CMC Lump-Sum & Binding Estimate Types 3 — Questions and Answers
Question 1: A carrier delivers a shipment under a binding estimate but the customer refuses to pay because they believe items were damaged. What must happen before the carrier can release the goods?
- The carrier may hold the shipment until the full binding estimate amount is paid (Correct answer)
- The customer may pay 110% of the binding estimate and retrieve goods pending dispute
- The carrier must release the goods immediately upon any damage claim
- The carrier files an FMCSA complaint before releasing the shipment
Correct answer: The carrier may hold the shipment until the full binding estimate amount is paid
Under a binding estimate, the carrier has a lien on the shipment and may hold it until the agreed binding price is paid, separate from any damage claims.
Question 2: Which of the following is NOT typically included in a lump-sum moving estimate?
- Origin and destination service charges
- Third-party specialty services added after estimate (Correct answer)
- Standard fuel surcharges disclosed at time of estimate
- Basic valuation coverage included in the quote
Correct answer: Third-party specialty services added after estimate
Third-party services added after the estimate was provided are generally not covered by the original lump-sum price.
Question 3: How does a binding estimate differ from a non-binding estimate when actual shipment weight exceeds the estimate?
- Binding: customer pays actual charges; Non-binding: customer pays estimated price
- Binding: customer pays estimated price; Non-binding: customer pays actual charges (Correct answer)
- Both require the customer to pay actual charges plus a 10% fee
- Both are capped at 110% of the original estimate
Correct answer: Binding: customer pays estimated price; Non-binding: customer pays actual charges
With a binding estimate, the price is locked at the estimate; with a non-binding estimate, the customer pays actual charges (subject to the 110% rule at delivery).
Question 4: A CMC is reviewing a lump-sum proposal for a corporate relocation client. Which factor makes lump-sum pricing most advantageous for the client?
- The carrier assumes all risk of underestimating shipment weight
- The client can add unlimited items without cost adjustment
- The client has budget certainty regardless of actual shipment size variations (Correct answer)
- The carrier is required to absorb all fuel cost increases
Correct answer: The client has budget certainty regardless of actual shipment size variations
Lump-sum pricing gives corporate relocation clients predictable, fixed costs that simplify budgeting regardless of minor variations in shipment size.
Question 5: Under a binding estimate, if the carrier's actual costs significantly exceed the estimate due to an unforeseeable access issue at destination, the carrier's remedy is to:
- Bill the customer for all additional access charges automatically
- Issue an order for additional charges requiring customer signature before delivery
- Absorb the additional costs as per the binding agreement (Correct answer)
- Void the binding estimate and re-quote at actual cost
Correct answer: Absorb the additional costs as per the binding agreement
Under a binding estimate, the carrier is generally obligated to honor the agreed price and absorb unforeseen costs unless a specific exception was written into the estimate.
Question 6: What document must accompany a binding estimate to be considered complete under FMCSA household goods rules?
- A signed arbitration agreement
- Your Rights and Responsibilities When You Move booklet (Correct answer)
- A copy of the carrier's tariff schedule
- A DOT safety rating certificate
Correct answer: Your Rights and Responsibilities When You Move booklet
FMCSA requires carriers to provide the 'Your Rights and Responsibilities When You Move' booklet along with estimates to ensure consumers are informed.
Question 7: A binding estimate is provided on March 1 for a move scheduled for June 15. The carrier's tariff rates increase on May 1. What is the carrier obligated to do?
- Honor the March 1 binding estimate price for the June 15 move (Correct answer)
- Notify the customer and issue a revised higher estimate
- Cancel the move and rebook under new tariff rates
- Charge the higher rate only for services used after May 1
Correct answer: Honor the March 1 binding estimate price for the June 15 move
A binding estimate, once accepted, locks in the price regardless of subsequent tariff changes; the carrier must honor the agreed price.
CMC Lump-Sum & Binding Estimate Types 3
A carrier delivers a shipment under a binding estimate but the customer refuses to pay because they believe items were damaged.
What must happen before the carrier can release the goods?