Let’s say that a shipper’s produce arrives at contract destination and then the buyer immediately ships out a portion of that load to their customer before requesting a USDA or CFIA inspection. When the federal inspector arrives at the buyer’s facility, they inspect the remaining cartons of produce. How would the Perishable Agricultural Commodities Act (PACA) interpret the results of a USDA inspection secured on less than the entire number of cartons shipped?

Bryan Nickerson

As a shipper, it is prudent to fully understand both your contractual obligations and your rights when handling a potential rejection. A shipment cannot be deemed rejected if it is either:

  1. Unloaded (except for the purpose of inspection); or
  2. Unilaterally diverted during transit

Under PACA law, both such actions constitute acts of acceptance. For proper cause, your buyer may reject a shipment by providing a prompt and proper notification to the shipper. The PACA defines timeliness in rejecting a shipment as:

Bryan Nickerson

Several Western Growers members recently asked me for a checklist of questions to ask when product arrives at contract destination when there has been a federal inspection secured. In other words, can we provide a guidance document to the sales staff to ask the correct questions and determine, with accuracy, liability under the terms of the sales contract.   

The following is a checklist of questions that I require the answers to before an opinion can be rendered for a WG shipper as to whether or not a commodity complies with contract at destination:

Bryan Nickerson

Shippers often call me to discuss the results of their timely USDA inspection and for help determining if it meets contract specifications. There are two distinct types of defects listed on the inspection that can help you determine that. When reading a USDA inspection certificate, the inspector will list two types of defects: Quality (or permanent) and Condition.

Bryan Nickerson

Fresh produce shippers are used to dealing with unique retailer demands getting their product to market. One such challenge, first introduced by Walmart U.S. in 2017, is the retail giant’s on-time in-full (OTIF) policy. As the name indicates, this logistics compliance program requires product to arrive at Walmart’s distribution centers on time and in full. Shipments that arrive early, late, short, or not otherwise as specified in the Purchase Order, are all subject to fines. 

Bryan Nickerson

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Produce Insights

Stay up to date with best practices for selling and shipping fresh produce with our insider blog. Produce Insights offers expert guidance on all things related to PACA, product arrival issues, product guarantees, collections on slow pay, disputed contracts and so much more.

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