The fresh cold chain never sleeps. At least it’s not supposed to. When it does, the disputes that arise are not always clear cut, and the fallout from a messy dispute can strain valuable business relationships. That’s the bad news.
The good news is that working through disputes in a reasonable, fair-minded, and informed manner builds trust between individuals and companies. If you’re an industry veteran, you probably have a number of individuals and companies on your mental “never again” list—a list more permanent and visceral than your “do not sell” list.
The folks on your “never again” list are probably not there because of a bona fide dispute that couldn’t be resolved despite efforts on both sides. More likely, they made this list by stubbornly viewing a dispute in a one-sided manner with little regard for the rest of the supply chain. Twisting facts, making unreasonable arguments, refusing to acknowledge industry trading and transportation standards, dodging telephone calls and the like, are all examples of conduct most of us are not likely to forget.
On the flip side, you probably also have a mental list of individuals and companies that you’ve come to believe in—not because you always agree with them, or because every deal goes smoothly, but because you can count on them to be reasonable when disputes arise, to acknowledge the perspectives of other interested parties, to deal in good faith, to respect industry standards, and to face up to problem loads with an appreciation for the value of the continuing business relationship and a bottom line commitment to doing what is right.
It is these folks that will get your business first, and it is these folks we all respect on a personal and business level. So how does someone avoid the “do not sell” and “never again” lists, and make the list of trusted individuals and firms?
Financial Wherewithal One critical factor in disputes is having the financial wherewithal to take a loss. Sooner or later, a cooling unit breaks down, product doesn’t hold up en route as expected, or an invoice gets short paid without adequate support—these things are going to happen, and firms on solid financial footing are prepared to learn from mistakes and absorb the occasional losses.
When firms operate with no margin for error, however, these occasional losses risk serious disruption to cashflow, operations, and business relationships. When firms commit to providing supporting documentation that never arrives, make unreasonable arguments, change stories, respond to claims with a great deal of emotion, and generally avoid discussing the substance of the claim, these are often signs that the firm does not have the cashflow needed to resolve a claim. It is easier to do the right thing when the firm has the money to do so.
The fresh cold chain never sleeps. At least it’s not supposed to. When it does, the disputes that arise are not always clear cut, and the fallout from a messy dispute can strain valuable business relationships. That’s the bad news.
The good news is that working through disputes in a reasonable, fair-minded, and informed manner builds trust between individuals and companies. If you’re an industry veteran, you probably have a number of individuals and companies on your mental “never again” list—a list more permanent and visceral than your “do not sell” list.
The folks on your “never again” list are probably not there because of a bona fide dispute that couldn’t be resolved despite efforts on both sides. More likely, they made this list by stubbornly viewing a dispute in a one-sided manner with little regard for the rest of the supply chain. Twisting facts, making unreasonable arguments, refusing to acknowledge industry trading and transportation standards, dodging telephone calls and the like, are all examples of conduct most of us are not likely to forget.
On the flip side, you probably also have a mental list of individuals and companies that you’ve come to believe in—not because you always agree with them, or because every deal goes smoothly, but because you can count on them to be reasonable when disputes arise, to acknowledge the perspectives of other interested parties, to deal in good faith, to respect industry standards, and to face up to problem loads with an appreciation for the value of the continuing business relationship and a bottom line commitment to doing what is right.
It is these folks that will get your business first, and it is these folks we all respect on a personal and business level. So how does someone avoid the “do not sell” and “never again” lists, and make the list of trusted individuals and firms?
Financial Wherewithal One critical factor in disputes is having the financial wherewithal to take a loss. Sooner or later, a cooling unit breaks down, product doesn’t hold up en route as expected, or an invoice gets short paid without adequate support—these things are going to happen, and firms on solid financial footing are prepared to learn from mistakes and absorb the occasional losses.
When firms operate with no margin for error, however, these occasional losses risk serious disruption to cashflow, operations, and business relationships. When firms commit to providing supporting documentation that never arrives, make unreasonable arguments, change stories, respond to claims with a great deal of emotion, and generally avoid discussing the substance of the claim, these are often signs that the firm does not have the cashflow needed to resolve a claim. It is easier to do the right thing when the firm has the money to do so.
But, of course, not everyone responds this way under financial stress. Some individuals and organizations, to their credit, will own up to their responsibilities without misdirection, even if they are not presently able to pay. In Blue Book’s experience, industry creditors are usually willing to work with debtors who are honest when a problem arises and take seriously their obligation to make the cred-itor whole as soon as possible.
Although these debtors may find themselves on the creditor’s “do not sell” list even after the debt is satisfied, they are less likely to find themselves on the creditor’s “never again” list, which in the long run could prove to be important. But if you want to earn the industry’s trust, financial wherewithal is necessary.
Part of the Job When visualizing business success, it is probably natural to think first and foremost about providing a great product or service, then selling the heck out of it. In a perfect world, trouble loads would not interfere. But, then again, if no one ever lost money on a produce deal, there’d be a lot more competition out there—so that world might not be so perfect after all. And while you would be correct to say that handling trouble loads is “part of the job,”maybe it can be put in a more favorable light.
Perhaps committing to resolving trouble claims in a professional manner is the key to unlocking the benefit of all the transactions that do go well. And maybe committing to highly professional claim handling can be used to help distinguish you and your company from competitors who may occasionally avoid resolving trouble loads, and who may generally view claims as a necessary evil, rather than an opportunity to establish trust.
It is one thing to act like ladies and gentlemen when there’s plenty at the table. Most people can pull this off. But when there’s not enough, and especially when someone needs to eat a significant loss, that’s when table manners may start to get rough. But this is also the very moment when you and your company have an opportunity to show your professionalism, your competence, your leadership, and most of all, your trustworthiness.
Trading and Transportation Standards One of the keys to professionally addressing claims is having a decent understanding of industry trading and transportation practices and rules. Without understanding the fundamentals, you risk creating unnecessary friction, appearing amateurish, and unknowingly being taken advantage of.
Do you understand how to read a reefer download, an inspection certificate, the Good Arrival Guidelines published by PACA and DRC? Do you know the difference between an effective and ineffective rejection? Are you familiar with the the differences between price-after-sale and consignment? Do you know what reasonable dispatch is? Do you understand how to calculate and support damages? Do you understand the duty to mitigate losses?
It is, of course, not necessary to know these topics cold. In fact, knowing all the details of all these issues may suggest you’ve been involved in way too many claims. What’s more, especially when first discussing the problem, leaving open the possibility that you don’t know it all, shows an open mindedness that may help set a constructive tone.
Effectively handling claims at times means stepping back and brushing up on a particular topic, while allowing the other parties time to do the same. Blue Book, PACA, and DRC all have staff available to help you work through routine trading and transportation problems.
Additionally, each of these organizations publishes reference and educational material on their websites that can be helpful whether you are new to the industry or a seasoned veteran. Blue Book’s Trading and Transportation Guidelines will be published in hard copy soon for the first time in several years.
Agreeing to Disagree But what if the parties simply cannot agree? Even with good intentions and a high degree of professionalism on both sides, agreement is not always possible even with the help of a mediator from Blue Book, PACA, or DRC.
In these cases, preferably before patience wears thin, it may make sense for the parties to step back and agree to let a judge (usually an administrative judge under PACA) or an arbitrator resolve the matter. Although traditional litigation is inherently contentious—it’s too much of an expense to be otherwise—produce industry firms have the advantage of several low-cost ways to resolve disputes in a binding manner without the strain of a lawsuit.
At Blue Book, we see highly contenti-ous arbitrations where the parties will “never again” do business together. But we also see arbitrations between firms that continue to do business with one another, and are simply looking for a way to put a troubled transaction to bed. The tone of these arbitrations is respectful and professional, and the matter gets resolved efficiently—there are no depositions, juries, or attorneys. The same can be said for arbitrations conducted by DRC and formal complaints before PACA.
So, how do you approach trouble loads? And what does your approach say about you and your company? Your next trouble load is a golden opportunity—of sorts.
