Breach of “good delivery” claimed against a carrier.
The Key Point
The warranty of suitable shipping condition applies between buyers and sellers.
Recognizing that carriers are responsible for proper transportation, not suitable shipping condition.
Q. I work for a large truck broker that hauls a lot of produce loads. I received a trouble notice from a customer that our truck would be claimed for product that failed to make good delivery. It is my understanding that “good delivery” is a warranty produce sellers give to their buyers. I do not believe good delivery applies to carriers. Am I understanding this wrong, or can I possibly face good delivery claims?
A. The warranty you’re referring to is technically called the “warranty of suitable shipping condition,” and you’re certainly correct that this is not a warranty made by carriers.
The warranty of suitable shipping condition was created under the USDA Perishable Agricultural Commodities Act (PACA) and applies automatically between produce vendors when the terms of sale are free on board (FOB).
This warranty is the seller’s promise that the produce it loads on the truck or other conveyance will arrive at contract destination without abnormal deterioration provided transportation conditions are normal.
Technically speaking, abnormal transportation conditions do not “void” the warranty of suitable shipping condition, but abnormal transportation may make it difficult or impossible to prove (by a preponderance of the evidence) that the seller did not load the product in suitable shipping condition.
Carriers are responsible for properly transporting produce, not for ensuring that produce will make good delivery.
As you know, produce that’s not loaded in suitable shipping condition may have excessive condition defects at destination despite normal transportation conditions.
On the other hand, produce that arrives with only marginal condition defects may have been damaged in transit if, for example, the load was transported too warm, causing high pulp temperatures, or too cold, causing chilling damage or freezing injury.
The question of whether a load of produce made good delivery at destination may still have relevance within the context of a carrier claim where financial damages are concerned.
For example, when a load that is subject to a carrier claim makes good delivery (supported by a timely USDA inspection), a carrier may point to this as evidence that the load, as delivered, retained a high percentage of its market value.
This is a Trading Assistance column that appeared in the November/December 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.