Does the aforementioned blog title have meaning to you as a shipper? Let’s say that your produce arrives at contract destination and your buyer makes a business decision to immediately ship out a portion of that load to one of his customers before requesting a USDA or CFIA inspection. Subsequently, the inspector shows up at your customer’s place of business and inspects the remaining cartons of produce. How does the Perishable Agricultural Commodities Act (PACA) interpret the results of a USDA inspection secured on less than the entire number of cartons shipped? The answer is found through precedent PACA Formal Decisions, or Case Law. The Fruit and Vegetable Dispute Resolution Corporation (DRC) also follows this similar formula established in PACA Case Law. When less than the entire load shipped is not available for inspection, it has been previously ruled by the PACA that any of those unavailable (missing) cartons would have to be considered as having 0% quality and condition defects. Therefore, those cartons with 0% defects are averaged with the cartons that were available at time of inspection.
The formula that you can use to determine the blended percentage average for the entire shipment of those cartons present at time of inspection and of those cartons missing are as follows:
Total checksum (total) defects reflected on USDA or CFIA inspection is multiplied by the number of cartons available at time of inspection and is then divided by the total number of cartons actually shipped. This will provide you the percent of scoreable defects.
Example: 900 cartons shipped and 500 cartons available at time of inspection, 400 missing cartons.
Inspection results: 15% discolored areas
20% checksum (total)
20 (total defects) x 500 cartons available=10,000
10,000 ÷ 900 cartons shipped = 11.11 % = calculated percent of scoreable defects
As noted from the above calculation with the percentage of 20% on the 500 cartons that were inspected is recalculated downward to the blended average of 11% when considering the 400 missing cartons with 0% and now the entire load meets good arrival standards or Good Delivery.
The USDA certificate is an unbiased third party evidence of the condition of the produce at contract destination and is considered prima facie evidence in a potential PACA proceeding, as well as in civil court. Remember, without a USDA or CFIA inspection there is no proof that the produce you shipped has any quality or condition defect. When you review a USDA or CFIA inspection, in addition to reviewing the pulp temperatures, also scrutinize the number of units (cartons or bags) still available at time of the USDA or CFIA inspection. The number of cartons available will provide you with the needed information to confirm if the inspection is representative of what the entire load of produce shipped looked like at contract destination. Any shortfall of cartons inspected in order to establish a representative sampling, requires you to engage your buyer in dialogue and make certain you look out for the best interests of you company and growers.
I encourage Western Growers regular members to utilize our services at Western Growers to review and help you interpret your USDA or CFIA inspections. Please email me at TommyO@wga.com with a copy of the USDA inspection certificate or call me at (949) 885-2269.