Four Winds Forwarding, Inc. v. United States

34 Cont. Cas. Fed. 75,382, 13 Cl. Ct. 510, 1987 U.S. Claims LEXIS 185
CourtUnited States Court of Claims
DecidedOctober 19, 1987
DocketNo. 611-84C
StatusPublished
Cited by2 cases

This text of 34 Cont. Cas. Fed. 75,382 (Four Winds Forwarding, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Four Winds Forwarding, Inc. v. United States, 34 Cont. Cas. Fed. 75,382, 13 Cl. Ct. 510, 1987 U.S. Claims LEXIS 185 (cc 1987).

Opinion

ORDER

MOODY R. TIDWELL, III, Judge:

This transportation rate case initially came before the court on plaintiff’s motion for summary judgment, defendant’s motion for dismissal and, in the alternative, its cross-motion for summary judgment. Plaintiff had contracted with defendant to ship defendant’s household goods and unaccompanied baggage to overseas destinations. The program under which the goods were shipped had a rate escalation provision designed to protect contractors against ocean carrier cost increases that were beyond their control. Plaintiff requested a rate adjustment for increased costs to its contract. Plaintiff claimed the tariff rates it relied upon to formulate its bids for oversea shipments of military household goods and unaccompanied baggage were legally applicable rates thus entitling it to recover rate increases, i.e., the differences between the rates bid and the more expensive legally applicable rates in effect at the time of actual shipment. Defendant denied the claims maintaining that plaintiff used legally inapplicable rates in preparing its bids so that any increased costs were not covered by the rate escalation provision and that the legally applicable rate which plaintiff should have bid remained unchanged from the time plaintiff submitted bids to the time of actual shipment. This court in Four Winds Forwarding, Inc. v. United States, opinion of June 30, 1987, found for defendant and ordered the Clerk to dismiss the Complaint. Plaintiff subsequently moved for reconsideration pursuant to RUSCC 59. The court ordered defendant to respond to plaintiff’s motion to ensure that both parties were given a full opportunity to address all of the issues. Plaintiff’s motion for reconsideration was granted as evidenced by the briefing and oral argument that followed.1 The prior Opinion and judgment are vacated and superseded by this Order.

FACTS

Four Winds Forwarding, Inc. (FWF), is a freight forwarder of household goods, unaccompanied baggage, and used automobiles. FWF participated in the International Through Government Bill of Lading (ITGBL) program under the direction of the Military Traffic Management Command (MTMC). In accordance with the ITGBL program, a shipment of military household goods (HHG) and unaccompanied baggage (UB) is tendered to a freight forwarder for movement from point of origin to point of destination under the forwarder’s responsibility as a common carrier. The forwarder packs the tendered shipment in a container or containers, selects the underlying ocean carrier to be used, and establishes the routing of the shipment. The forwarder’s rela[512]*512tionship to the underlying carrier is that of a shipper and, as such, the forwarder purchases transportation services from the ocean carrier and pays the carrier’s tariff rates in effect at the time of shipment.

MTMC regularly solicited freight forwarders to submit bids applicable to ITGBL shipments. The bids, which are submitted as single factor rates2, are solicited for six-month procurement periods referred to as volumes. Since tariff rates change from time to time, a pegged quotation date (PQD) is established for each volume by MTMC and freight forwarders are required to submit bids based on rates in effect on that PQD.

In 1972, MTMC established the Single Factor Rate Adjustment (SFRA) program to reimburse forwarders for legally applicable underlying carrier rate increases which first became public knowledge after the established PQD for each volume. This allowed freight forwarders to bid for contracts, using a rate in effect on the PQD, and, to file for a rate adjustment when tariff rates did, in fact, increase by the time of actual shipment. According to SFRA program guidelines, a rate adjustment was permitted when:

1) The change in purchased marine or air transportation costs was not less than 2.5%.
2) No viable underlying service remained available at the former rate level.
3) The request for adjustment was based upon underlying rate increases that became public knowledge after the PQD.
4) An administrative request for adjustment was filed with MTMC within sixty days after the applicable volume period expired.

Standing International Through Government Bill of Lading Program Rate Filing Instructions and Procedures, Chapter VI, Section 6001 (1979). The SFRA program protected forwarders from fiscally disastrous and unforeseeable rate increases which would uncontrollably diminish expectations of contracts awarded to low bidders. Indeed, MTMC encouraged freight forwarders to seek out the lowest, legally applicable underlying ocean transportation rates. In a message disseminated to all ITGBL participants in July 1982, defendant stated: “MTMC anticipates, but does not direct, that carriers will construct their single factor rates based upon the applicable rates which provide the most economical, efficient and viable service best suited to the needs of their own operation.”

On September 29, 1982, MTMC solicited bids for Volume 46; shipments of military HHG and UB. Volume 46 covered shipments from April 1, 1983, to September 30, 1983,3 and MTMC set the PQD for Volume 46 bids as October 29, 1982. Plaintiff believed the lowest, legally applicable rates on the PQD were the Freight All Kinds (FAK) rates. It is undisputed that plaintiff submitted bids to MTMC based upon various tariffs’ FAK rates in effect on the PQD, and was awarded a contract. Subsequent to the submission of plaintiff’s bids, and during the term of Volume 46, the tariffs were changed by the ocean carriers to preclude plaintiff’s use of FAK rates for military HHG and UB shipments. As a result, plaintiff was forced to ship the tendered goods at more expensive specific Military HHG and UB rates and pay the difference out of pocket. The record shows that plaintiff shipped in single containers from California ports and multiple containers from Atlantic and Gulf ports.

In December 1983, plaintiff filed seven SFRA claims for increases in marine transportation costs arising from its Volume 46 shipments from Atlantic, Gulf and California ports. The seven requests were based on the differences between plaintiff’s rates as bid and the more expensive specific Mili[513]*513tary HHG and UB rates applicable at the time of actual shipment. On January 13, 1984, defendant denied plaintiffs SFRA claims on grounds that FAK rates were never an appropriate basis for computing adjustments under the SFRA program. Plaintiff requested reconsideration by MTMC but was again denied rate adjustments. In a subsequent letter to plaintiff dated February 13, 1984, defendant reaffirmed its previous position and added that the SFRA program applied only to increases in single container rates not multiple container rates — which are less expensive per container to ship. Plaintiff thereafter filed its complaint in this court.

The primary thrust of plaintiff’s argument upon reconsideration was that the court, relying on defendant’s argument visa-vis rates, disposed of the case solely upon a determination that the rate plaintiff actually paid was no greater at the time of shipment than it was at the PQD. Accordingly, plaintiff incurred no increased shipping costs and was not entitled to an SFRA rate increase.

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Bluebook (online)
34 Cont. Cas. Fed. 75,382, 13 Cl. Ct. 510, 1987 U.S. Claims LEXIS 185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/four-winds-forwarding-inc-v-united-states-cc-1987.