I have noticed over the last couple of years that more shippers have been assuming the responsibility of filing truck claim on FOB transaction, when the buyer rejects the product for alleged abnormal transportation, particularly when the shipper values the business of the buyer too much to invoke the FOB contract. In these situations what was initially an FOB no grade contract has pretty much turned into a delivered sale because now the shipper is pursuing the truck claim.
This usually occurs when the product arrives at contract destination, and the buyer performs an in-house inspection. These potential truck claims usually occur when the buyer’s in-house inspection reveals some type of abnormal temperature and the product may be showing some condition problems.
Based on in-house inspections, many times the buyer tends to reject the product back to the shipper and the shipper readily accepts the rejection in order to maintain a good relationship with the buyer. Having accepted the rejection the shipper must now deal with the salvage issue and any potential truck claim.
Based on this scenario the five following steps are recommended:
- Find A Home For The Product - First and foremost the shipper needs to find a home for the product where it can be worked on a consignment basis for the benefit of the whom it may concern. In my opinion, unless there is virtually no value, I would never reject the product to the trucker because you as a shipper should always be in control of the net proceeds of the salvage. Also, keep in mind that you have a duty to mitigate any damages.
- USDA Inspection - Once the product has been placed to be handled for the shipper’s account, a USDA inspection should be immediately secured to document the product was damaged due to abnormal transportation.
- Notify The Carrier - After the USDA inspection is secured verifying the condition problem(s) and abnormal pulp temperatures the carrier needs to be placed “on notice” of a claim and this “notice “should always be documented in writing to establish a record.
- Get A Temperature Recording Download - If it is a temperature related problem you should request the carrier to provide a download from the smart unit (TRU) which, in addition to any temperature recorder accompanying the shipment, will help determine the in transit temperatures.
- Determine Value of Claim - Once the product has been sold, subtracting the net proceeds from your original FOB invoice value will determine the value of your formal claim.
After the USDA inspection has been examined along with the temperature recording device and the carrier download, a determination of the carrier liability can be made.
If you are having problems resolving carrier claims, please do not hesitate to contact me at (949) 885-2269 for assistance. One of the key things to remember in the claim process is that a USDA inspection must always be secured; never reject a load back to the carrier surrendering control over the net proceeds. Always gather as much information as you can as it relates to temperatures that may have been too hot or too cold, and never hesitate to call for me for advice during the process.