5. The total percentage for average defects, as opposed to serious and very serious damage, is all that matters when assessing good arrival. False. Product may also fail to make good arrival for excess serious or very serious damage (or “injury” for product sold with a fancy grade). Accordingly, a shipment with just 4 percent total defects may fail to make good arrival if those defects are classified as very serious damage and exceed the relevant standard for the commodity in question.
6. If a shipment is by rail, and normal transportation is six to seven days, the five-day good arrival standard applies. True. Per industry precedent, the five-day guideline applies by default even if normal transportation times exceed five days such as a coast-to-coast trip by rail or an ocean voyage.
7. If less than all the product is inspected, the missing product needs to be factored in as defect-free product. True. Per PACA precedent, if a percentage of the product is missing, and therefore not available for inspection, then the percentage of defects reported on the inspection certificate needs to be reduced by the percentage of missing product to arrive at the relevant percentages.
8. When a shipment is sold with a grade it is possible for the product to make good arrival, but fail to make grade. True. Technically speaking, apples (US #1) that arrive at contract destination with 11 percent scarring (a quality defect) but no other defects make good arrival, but fail to make grade in breach of the sales agreement.
9. The Good Arrival Guidelines are mandatory and cannot be modified by agreement between the parties. False. Good Arrival Guidelines apply to f.o.b. sales by default, but contracting parties are free to agree to different standards applicable to their transactions.
10. Good arrival guidelines do not apply to shipments into Canada. False. The Fruit and Vegetable Dispute Resolution Corporation (DRC) publishes guidelines for shipments into Canada at www.fvdrc.com. For many commodities, PACA Good Arrival Guidelines have been adopted, but for others a Canada-specific guideline applies. To eliminate the potential for confusion, we recommend specifically stating which guideline will apply when product is shipped from the United States with a contract destination in Canada.
11. If no contract destination is specified, then the warranty of suitable shipping condition does not apply. True. The PACA regulation defining the warranty of suitable shipping condition (7 CFR 46.43(j)) provides, “The seller has no responsibility for any deterioration in transit if there is no contract destination agreed upon between the parties.”
12. If California strawberries are sold with a contract destination of Chicago, but the load is diverted to New York, then the warranty of suitable shipping condition does not apply. False. The warranty applies, but to establish a breach the buyer will need to show the condition of the product in New York is so advanced that the product would not have made good arrival in Chicago. It is important to remember that buyers bear the burden of proof after accepting a shipment (by diversion, unloading, or otherwise).