If you, as a shipper, have a vendor agreement with a buyer that specifies arrival conditions such as maximum pulp temperature, then this blog is for you!

For example, your customer may stipulate that the product must pulp at 41°F or lower upon arrival for acceptance. If the product arrives with a pulp temperature above 41°F, the buyer has the right to reject it, with or without a USDA inspection scoring condition defects. When this occurs and your customer rejects your product due to elevated pulp temperatures, you must determine who is at fault and whether a claim exists.

In such situations, it’s often with a valued customer, and pursuing a claim might jeopardize the relationship. Therefore, the carrier becomes the potential party allegedly responsible for the high pulp temperatures at the destination. When analyzing a carrier claim, you must determine both the monetary damage and the physical damage to the product. You have two burdens: proving the carrier’s mishandling caused physical damage and demonstrating your monetary loss.

For the physical damage, it is crucial to secure a USDA inspection on the product as soon as possible. If the inspection reveals condition defects associated with elevated pulp temperatures, you have grounds for a potential claim against the carrier. However, if the inspection shows little to no condition defects and meets Good Delivery Guidelines, pursuing a claim against the carrier will be difficult. Even if you suffer a monetary loss, without evidence of deterioration due to carrier negligence, a successful claim is unlikely.

When shipping under a specified vendor agreement, you are usually dealing with customers who use preferred carriers aware of strict temperature requirements. Inform the carrier or its driver at the shipping point of the pulp temperature requirement at the destination.

If your product arrives with elevated pulp temperatures and is rejected, here’s what you should do:

1. Obtain a Federal Inspection: Secure a USDA or CFIA inspection to report condition defects. If the inspection shows excess defects, you have a strong truck claim. If the product meets Good Arrival Guidelines, pursuing a settlement with the carrier will be challenging.
2. Demonstrate Damage: You must prove the carrier damaged the product in transit to claim compensation. Without a federal inspection, it is nearly impossible to prove this, as carriers typically require evidence of damage.

Due to the increasing prevalence of such supplier agreements, consider making these sales Delivered instead of FOB. If a carrier claim arises, your customer will look to you to pursue it. Controlling the freight bill can give you more negotiating power.

By following these steps and securing the necessary documentation, you can better navigate the complexities of vendor agreements and carrier claims.

On a final note, I cannot over-emphasize the need to see the procedure through to the end, following these points:

• Do not simply abandon or reject a shipment to the carrier and expect to be paid.
• Working with the carrier to move a shipment for salvage sale does not mean that you are relieving the carrier from any potential liability.
• Make it clear to the carrier that you are assisting in arranging a prompt and efficient sale to minimize any further loss for all concerned.
• Always, always document every step so there is no misunderstanding.

If you have any questions or would like me to review your sales documentation, please contact me at 949.885.4808 or [email protected].