Author: DRC

In this article Jennifer Morris, President of Two Roads Logistics writes about the Electronic Logging Devices requirement that came in effect on December 18, 2017.

What is an ELD?

Electronic Logging Devices (ELDs) synchronize with a vehicle engine to automatically record drive-time, for easier and more accurate Hours of Service recording/reporting. It also helps to streamline sharing and tracking of Hours of Services.

What is the ELD US Mandate?

In 2012, US Congress enacted MAP-21 Bill.  This Bill, which outlines the criteria for highway funding, included a provision requiring FMCSA (Federal Motor Carrier Safety Administration) to develop a rule mandating the use of electronic logging devices (ELDs).  In its simplest form, an ELD is used to electronically record a driver’s Record of Duty Status (RODS), which replaces the paper logbook where some drivers currently report their compliance with Hour of Service requirements. In effect Dec 18, 2017.

What does this look like in Canada?

Transport Canada is committed to balancing the best interests of Canadians and aligning with vehicle regulations in the United States.  By continuing to coordinate the Canadian and US logging device regulations, Canadian companies will be able to use the same logging devices in both countries and this will further support economic growth, trade and shipping between the countries.  Possible implementation has been suggested for late 2019.

Who does/will the rule apply to?

The ELD rule applies to most drivers who are currently required to maintain records of duty (per. part395,49CFR 395.8(a)).  It applies to commercial buses and trucks including Canadian and Mexican drivers in the USA. When Canada implements their mandate, it will be similar to the US standards.

Why is this being done?

The benefits are threefold: (i) ELD creates a safer work environment for drivers; (ii) it provides for more efficient communication between drivers and carrier staff; and, (iii) it facilitates information sharing with the Department of Transportation (US).

Will this affect capacity?

It is likely there will be a learning curve with adapting to the mandate.  This could cause some drivers to move less loads per week/month. This will put stress on capacity.

Will transit times change?

Hours of Service rules have not changed and are not going to change; however, ELDs will track all on-duty statuses.  Including; yard moves, safety checks, traffic issues and wait-times. Transit times will be longer than the currently perceived transit times.

Will rates change?

There is an investment in software and equipment as well as training and additional admin costs.  Also, with drivers closely managing their times at shippers and receivers, wait-time will have costs and consequences.

Author: Jennifer Morris, President, Two Roads Logistics

Stay tuned, in part 2 we will review the Agricultural exemption which addresses the hours of service at shipping point.

Applicants for DRC membership, members, responsibly connected individuals and employees must meet certain conditions in order to become a member and maintain membership in DRC.  When those conditions are not met, applicants and members may be required to post financial security.  Financial security is a sum of money held by DRC (for a defined period of time) as a promise to conduct business in accordance with our rules.  If the member violates a provision of the DRC by-laws and Operating Rules, like failing to pay an arbitration award, DRC may distribute the funds, as provided in the Security Agreement in place between the member and DRC.

DRC sometimes requires financial security for reasons such as: employing an individual who has previously been insolvent; being named in a court order; being expelled from DRC within the last five years; and the list continues.  Additionally, a member who would normally be expelled from DRC membership may avoid expulsion by posting financial security.

There are two types of financial security: (i) applicant / member; and, (ii) employee.  Applicant and member bonds** are required when the applicant or member is responsible for an act that would trigger our bonding policy (i.e. filing a proposal with creditors for cents on the dollar).  In the example, the amount of security required would start at fifty thousand dollars but could increase when considering aggravating and mitigating factors such as, the size of the business, the impact a potential insolvency may have on the industry, the type of operation, prior violations, the reason for seeking financial security, etc.

Members and applicants may also be required to post financial security when they employ an individual who does not meet the membership qualifications as defined in the DRC Operating Rules.  Unlike applicant and member bonds, employee bonds are set at a maximum of twenty-five or fifty thousand dollars, depending on the individual’s violation and their new role at the member company.

If a member has posted financial security, for any reason, and they fail to meet their debts as they come due or suspend the operations of a business with money owing, DRC will use that money to pay other members who submit a proof of claim.  We would caution, please do not extend additional credit based on the assumption a company has a bond posted, and therefore you will get paid either way.  Particularly in the case of an employee bond with a set maximum, it is not likely the financial security will cover all claims if the employer finds themselves in serious financial trouble.

For the list of members with financial security posted, log in to the members only section of our website, click on the “publications” tab and open “DRC Members Who Have Financial Security Posted.”

If you have any questions about our bonding policy please contact our office.

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

** for the purposes of this article, “bond” is used to refer to “financial security”

United Fresh Produce Association’s United FreshMKT

DRC will be exhibiting at the United Fresh Produce Association’s United FreshMKT this June 25-27, in Chicago, IL. Come say hi to Fred Webber, Luc Mougeot and Andrea Bernier at booth #1152.  We’ll be on hand to answer any questions you may have regarding the upcoming regulatory changes coming to Canada and the impacts on Canadians and non-Canadians alike.  Under the new regulations, more Canadian companies than ever will be required to have a DRC membership and we strongly encourage all members to verify that they are buying and selling only with fellow members.

Fred Webber, President & CEO, will be addressing several of the volunteer councils speaking to multiple committees updating them on the regulatory changes occurring in Canada. If you would like to learn more about how those changes may impact you, please contact our office.

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

CPMA Convention and Trade Show – SFCR & Grade Standards

April 24-26, 2018 DRC attended the CPMA Convention and Trade Show in Vancouver, BC.  Thank you to all of our members who stopped by our booth.  It was a pleasure seeing familiar faces and meeting new friends.

We were pleased with the informed discussions and engagement that took place in our booth around the upcoming Safe Food for Canadians Regulations.  Members and non-members a like dropped by to learn more about the trade and commerce aspects of the proposed Regulations and how the changes may affect them and their trading partners.

In addition to the SFCR discussions, there was keen interest in DRC’s latest project: harmonizing the Canadian and US grade standards.  As part of its long term strategic plan, the DRC has always envisioned a time when the Canadian grade standards for fresh fruit and vegetables would be housed within and maintained by the DRC. The passage of the new Safe Food Canadians Act and their soon to be implemented proposed Safe Food for Canadians Regulations present a new opportunity to incorporate the 2009 changes into the standards that are now part of a referenced document entitled Canadian Grade Compendium – Volume 2 Fresh Fruits and Vegetables.

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

Let’s assume that you received product in a deteriorated condition, you requested a federal inspection and the results of the inspection report support a breach of contract. You sell what you can after the product continues to deteriorate quickly but unfortunately there are some cartons left that cannot longer be sold.  If you still have more than 5% of the product left, in accordance with section 9 of the DRC Trading Standards before dumping or donating, make sure you take the following steps:

1. Communicate with your trading partner. Find out if he requires evidence that the product left has no commercial value or if they just need a dumping certificate. If you had a phone conversation with your trading partner, make sure you send a quick email confirming the details of the conversation.
2. If you are not able to reach your trading partner it is your responsibility to show that the product that you will be dumping or donating has no commercial value. Your next step would be to call for a follow-up government inspection which would show the advanced deterioration of the product which would make it no longer marketable. The results of the follow-up government inspection should show that the product no longer has any commercial value.
3. Request a dump/disposal/donation inspection. The CFIA and the USDA inspection services can provide a Notice or Inspection Certificate showing the amount of product dumped or donated in their presence. This document does not confirm the product has no commercial value.

Following the above steps will help avoid a dispute over dumping product received in deteriorated condition and in the event that you are involved in a dispute, these steps will provide the necessary supporting documents for your actions.

Please remember we are here to support and assist our members. Contact the DRC Help Desk with any questions or concerns at:

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

This is the final article in our three-part series “How to Read a CFIA Inspection Certificate”.

This time we will provide a description of the remarks and the certification section.

Generally, the first thing you will notice on the remarks section will be if there were any digital pictures taken or attached to the inspection report, followed by a description of the containers and packaging. It will also indicate what Canadian or US Grade Standard has been used as a reference standard to inspect the load. Different from a USDA inspection report, CFIA inspectors will not indicate if the product fails to meet a grade standard. A CFIA inspector will proceed to detain a load if it fails to meet the minimum Canadian Grade Standard on account of permanent/quality defects.

Next, the inspector will include the applicant’s purchase order (PO) or the invoice number, the lot numbers if available, and any other remarks requested by the applicant. Finally, if a temperature inspection is requested and performed at the same time as a condition inspection, the inspector will use the remarks section to provide details of the load’s pulp temperatures. As mentioned in our first article of this series, transportation information, if available, may be found here.

The last part of the certificate is the “Certification” where you will find if the inspection has been requested for temperature, weight, size, condition, condition and grade, count, or any other type of request from the applicant.

It is very important the applicant requests the proper inspection. Make sure you fill out the request for an inspection form in detail, specifying what you would like the inspector to address in the inspection report.  Communication between the seller and buyer prior to requesting the inspection is recommended.

We hope this series has been informative and useful for you and your team.  If you have any questions, please do not hesitate to contact our DRC Help Desk by email or by phone:

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

Members have nine months from when the dispute arose to file a notice of dispute with us.  Unfortunately, it is not uncommon to receive calls about claims that are beyond the nine-month deadline or are quickly approaching it. Having dealt with thousands of calls over the years, we get it, sometimes things can get away from us, especially if we get busy and most other business is going well.

However, the nine-month limitation of claims must be taken seriously as it prevents you to use any other recourse outside of DRC to resolve your dispute.  DRC Mediation and Arbitration Rules, Article 4,  states, “…the Claim is notified to the Corporation by way of a Notice of Dispute within nine (9) months of when the Claim arose or within nine (9) months of when the claimant ought reasonably to have known of its existence.”

The wording “ought reasonably to have known” is intended to address indirect situations where notice of a problem was not explicitly communicated by one party to another.  An example would be when a cheque is returned for not sufficient funds.

Keep in mind that according to our rules, “Failure to file the claim with the Corporation (DRC) within this time shall be deemed and abandonment of the Claim and prevent recovery against another member.” In other words, you may have lost an opportunity to potentially recover some funds.

Our advice is to flag these accounts at the 6 month mark (or sooner) to prevent you from accidentally getting close to the 9 month deadline.  Give our Help Desk a call, and check the DRC website to verify your buyers and suppliers are active members. To help make it easier for our members to monitor the DRC standing of their trading partners, in the coming months DRC will be publishing changes to membership statuses.

We have written many articles about inspection services and DRC’s Good Inspection Guidelines.  We believe we have been able to relay why a government inspection, such as a CFIA inspection or a USDA inspection, has more weight than a private survey. Nevertheless, we understand that sometimes a private survey may be necessary. Here are some instances where a private survey would help a buyer/receiver claim damages:

• Where government inspection services are not available. To our knowledge, Canada and the USA are the only countries that provide this service.
• Where government inspection services are available but cannot be performed in a timely manner. When a request for a government inspection is submitted you can ask for an estimated time of performance of the inspection. If inspectors are not available within 24 hours, you should talk to your supplier/seller about it and discuss the possibility of requesting a private survey. Do not cancel the request for a government inspection unless you have secured a written agreement with your vendor for a private survey.
• When there is a written agreement between buyer and seller to have a private survey performed. We understand the fast pace of our industry and that many deals are done over the phone. However, a verbal agreement is only valid when both parties still have the same recollection of what was discussed and agreed upon, therefore, it is crucial to confirm it in writing.

We would also like to remind you that government inspections are considered “prima facie” evidence. In other words, a government inspection is sufficient to prove damages or the lack thereof. A private survey can always be challenged when the survey report fails to address all of the twelve elements stated in DRC’s Good Inspection Guidelines.

For more information see DRC’s Inspection Guidelines. https://fvdrc.com/by-laws-and-operating-rules/inspection-guidelines/. You can also call our office and request this document be emailed to you.

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

DRC will be participating in this year’s CPMA Convention & Trade Show to be held in Vancouver, BC April 24-26, 2018. Come say hi to Fred Webber, Luc Mougeot, Andrea Bernier, Anne Fowlie and Paola Gonzalez at booth #1259, or schedule a meeting with us in advance. We’ll be on hand to answer any questions you may have regarding the upcoming regulatory changes impacting Canadians.

The proposed Safe Food for Canadians Regulations include key trade and commerce points for buyers and sellers of fresh fruits and vegetables which are expected to come into force in 2018. Membership in the DRC will become a Canadian Food Inspection Agency (CFIA) regulatory requirement for Canadians to buy, sell, import or export fresh fruits or vegetables, unless exempt.

If you are not able to stop by booth 1259 join us in the learning lounges on the Trade Show Floor on Thursday April 26 from 12:30-1:00 pm.

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

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

For trading assistance questions during CPMA, please wake up Jaime Bustamante at the office. HA HA HA

This is the second of a three-part series on how to properly read a CFIA inspection certificate. The first article described the importance of reviewing all the information contained in the inspection certificate and we focused on the requested and performed dates, information about the applicant, the shipper, and the consignee as well as the location where the inspection is taking place and the product description.

In this article we will review temperatures and defect sections.

The inspector will record pulp temperatures, warehouse, cooler, and vehicle and outside temperatures. In the defects’ section the inspector will list all defects based on the samples taken from the load and in accordance with the Canadian Grade Standard or the US Grade standard for that commodity as applicable.

Defects found will be described in general terms to provide a mental picture of the damaged product. Inspectors will take pictures to identify the type of defect. The pictures taken by the inspectors are not intended to demonstrate the amount of product damaged by that particular defect.

One question DRC’s Trading Assistance Staff is always asked is what does (P), (C), (C/K) or (P/K) mean? “P” stands for permanent defects, also known as quality or grade defects, which are defects that do not change, such as scarring. “C” stands for condition defects which are defects that change over time, like bruises. “C/K” and “P/K” are included when the product is cut to uncover a condition or permanent defect. When possible, the inspector will take photographs of the product.

The columns next to the named defect indicate the average amount of the defects, the range (lowest percentage of defects and highest percentage of defects found on the sampling), and the defect description.  Different from a USDA Inspection report, the CFIA inspection does not include a checksum line at the end of the average percentage of defects. Therefore, to determine if the total average percentage of defects fails or meets DRC Good Arrival Guidelines, Grade, or contract terms, you must add the average percentage of defects per named defect.

On a CFIA inspection, the defect description, while not always filled out by the inspector, could help determine if the damage to the product is considered serious damage as it normally describes in general terms the percentage of the surface damaged by that defect. It is normally the responsibility of the applicant to request the inspector describes the percentage of the surface affected. Click here to see DRC’s Good Arrival Guidelines.

Stay tuned for part 3, where we will review remarks.

Please remember we are here to support and assist our members. Contact the DRC Help Desk with any questions or concerns at:

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

Fun fact: Variant just means range in French 

Over the last few months we have received a number of questions from new members relating to the importation of new produce types not normally seen in Canada and what to do about it. In one situation the product was refused entry by CFIA and the importer was left trying to find another destination for the product. The first thing we suggest is doing some basic research: finding the latin name for the plant, the genus and species can be extremely helpful; has your supplier exported the product before, if so, what HS code have they applied to the product; does the product have multiple common names, etc.

With this information, you should now be able to use the CFIA’s Automated Import Reference System (AIRS) to find out if it is allowed into Canada from your source country. If you see “Approved” that is great news and you can import the product subject to potential requirements; however, if you see “refuse entry” this means that your product will not be allowed entry into Canada. Regardless, of the AIRS status, take time to read through the conditions, sometimes you may require an import permit, a phytosanitary inspection from the exporting country, or maybe even a Plant Health Risk Assessment.

If you cannot find the product in AIRS, give DRC a call, contact CFIA or contact a broker.