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Mitigate losses during a wrongful rejection

Wrongful rejection to the carrier.
Dock to Dock

The Problem: Wrongful rejection to the carrier.

The Key Point: Actively and responsibly work with all parties to place the product and mitigate losses.

The Solution: Gather information, communicate in writing, and act in good faith.

Question: We are a carrier based in the Midwest. This morning, we arrived at our customer’s facility in Chicago with a load of asparagus out of McAllen. After performing an in-house inspection which showed condition defects, the receiver rejected the shipment to the truck, claiming we failed to properly maintain temperatures in transit despite a portable temperature recorder and reefer download showing air temperatures in transit were properly maintained—at least in our view. How do you suggest we proceed?

Answer: While the specific circumstances involved for every transaction vary (e.g., relations between the parties, condition of the product, market conditions, commodity involved, etc.), you may find the following checklist helpful in situations where produce is rejected to you, as a carrier, and you believe the rejection is wrongful:

(1) Promptly call for a government inspection certificate, gather all available temperature records, and any other relevant information. Keep records of all communication including email, text, and fax transmittal pages, and confirm verbal communications in writing.

(2) Notify all interested parties that allegations of a carrier problem are disputed. Explain the reason why the allegations are disputed, and remind (as appropriate) the party that hired the carrier of its obligation to take reasonable steps to help mitigate losses regardless of fault.

(3) Ask the receiver to reconsider and accept the produce “under protest,” claiming damages against the carrier and/or the seller as appropriate based on the facts that develop.

(4) If the impasse persists, explain, in writing, that if the receiver will not take the product, and if no one else will take responsibility, then the product will be placed by you, as the carrier, in order to mitigate losses—while making it clear the claim is disputed and that full payment of the original freight bill plus any additional expenses incurred (e.g., detention fees, redelivery expenses, inspection fees, etc.) is expected.

(5) Ask for a response within a reasonable period (e.g., three hours), during which time you may begin attempting to find a buyer or commission merchant (often a wholesaler willing to handle the product on consignment) to sell the produce. If the product has not been government inspected prior to placement with the buyer or commission merchant, a government inspection certificate should be obtained at its facility prior to being sold.

(6) Actively monitor the disposition of the produce; if the produce is handled on consignment or sold without a fixed price, insist upon a detailed account of sales to support returns.

(7) Keep communications open: work diligently and in good faith with all parties to resolve any claims and facilitate future business.

Your questions? Yes, send them in. Legal answers? No, industry knowledgeable answers. If you have questions or would like further information, email


Doug Nelson is vice president of the Special Services department at Blue Book Services. Nelson previously worked as an investigator for the U.S. Department of Agriculture and as an attorney specializing in commercial litigation.