Not Apples to Apples

Carriers and the ‘all-or-nothing’ nature of good arrival; a case study

The following case study is based on a claim filed with Blue Book Services. The facts described below set up an interesting but not uncommon type of dispute between a truck broker and a wholesaler, with a shipment arriving at destination one or two days late with defects marginally in excess of those set forth by the Perishable Agricultural Commodities Act (PACA) and its Good Arrival Guidelines.

The claimant, a truck broker, was hired by the respondent, a wholesaler, to transport apples from Washington state to Denver, Colorado. The shipment involved three (3) pickups, which were expected to be completed on March 13, 2017 but were not completed until mid-morning on March 14. The shipment was then delayed further when the carrier was found to be overweight, necessitating a return to the third pickup location, and delaying departure until approximately 1:00 pm in the afternoon. It does not appear that the delays at shipping point can be attributed to the carrier.

When the carrier arrived at the receiver’s location in Denver during the afternoon of March 16, the wholesaler complained that some of the pallets in the nose of the trailer had shifted and were leaning against the wall. The wholesaler instructed the carrier to have the pallets restacked elsewhere before returning. The restacking took longer than expected and the carrier did not return to the wholesaler’s facility until early afternoon on March 17.

When the carrier returned, the receiver accepted the restacked product, but the next day (March 18) called for a U.S. Department of Agriculture (USDA) inspection which showed the apples were affected with 16 percent average defects, five (5) days after they were loaded.

The wholesaler does not attribute these defects to the carrier, but rather contends, in essence, that the delay caused by the restacking delayed the USDA inspection of the apples and undermined any claim it would have had against the seller for breach of the warranty of suitable shipping condition. Based on this premise, the wholesaler suggested it had the right to claim the carrier for quality and condition problems with these apples in the same way it would have claimed the seller had the product failed to comply with the warranty of suitable shipping condition (i.e., failed to make ‘good arrival’). The truck broker questioned the basis for this claim and asked Blue Book to review it.

At the outset, we note that claims against a free on board (FOB) produce seller and claims against a carrier are two distinct types of claims, which much be proven independently against either the seller or the carrier. It is not correct to assume that because a claim fails against the seller due to abnormal transportation conditions, that the same claim can then be brought against the carrier as if the carrier were a seller who failed to comply with the warranty of suitable shipping condition.

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