carrier described in subsection (f)(1)(A)) by a person (other than a motor carrier) for unreasonably high rates for past or future transportation shall be determined under this subsection.

(f) Procedures for Resolving Claims Involving Unfiled, Negotiated Transportation Rates.-

(1) In general.-When a claim is made by a motor carrier of property (other than a household goods carrier) providing transportation subject to the jurisdiction of the Commission under subchapter II of chapter 105 of this title, by a freight forwarder (other than a household goods freight forwarder), or by a party representing such a carrier or freight forwarder regarding the collection of rates or charges for such transportation in addition to those originally billed and collected by the carrier or freight forwarder for such transportation, the person against whom the claim is made may elect to satisfy the claim under the provisions of paragraph (2), (3), or (4) of this subsection, upon showing that-

(A) the carrier or freight forwarder is no longer transporting property or is transporting property for the purpose of avoiding the application of this subsection; and

(B) with respect to the claim-

(i) the person was offered a transportation rate by the carrier or freight forwarder other than that legally on file with the Commission for the transportation service;

(ii) the person tendered freight to the carrier or freight forwarder in reasonable reliance upon the offered transportation rate;

(iii) the carrier or freight forwarder did not properly or timely file with the Commission a tariff providing for such transportation rate or failed to enter into an agreement for contract carriage;

(iv) such transportation rate was billed and collected by the carrier or freight forwarder; and

(v) the carrier or freight forwarder demands additional payment of a higher rate filed in a tariff.

If there is a dispute as to the showing under subparagraph (A), such dispute shall be resolved by the court in which the claim is brought. If there is a dispute as to the showing under subparagraph (B), such dispute shall be resolved by the Commission. Pending the resolution of any such dispute, the person shall not have to pay any additional compensation to the carrier or freight forwarder. Satisfaction of the claim under paragraph (2), (3), or (4) of this subsection shall be binding on the parties, and the parties shall not be subject to chapter 119 of this title.

(2) Claims involving shipments weighing 10,000 pounds or less.-A person from whom the additional legally applicable and effective tariff rate or charges are sought may elect to satisfy the claim if the shipments each weighed 10,000 pounds or less, by payment of 20 percent of the difference between the carrier's applicable and effective tariff rate and the rate originally billed and paid. In the event that a dispute arises as to the rate that was legally applicable to the shipment, such dispute shall be resolved by the Commission.

(3) Claims involving shipments weighing more than 10,000 pounds.-A person from whom the additional legally applicable and effective tariff rate or charges are sought may elect to satisfy the claim if the shipments each weighed more than 10,000 pounds, by payment of 15 percent of the difference between the carrier's applicable and effective tariff rate and the rate originally billed and paid. In the event that a dispute arises as to the rate that was legally applicable to the shipment, such dispute shall be resolved by the Commission.

(4) Claims involving public warehousemen.-Notwithstanding paragraphs (2) and (3), a person from whom the additional legally applicable and effective tariff rate or charges are sought may elect to satisfy the claim by payment of 5 percent of the difference between the carrier's applicable and effective tariff rate and the rate originally billed and paid if such person is a public warehouseman. In the event that a dispute arises as to the rate that was legally applicable to the shipment, such dispute shall be resolved by the Commission.

(5) Effects of election.-When a person from whom additional legally applicable freight rates or charges are sought does not elect to use the provisions of paragraph (2), (3), or (4), the person may pursue all rights and remedies existing under this title.

(6) Stay of additional compensation.-When a person proceeds under this section to challenge the reasonableness of the legally applicable freight rate or charges being claimed by a carrier or freight forwarder described in paragraph (1) in addition to those already billed and collected, the person shall not have to pay any additional compensation to the carrier or freight forwarder until the Commission has made a determination as to the reasonableness of the challenged rate as applied to the freight of the person against whom the claim is made.

(7) Limitation on statutory construction.-Except as authorized in paragraphs (2), (3), (4), and (9) of this subsection, nothing in this subsection shall relieve a motor common carrier of the duty to file and adhere to its rates, rules, and classifications as required in sections 10761 and 10762 of this title.

(8) Notification of election.-

(A) General rule.-A person must notify the carrier or freight forwarder as to its election to proceed under paragraph (2), (3), or (4). Except as provided in subparagraphs (B), (C), and (D), such election may be made at any time.

(B) Demands for payment initially made after date of enactment.-If the carrier or freight forwarder or party representing such carrier or freight forwarder initially demands the payment of additional freight charges after the date of the enactment of this subsection and notifies the person from whom additional freight charges are sought of the provisions of paragraphs (1) through (7) at the time of the making of such initial demand, the election must be made not later than the later of-

(i) the 60th day following the filing of an answer to a suit for the collection of such additional legally applicable freight rate or charges, or

(ii) the 90th day following the date of the enactment of this subsection.

(C) Pending suits for collection made before or on date of enactment.-If the carrier or freight forwarder or party representing such carrier or freight forwarder has filed, before or on the date of the enactment of this subsection, a suit for the collection of additional freight charges and notifies the person from whom additional freight charges are sought of the provisions of paragraphs (1) through (7), the election must be made not later than the 90th day following the date on which such notification is received.

(D) Demands for payment made before or on date of enactment.-If the carrier or freight forwarder or party representing such carrier or freight forwarder has demanded the payment of additional freight charges, and has not filed a suit for the collection of such additional freight charges, before or on the date of the enactment of this subsection and notifies the person from whom additional freight charges are sought of the provisions of paragraphs (1) through (7), the election must be made not later than the later of-

(i) the 60th day following the filing of an answer to a suit for the collection of such additional legally applicable freight rate or charges, or

(ii) the 90th day following the date of the enactment of this subsection.

(9) Claims involving small-business concerns, charitable organizations, and recyclable materials.-Notwithstanding paragraphs (2), (3), and (4), a person from whom the additional legally applicable and effective tariff rate or charges are sought shall not be liable for the difference between the carrier's applicable and effective tariff rate and the rate originally billed and paid-

(A) if such person qualifies as a small-business concern under the Small Business Act (15 U.S.C. 631 et seq.),

(B) if such person is an organization which is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, or

(C) if the cargo involved in the claim is recyclable materials, as defined in section 10733.

( Pub. L. 95–473, Oct. 17, 1978, 92 Stat. 1371 ; Pub. L. 96–296, §13(a), July 1, 1980, 94 Stat. 803 ; Pub. L. 96–448, title II, §201(b)(1), (2), Oct. 14, 1980, 94 Stat. 1899 , 1900; Pub. L. 97–261, §9(a), Sept. 20, 1982, 96 Stat. 1109 ; Pub. L. 103–180, §2(a), (b), (g), Dec. 3, 1993, 107 Stat. 2044 , 2047, 2049.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
10701(a)	49:1(4) (related to standards), (5)(a), (b) (1st and 2d sentences).	Feb. 4, 1887, ch. 104, §1(4) (related to standards), (5)(a), (b) (less 7th and 8th sentences), 24 Stat. 379 ; June 29, 1906, ch. 3591, §1, 34 Stat. 584 ; Feb. 28, 1920, ch. 91, §400, 41 Stat. 474 ; June 19, 1934, ch. 652, §602(b), 48 Stat. 1102 ; Aug. 9, 1935, ch. 498, §1, 49 Stat. 543 ; Sept. 18, 1940, ch. 722, §2(c), (d), 54 Stat. 900 ; Aug. 2, 1949, ch. 379, §1, 63 Stat. 485 ; Feb. 5, 1976, Pub. L. 94–210, §202(a), (b), 90 Stat. 34 .
	49:316(a) (related to standards), (b) (related to standards), (d) (1st sentence); 318(a) (1st sentence related to standards).	Feb. 4, 1887, ch. 104, 24 Stat. 379 , §216(a) (related to standards), (b) (related to standards), (d) (1st sentence), (h), §218(a) (1st sentence related to standards); added Aug. 9, 1935, ch. 498, §1, 49 Stat. 558 , 560, 561; Sept. 18, 1940, ch. 722, §§22(b), 23(a), 54 Stat. 924 , 925.
	49:905(a) (1st sentence related to standards and 2d sentence), (b) (4th sentence); 906(e) (1st sentence related to standards).	Feb. 4, 1887, ch. 104, 24 Stat. 379 , §§305(a) (1st sentence related to standards and 2d sentence), (b) (4th sentence), (d) (1st sentence 2d cl., 2d sentence related to standards), 306(e) (1st sentence related to standards), 307(c); added Sept. 18, 1940, ch. 722, §201, 54 Stat. 934 , 935, 937; Aug. 24, 1962, Pub. L. 87–595, §2, 76 Stat. 398 .
	49:1004(a) (related to standards).	Feb. 4, 1887, ch. 104, 24 Stat. 379 , §§404(a) (related to standards), 406(c); added May 16, 1942, ch. 318, §1, 56 Stat. 286 , 288.
10701(b)	49:1(5)(b) (less 1st, 2d, 7th, and 8th sentences).
10701(c)	49:3(4) (1st sentence 2d cl., 2d sentence related to standards).	Feb. 4, 1887, ch. 104, §3(4) (1st sentence 2d cl., 2d sentence related to standards), 24 Stat. 380 ; Feb. 4, 1920, ch. 91, §405, 41 Stat. 479 ; Aug. 9, 1935, ch. 498, §1, 49 Stat. 543 ; restated Sept. 18, 1940, ch. 722, §5(e), 54 Stat. 903 .
	49:905(d) (1st sentence 2d cl., 2d sentence related to standards).
10701(d)	49:316(h). 49:907(c). 49a:1006(c).

The section consolidates and restates the source provisions for clarity. The words "rates" and "transportation" are substituted for "rate, fare, or charge" and "service . . . in the transportation of passengers or property", except as related to freight forwarders, in view of the definitions of "rate" and "transportation" in section 10102 of the revised title.

Subsection (a) is added to eliminate repetition of the word "reasonable" throughout the revised title. The word "reasonable" is substituted for "just and reasonable" for clarity, consistency, and to conform to modern usage. See the revision note to section 10101 of the revised title. The 2d clause and last sentence of 49:1(5)(a) and the 2d sentence of 49:1(5)(b) are omitted as surplus. The words "discrimination against" are substituted for "prefer or prejudice" as being inclusive. See the revision note to section 10101 of the revised title.

In subsection (b), the words "or not shown to be" are omitted as surplus. The words "(hereafter in this paragraph referred to as the 'proponent carrier')" are omitted as unnecessary. The word "unless" is substituted for "except where" for clarity. The words "For the purposes of the preceding sentence" are omitted as surplus. The last sentence of subsection (b)(1) is substituted for 49:1(5)(b) (last sentence) to eliminate unnecessary terms.

In subsection (c), the word "unreasonably" is substituted for "unduly" for consistency. The last sentence of 49:905(d) is omitted as unnecessary in view of the restatement. The words "discriminate against" are substituted for "prejudice" as being more inclusive. See the revision note to section 10101 of the revised title.

In subsection (d), 49:316(h), 907(c), and 1006(c) are consolidated into one subsection patterned after 49:316(h). The words "is considered" are substituted for "shall be deemed" for clarity. The words "the provisions of" are omitted as surplus.

References in Text

The date of the enactment of this subsection, referred to in subsec. (f)(8)(B) to (D), is the date of enactment of Pub. L. 103–180, which was approved Dec. 3, 1993.

The Small Business Act, referred to in subsec. (f)(9)(A), is Pub. L. 85–536, July 18, 1958, 72 Stat. 384 , as amended, which is classified generally to chapter 14A (§631 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 631 of Title 15 and Tables.

Section 501 of the Internal Revenue Code of 1986, referred to in subsec. (f)(9)(B), is classified to section 501 of Title 26, Internal Revenue Code.

Amendments

1993-Subsec. (e). Pub. L. 103–180, §2(b), (g), substituted "Except as provided in subsection (f), in" for "In" and inserted at end "Any complaint brought against a motor carrier (other than a carrier described in subsection (f)(1)(A)) by a person (other than a motor carrier) for unreasonably high rates for past or future transportation shall be determined under this subsection."

Subsec. (f). Pub. L. 103–180, §2(a), added subsec. (f).

1982-Subsec. (e). Pub. L. 97–261 struck out "of property" after "for a motor carrier" and "group of motor carriers".

1980-Subsec. (a). Pub. L. 96–448, §201(b)(1), inserted "(other than a rail rate)" after "A rate", "(including a rail carrier)" after "such a carrier", and "(including rail carriers)" after "those carriers".

Subsec. (b). Pub. L. 96–448, §201(b)(2), struck out subsec. (b) which provided that a rate of transportation by a rail carrier which was below a reasonable minimum rate for the service provided did not violate subsec. (a) of this section if that rate contributed to the going concern value of that carrier, a rate increased to the going concern value was not prohibited if otherwise reasonable and was presumed reasonable if it did not exceed the increment costs of rendering the transportation, a rate for transportation that equaled or exceeded the variable cost of providing the transportation was presumed reasonable if it contributed to the going concern of the rail carrier, and the Commission determine, with specific limitations, the variable and incremental costs. See section 10701a of this title.

Subsec. (e). Pub. L. 96–296 added subsec. (e).

Effective Date of 1982 Amendment

Amendment by Pub. L. 97–261 effective on 60th day after Sept. 20, 1982, see section 31(a) of Pub. L. 97–261, set out as a note under section 10101 of this title.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–448 effective Oct. 1, 1980, see section 710(a) of Pub. L. 96–448, set out as a note under section 10101 of this title.

Applicability of Procedures for Resolving Claims Involving Unfiled Negotiated Transportation Rates

Section 2(c) of Pub. L. 103–180 provided that: "The amendments made by subsections (a) and (b) of this section [amending this section] shall apply to all claims pending as of the date of the enactment of this Act [Dec. 3, 1993] and to all claims arising from transportation shipments tendered on or before the last day of the 24-month period beginning on such date of enactment."

Report Concerning Procedures for Resolving Claims Involving Unfiled Negotiated Transportation Rates

Section 2(d) of Pub. L. 103–180 directed Interstate Commerce Commission, not later than 18 months after Dec. 3, 1993, to transmit to Congress a report regarding whether there exists a justification for extending applicability of amendments made by section 2(a) and (b) of Pub. L. 103–180 (amending this section) beyond the period specified in section 2(c) of Pub. L. 103–180 (set out above).

Alternative Procedure for Resolving Disputes

Section 2(e) of Pub. L. 103–180 provided that:

"(1) General rule.-For purposes of section 10701 of title 49, United States Code, it shall be an unreasonable practice for a motor carrier of property (other than a household goods carrier) providing transportation subject to the jurisdiction of the Commission under subchapter II of chapter 105 of such title, a freight forwarder (other than a household goods freight forwarder), or a party representing such a carrier or freight forwarder to attempt to charge or to charge for a transportation service provided before September 30, 1990, the difference between the applicable rate that is lawfully in effect pursuant to a tariff that is filed in accordance with chapter 107 of such title by the carrier or freight forwarder applicable to such transportation service and the negotiated rate for such transportation service if the carrier or freight forwarder is no longer transporting property between places described in section 10521(a)(1) of such title or is transporting property between places described in section 10521(a)(1) of such title for the purpose of avoiding the application of this subsection.

"(2) Jurisdiction of commission.-The Commission shall have jurisdiction to make a determination of whether or not attempting to charge or the charging of a rate by a motor carrier or freight forwarder or party representing a motor carrier or freight forwarder is an unreasonable practice under paragraph (1). If the Commission determines that attempting to charge or the charging of the rate is an unreasonable practice under paragraph (1), the carrier, freight forwarder, or party may not collect the difference described in paragraph (1) between the applicable rate and the negotiated rate for the transportation service. In making such determination, the Commission shall consider-

"(A) whether the person was offered a transportation rate by the carrier or freight forwarder or party other than that legally on file with the Commission for the transportation service;

"(B) whether the person tendered freight to the carrier or freight forwarder in reasonable reliance upon the offered transportation rate;

"(C) whether the carrier or freight forwarder did not properly or timely file with the Commission a tariff providing for such transportation rate or failed to enter into an agreement for contract carriage;

"(D) whether the transportation rate was billed and collected by the carrier or freight forwarder; and

"(E) whether the carrier or freight forwarder or party demands additional payment of a higher rate filed in a tariff.

"(3) Stay of additional compensation.-When a person proceeds under this subsection to challenge the reasonableness of the practice of a motor carrier, freight forwarder, or party described in paragraph (1) to attempt to charge or to charge the difference described in paragraph (1) between the applicable rate and the negotiated rate for the transportation service in addition to those charges already billed and collected for the transportation service, the person shall not have to pay any additional compensation to the carrier, freight forwarder, or party until the Commission has made a determination as to the reasonableness of the practice as applied to the freight of the person against whom the claim is made.

"(4) Treatment.-Paragraph (1) of this subsection is enacted as an exception, and shall be treated as an exception, to the requirements of sections 10761(a) and 10762 of title 49, United States Code, relating to a filed tariff rate for a transportation or service subject to the jurisdiction of the Commission and other general tariff requirements.

"(5) Nonapplicability of negotiated rate dispute resolution procedure.-If a person elects to seek enforcement of paragraph (1) with respect to a rate for a transportation or service, section 10701(f) of title 49, United States Code, as added by subsection (a) of this section, shall not apply to such rate.

"(6) Definitions.-For purposes of this subsection, the following definitions apply:

"(A) Commission, household goods, household goods freight forwarder, and motor carrier.-The terms 'Commission', 'household goods', 'household goods freight forwarder', and 'motor carrier' have the meaning such terms have under section 10102 of title 49, United States Code.

"(B) Negotiated rate.-The term 'negotiated rate' means a rate, charge, classification, or rule agreed upon by a motor carrier or freight forwarder described in paragraph (1) and a shipper through negotiations pursuant to which no tariff was lawfully and timely filed with the Commission and for which there is written evidence of such agreement."

Prior Settlements and Adjudications

Section 2(f) of Pub. L. 103–180 provided that: "Any claim that, but for this subsection, would be subject to any provision of this Act [see Short Title of 1993 Amendment note set out under section 10101 of this title] (including any amendment made by this Act) and that was settled by mutual agreement of the parties to such claim, or resolved by a final adjudication of a Federal or State court, before the date of the enactment of this Act [Dec. 3, 1993] shall be treated as binding, enforceable, and not contrary to law, unless such settlement was agreed to as a result of fraud or coercion."

Limitation on Statutory Construction

Section 9 of Pub. L. 103–180 provided that: "Nothing in this Act [see Short Title of 1993 Amendment note set out under section 10101 of this title] (including any amendment made by this Act) shall be construed as limiting or otherwise affecting application of title 11, United States Code, relating to bankruptcy; title 28, United States Code, relating to the jurisdiction of the courts of the United States (including bankruptcy courts); or the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1001 et seq.]."

Section Referred to in Other Sections

This section is referred to in sections 10705, 10711, 10731, 10925, 11126 of this title.