Consignee Liability for Freight Charges: The 13706 Notice

Consignee liability for freight charges is the default, not the exception. If you receive the freight, the carrier can generally come after you for the charges, and marking “bill the other party” on a bill of lading does not by itself move that liability somewhere else. There is one federal escape hatch, and it is narrow: under 49 U.S.C. 13706, a consignee that is acting purely as an agent, and that gives the carrier written notice of that agency status before delivery, is liable only for the rates billed at the time of delivery. The beneficial owner of the freight owes anything additional.

Read that again for what it does not say. It does not say a consignee who checks a box on a BOL is off the hook, and it does not say the carrier has to bill the shipper. It says an agent-consignee, having given written notice before delivery, is capped at the delivery-time charges. Everyone else, including the consignee who owns the goods and the agent who never sent the notice, is exposed to the full amount plus whatever gets rebilled later.

Almost nobody sends the notice. That is the gap this post is about.

What 13706 actually does and does not do

The statute deals with who pays when the party billed is not the party that ordered the transportation. The mechanic it creates has three moving parts.

First, the agent condition. The protection runs to a consignee that is “an agent only,” meaning it has no beneficial title to the property. A third-party warehouse receiving goods it does not own, a customs broker, a distribution agent, a contract packager: these are the profile the section contemplates. A consignee that owns the freight it receives is a beneficial owner and gets nothing from this section.

Second, the written notice before delivery. The agent has to tell the carrier, in writing, before delivery, that it is an agent and identify the beneficial owner. Not on the invoice. Not in a phone call. Not after the pallets are on the floor.

Third, the cap, and the trap attached to it. With valid notice, the agent-consignee is liable only for the rates billed at the time of delivery, and the beneficial owner is liable for additional rates that surface later. But a consignee that misidentifies the beneficial owner stays liable. Get the name wrong, name a party that has dissolved, or name a corporate entity that is not the actual owner, and the protection collapses back onto you.

So the section is not a general “bill the other party” rule. It is a specific, conditional cap for a specific kind of consignee that does a specific thing on time.

Why “bill the other party” on the BOL is weaker than it looks

Prepaid and collect markings, third-party billing blocks, and “bill to” fields are billing instructions. They tell the carrier where to send the paper. Federal rules on what a bill of lading must contain do not turn those markings into a release of liability.

Look at what 49 CFR 373.101 requires a motor carrier’s receipt or bill of lading to show: consignor and consignee names, origin and destination, number of packages, description of the freight, and weight, volume or measurement where those matter to rating. That is it. There is no required field for who bears liability for the charges, because the regulation is about documenting the shipment, not allocating payment risk.

Where payment liability actually lives:

• The transportation contract or carrier agreement. Who is the party contracting for service, and what does it say about non-recourse, third-party billing, and remedies on non-payment.
• The BOL’s own terms, including any non-recourse or “Section 7” style provision, which is a contract term the parties sign, not a regulation.
• Common-law and statutory principles about who benefits from the carriage, which is where the beneficial-owner concept in 13706 comes from.
• Whatever the parties actually did, because a consignee that has paid freight bills for two years has a habit the carrier will cite.

None of that is a reason to stop marking bills correctly. A clean prepaid marking routes the invoice and is the first thing anyone looks at in a dispute. The point is narrower: the marking is evidence of intent, not a legal shield.

The written notice, in practice

If you are a warehouse, a 3PL receiving on behalf of a customer, or any consignee that does not own what it signs for, this is the procedure to build.

What the notice has to accomplish

Given the statutory language, a defensible notice does four things:

1. States clearly that you are receiving as agent only and hold no beneficial title to the property.
2. Identifies the beneficial owner by exact legal entity name, with address and a billing contact.
3. Identifies the shipments it covers, specifically enough that a carrier can match it: BOL numbers, PRO numbers, a named account, or a standing arrangement with an effective date.
4. Reaches the carrier before delivery, with something that proves when.

That last item is the one that fails. Email with a timestamp, a portal submission with a receipt, or a signed acknowledgment all work. A notation added to a delivery receipt at the dock is not before delivery, and the driver is not the carrier’s billing department.

Standing notice versus per-shipment notice

A per-shipment notice is airtight and unworkable at volume. A standing notice, sent once per carrier per customer account and referencing all shipments consigned to your facility for that owner, is what most agent-consignees actually run. It is more exposed on the “before delivery” element for any given load, so keep the sent-and-acknowledged record permanently and re-send it when the carrier relationship, the account structure, or the owner’s legal name changes.

Whether a standing notice satisfies the statute for a particular shipment is decided on the facts, not assumed in your favor. Treat it as strong evidence, not certainty, and price the residual risk into the customer agreement.

Notice template

Subject: Notice of agency status under 49 U.S.C. 13706 - [Facility name]
        deliveries for [Beneficial owner legal name]

To: [Carrier legal name], Billing / Credit Department

[Facility legal name], located at [address], receives freight at this
location as agent only. We hold no beneficial title to property delivered
to this facility for the account described below.

Beneficial owner: [Exact legal entity name]
Address: [Street, city, state, ZIP]
Billing contact: [Name, title, email, phone]

Shipments covered: all shipments tendered to [Carrier] consigned to
[Facility legal name] at the address above for the account of the
beneficial owner named, effective [date] until we notify you in writing
otherwise. [Or: BOL numbers listed below.]

This notice is given before delivery of the covered shipments so that
liability for charges beyond those billed at the time of delivery rests
with the beneficial owner, per 49 U.S.C. 13706.

Please acknowledge receipt in writing and note this status on the account.

[Name, title]
[Facility] | [Phone] | [Email]

Send it to the credit or billing department, not to a sales rep. Keep the acknowledgment. If none comes back within a week, send it again and note the resend.

Who gets billed, who is liable, and how they come apart

Read the last row carefully. Third-party billing arrangements are contract structures, not statutory ones. When a broker fails to pay a carrier, the carrier will often look upstream to the shipper or downstream to the consignee, and how that resolves turns on the contract language and the facts, not on a BOL marking. The clauses that decide it are the same ones worth reading before you sign anything, which is the ground covered in what a rate confirmation and a carrier invoice have to agree on.

The rebill problem, which is the whole reason this matters

Nobody sends a 13706 notice to protect against the invoice that arrives on time. They send it to protect against the one that arrives five months later.

Additional charges surface constantly: a reweigh, a reclassification, a corrected fuel surcharge, an accessorial that a billing clerk added after the fact. Those are the charges the agent-consignee is most exposed to, because they were not “billed at the time of delivery” and the goods left your building long ago.

Two clocks matter here. Under 49 U.S.C. 13710, a carrier that wants to bill charges beyond what it originally billed must do so within 180 days of your receipt of the original bill to preserve its collection rights, and you have 180 days from receipt to contest a bill and preserve your right to challenge it. Separately, 49 CFR 377.203 sets a standard 15-day credit period beginning the day after presentation of the freight bill, extendable by published tariff to no more than 30 calendar days, and allows a carrier to assess late-payment or collection charges only if it issues a revised freight bill within 90 days after the authorized credit period expires.

An agent-consignee with valid notice has a clean answer to a late rebill: this charge was not billed at delivery, we gave written notice of agency status before delivery, and liability for additional rates sits with the beneficial owner we identified. An agent-consignee without notice has to argue the merits of the charge itself, on a shipment it did not book, priced under a rate it never saw. The full set of these windows is laid out in every freight billing deadline that can cost you money.

What to do when a bill lands on the wrong party

Whether or not you have notice protection, the response sequence is the same, and none of it involves ignoring the invoice.

Do not ignore it. An unanswered freight bill becomes a collection file, and collection files reach credit reports and stop future capacity. Respond in writing, quickly, even if the response is “you have billed the wrong party.”

Ask for the bill to be complete first. Under 49 CFR 373.103, a freight or expense bill must show consignor and consignee names, shipment date, origin and destination, package count, freight description, weight or volume, the exact rates assessed, and total charges due with the nature and amount of each charge, plus route, participating carriers, transfer points and remittance address. You cannot evaluate a liability question on a bill that does not say what it is charging for. Also check that this is not the same shipment arriving under a second number, which is a different problem entirely and is worked through in how to tell a true duplicate freight invoice from a legitimate rebill.

State your position with the record attached. If you sent a 13706 notice, attach it with its timestamp and any acknowledgment, name the beneficial owner again, and ask the carrier to redirect the additional charges. If you did not send one, say plainly which party contracted for the transportation and why the charges belong there, and expect a harder conversation.

Separate the liability question from the merits. Whether you owe the charge and whether the charge is correct are two arguments. Run both: dispute the amount on the evidence, and dispute the party on the notice. If the charge is wrong, the liability question may never need answering. The same discipline applies to a contested accessorial, worked through in the two-document proof behind a liftgate dispute.

If you already paid something you did not owe, switch tracks. Payment turns this into an overcharge claim, or into a duplicate payment refund request if the same shipment was paid twice, each with its own clock: under 49 CFR 378.8, the processing carrier must pay, decline or settle a written overcharge claim within 60 days of receipt unless you agree in writing to extend.

Be fair about the carrier’s position

The carrier delivered freight and wants to be paid for it. When a broker collapses or a shipper stops answering, the consignee is often the only solvent party left in the chain, and pursuing it is not sharp practice. Carriers generally are not trying to bill the wrong party; they are trying to bill someone who will pay.

That framing tells you what actually resolves these. Give the carrier a party who will pay. A notice naming a real, reachable, solvent beneficial owner with a billing contact does more for you than any argument about whose box was checked.

The checklist

If you receive freight you do not own:

1. Confirm your actual status per customer. Agent only with no beneficial title, or owner. Only the first is inside 13706.
2. Confirm the beneficial owner’s exact legal entity name against a contract or registration, not against a customer’s email signature. Misidentification kills the protection.
3. Send written notice to each carrier’s credit or billing department before delivery, standing per account or per shipment, and keep proof of when it was sent.
4. Chase the acknowledgment, and re-send on any change of carrier, account or owner entity.
5. Store notices and acknowledgments where an AP clerk can find them in a minute, indexed by carrier and account.
6. On any bill addressed to you for freight you did not own, respond in writing the same week.
7. Check the bill against 49 CFR 373.103 before arguing about it, and check whether it is a rebill or a duplicate.
8. Watch the 180-day windows in both directions, and calendar the 60-day response clock if you have already paid.
9. Put the liability allocation in your customer agreement too, because a federal cap on additional rates is not the same as an indemnity from the party that actually benefits.

Step nine is the one operators skip and later wish they had not. 13706 addresses a slice of the problem: additional rates, for agents, with notice. Everything outside that slice, including the rates billed at delivery, is a contract question between you and the party whose freight you are holding.

Sources

• 49 U.S.C. 13706, Liability for payment of rates (Cornell LII)
• 49 U.S.C. 13710, Information and records, billing and contesting windows (Cornell LII)
• 49 CFR 373.101, Motor carrier receipts and bills of lading (Cornell LII)
• 49 CFR 373.103, Freight or expense bills (Cornell LII)
• 49 CFR 377.203, Payment of freight charges and credit periods (Cornell LII)
• 49 CFR 378.8, Overcharge claim resolution within 60 days (Cornell LII)