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Produce Pointers

Temperatures, recorders, and third-party inspections

The Problem: Missing portable temperature recorder and disputed private third-party inspection.

The Key Point: A buyer’s failure to produce a temperature report from a portable recorder creates a “negative inference” favoring the seller.

The Solution: Consider all available information including pulp temperatures, reefer downloads, and the percentage of defects shown on a properly authorized inspection certificate.

We purchased a truckload of asparagus out of McAllen, Texas on an f.o.b. basis, to be delivered to our customer in Montreal. Upon arrival, the receiver complained of condition problems with the asparagus. I asked the shipper if he preferred a Canadian inspection, which wouldn’t occur till the next day, or an inspection from a private third-party inspection company, which could be done right away. He chose the latter. Three weeks later, the shipper asked for the temperature tape, but the receiver (our customer) couldn’t find it. I just received an email from the shipper stating that since we couldn’t recover the tape, we were liable to pay for the load in full. The shipper is also complaining that a government inspection should have been used. Your comments please!

A number of issues are raised by your question. At the outset, we’d point out that when a temperature recorder is placed on board (and listed on the bill of lading) and the receiver signs the delivery receipt without noting that the recorder is missing, per industry precedent, this creates a “negative inference” against the buyer.

The fact that the shipper did not request the temperature tape until three weeks after the shipment arrived does not excuse the receiver’s failure (and by extension, your failure) to produce it. Fundamentally, buyers should know that when they accept distressed product, they will need to document their basis for any deduction taken from the seller’s invoice. Both PACA regulations and DRC guidelines require such documentation be preserved for a period of two years.

That said, however, given the good pulp temperatures and the very high percentage of defects reported on the private inspection certificate, this may be an instance where the receiver can establish that the product failed to make “good arrival” in breach of the warranty of suitable shipping condition despite the absence of a report from the portable recorder. The missing report is not dispositive, but rather is viewed as “a factor to be considered” when assessing transportation conditions in connection with the shipper’s warranty of suitable shipping condition (Louis Caric & Sons v. Ben Gatz Company, 38 Agric. Dec. 1486.)

The receiver’s case (and yours in relation to the shipper) would be strengthened with (1) a reefer download showing good return air temperatures; and (2) proof that the shipper agreed to the private inspection. Without this additional support, in our view, this becomes a close case that could go either way.