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Part 3. Back to Basics: Inspections DRC perspective

This three-part series on the importance of destination inspection services has included guest interviews with Tom Oliveri, Director of Trade Practices & Commodity Services at Western Growers and Jim Gordon, Operations Manager at Ippolito Produce. This third instalment provides DRC’s perspective shared by President and CEO, Fred Webber.

One of the most requested services asked of the DRC Trading Assistance Staff is to interpret the results of inspections held to document the quality and condition of produce on arrival. Whether the inquiry is about size, condition, colour, quality, temperature, ripeness or any number of potential issues, it is the inspection held at the buyer’s dock that is the cornerstone of resolving most disputes.

As the seller is hundreds, if not thousands, of miles away they cannot see the product. The seller relies on that inspection to tell them what the product looks like, give them a clear picture of the problem and an indication of what caused it.

The United States and Canada provide a dedicated fruit and vegetable inspection service. Inspectors working for these services receive ongoing training and are held accountable to providing inspections based on consistent terms and sampling procedures. These inspections are backed up by work notes and can be reviewed by supervisory personnel. There are also procedures for appeal inspections when either party believes there has been an error or the samples taken by the inspector do not reflect the real condition of the load.

DRC receives inquiries from firms regarding private (non Government) surveys. While some of these inquiries are specifically about the defects shown on the report, most of the inquiries focus on whether or not the parties agreed to use a private survey in lieu of a government inspection.

We acknowledge there may be good reason to use private companies even when a government inspection is available.  However, the fact that we continue to receive calls objecting to private surveys is evidence that a better understanding of responsibilities is needed.

A party claiming an agreement to use an alternate service was established has the burden of proving such an agreement was reached. We frequently advise members that this means it was discussed, understood, and agreed (DUA) that a private survey would be called rather than a government one.

From DRC’s perspective, private surveys, like internal quality control reports, are often used by firms who deal regularly and have established a trust relationship. For those firms trading infrequently, especially if it is a first time transaction, we rarely see that an “agreement” was reached before a private survey was requested or performed. If the use of a private survey was not discussed, understood, and agreed to, the survey may be of no value.

In the US and Canada a federal inspection is the default requirement and the DRC Good Inspection Guidelines specify that these Federal Inspection services are to be used unless they are not available.  

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Your responsibilities and obligations as a new DRC member (or a little refresher if you’re an old hat at being a DRC member)

You’ve just become a new member of DRC and you’re sitting there pondering your obligations and wondering what responsibilities you now have to shoulder. Well let us help you with that. Here are the two most important things to note:

  1. You must follow DRC Trading Standards and DRC Transportation standards unless you have mutually agreed upon other terms.
  2. See number one (and read on to learn where to find them).

How do you ensure you are following DRC Trading Standards and Transportation Standards? Well, you may recall receiving a handy By-Laws and Operating Rules manual that outlines your obligations and responsibilities. The standards are also available for your convenience online under section 4 of our bylaws and operating rules at: https://fvdrc.com/by-laws-and-operating-rules/.

A lot of people come to us not understanding that DRC membership provides rights and responsibilities to which you are bound and by which you must abide. Among those responsibilities are a set of default trading standards and guidelines. You can make a deal with your trading partner but when a problem occurs certain standards apply, for example:

  • When a load arrives you have a responsibility to report a problem in a timely manner (see our previous post on timely notice of a problem) and then either accept the shipment or make a proper rejection
  • You must know when to call for an inspection
  • There are specifics  around accounting for distressed or consigned product

Understanding when there is a problem and dealing with it in the right way is key. Failure to act on these issues when they arise will most likely result in lost money and equally important, the potential loss of a good relationship with your client/supplier. Not notifying the shipper of a problem, not getting an inspection, and not doing your accounting properly, are just a few examples of not following proper procedure and may impact your ability to claim damages.

As an FOB shipper, your main responsibility is to ship product in suitable shipping condition. You must assure that at shipping point the product is loaded in such a way that it will meet the mutually agreed upon quality and condition requirements or DRC Good Arrival Guidelines at destination, assuming transit time and temperatures are normal.

As a transportation company, you have to ensure you pick up the product in a timely manner, that the truck is in sound condition, and that transit time and temperatures are followed according to the contract (BOL), among other responsibilities.

One of the benefits of DRC membership is that you can call the DRC Help Desk with any questions. Our team is here to assist you and our services are available in English, French and Spanish. Prior to a transaction, we can help you do your due diligence and understanding contract terms. During or after a transaction, DRC can help with inspections, reporting damages, proper accounting or any other questions you may have.

For more information please call or email the DRC Help Desk at:

DRC Help Desk | 613-234-0982 | [email protected]

 

 

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Importance of Documenting Temperatures

We were recently contacted by a grower/shipper who sold blueberries to a buyer in North America on an FOB basis. The grower/shipper claimed that pulp temperatures at loading were fine and the driver signed the BOL clean. When the load arrived at destination, the buyer reported that the product was not in good condition and was pulping warm. A federal inspection was requested and confirmed the blueberries were warm and the product did not make good arrival according to DRC Trading standards. The transportation company did not accept the claim arguing the product was loaded warm and the grower/shipper wanted our advice.

In order to evaluate the file and help the parties involved in the transaction determine liability, our Trading Assistance Help Desk requested the following information: Bill of lading (BOL), loading checklist, the temperature recorder readout, the reefer unit download and the federal inspection:

  1. BOL: The BOL showed the temperature to be maintain during transit was 33F on continuous mode and pulp temperatures at loading were 34F. It also showed the driver signed the BOL without any notations.
  2. Loading checklist: In this particular case, a loading checklist was available and it showed that the driver of the truck signed the loading checklist which indicated pulp temperatures were between 33F-34F.
  3. The temperature recorder readout: This document showed that the product was subject to warmer than desired temperatures during the trip.
  4. Reefer unit download: The reefer download indicated the reefer was set at 33F continuous and the truck was properly precooled. However, after a few hours in route, a big discrepancy between the supply air column and the return air column started to show. The supply air column indicated the discharged air temperatures ranged from 11°F to 58° The return air column remained constantly close to 36F which was unusual.
  5. Federal inspection: A federal inspection was requested in a timely manner and the report indicated that in fact pulp temperatures were above normal range (temp) and the product was received in deteriorated condition.

Taking into consideration the above information submitted, we were able to assist our member in establishing that based on the evidence this was a transportation claim. The evidence pointed towards product being loaded at the right temperature with undesirable temperatures developing during transit. The inspection confirmed warmer than desired temperatures upon arrival and high percentage of deterioration on the product.  In addition, the temperature discrepancy in the reefer unit download’s supply air column suggested that there could have been a problem with the reefer unit or improper circulation in the trailer.

It is the parties’ responsibility to follow certain procedures to protect themselves when shipping, hauling, or receiving product. Documenting and maintaining the cold chain is one of the most important parts of the transaction.

Regarding temperatures, the following is a brief summary of the responsibilities each party has in a transaction.

On an FOB transaction the shipper is responsible for maintaining accurate records on how the product was handled prior to loading and during loading of the truck. The shipper needs to make sure to document all temperature instructions and location of the temperature recording devices. The shipper should also check that the reefer unit is set at the correct temperature and mode (continuous or stop/start).

The responsibilities of the receiver include: pulp the product upon arrival prior to unloading the truck and, if there was an indication of undesirable temperatures, collect temperature recorders and document where the recording devices were found. The receiver must also indicate on the BOL(s) the reasons for receiving the product under protest and request the reefer unit’s download. Finally, if the shipper places one or more temperature recording devices on the load, and no recorders are found upon arrival, the receiver must document the missing recorder(s) on arrival, and must resolve the issue with the carrier.

As a carrier, your responsibilities include ensuring you have and follow all the information, instructions and requirements provided by the shipper/receiver. The driver should be allowed to pulp temperatures before loading the truck. If the driver cannot verify pulp temperatures, the receiver should be contacted for instructions.

The driver must comply with all temperature instructions and document the location of temperature recording devices as well as verify that the load count matches the manifest. If the count cannot be verified, the original BOL should be marked “shippers load and count.” Ensure that the driver sets the reefer unit at the correct temperature and mode according to the BOL. If there are discrepancies between instructions to the carrier and the BOL regarding temperature setting, on an FOB transaction contact the buyer, on a “Delivered” transaction contact the seller.

Do you have a question you would like to see answered in our next Solutions Blog? Email the Help Desk with the subject line Q and A’s: [email protected]

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Annual billing

A friendly reminder that annual invoices will be mailed, emailed and/or faxed to most members on November 15th.

Should there be any changes to your company or responsibly connected parties please call us as soon as possible or request an update to your records in the members-only portal online. The web portal can be accessed at: mywww.fvdrc.com.

Please note some members may have a different invoicing date depending on when they joined DRC. A quick check of your records online will confirm your invoice anniversary date. Please also review that all company info is accurate and up to date.

For more information please call or email the DRC Help Desk at:

DRC Help Desk | 613-234-0982 | [email protected]

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Be a DRC Ambassador

DRC offers benefits to members including education, mediation, arbitration and networking. We help DRC members resolve disputes in a fast and fair manner. While many Canadian  firms will be required to be members under the current and the proposed Safe Food for Canadians Regulations (SFCR), anyone buying or selling produce in, from or into the North American marketplace can be a member with the same rights and responsibilities.

Help us spread the word about the services DRC provides. We are asking our members to be DRC ambassadors and encourage you to ask your trading partners to also become DRC members. Get the most of your membership and be sure you and your trading partners are playing by the same rules. If you are dealing with a non-member, we may be limited in the assistance we can provide in the case of a dispute.

Produce is traded all over the world; do your part to help ensure we are all dealing with the same rule book. Become a DRC Ambassador today. It’s simple, all you have to do is ask your trading partners to join DRC.

Need to find out more about the benefits we offer? Visit our website or call the DRC Help Desk for more information.

DRC Help Desk | 613-234-0982 | [email protected]

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