Resolving late claims
Late arrivals of fresh produce disrupt the flow of business and decrease the value of product, turning what was supposed to be a profitable transaction into a carrier claim. With the advent of electronic data loggers putting additional time pressure on the supply chain, we thought it would be a good time to review late claims and the fundamental issues that arise when a shipment arrives late.
Of course, the fact that a carrier arrived later than expected does not necessarily give rise to a claim. Late claims against carriers of fresh produce generally require proof that the carrier failed to use ‘reasonable dispatch’ and proof of resulting damages.
And while this may sound simple enough, there is a fair amount of devil in the details.
At the outset, it is important to recognize that given the highly perishable nature of fresh produce, time is impliedly of the essence.
Consequently, in the absence of a contrary agreement, carriers are expected to use ‘reasonable dispatch’ to deliver fresh produce in a timely manner. Reasonable dispatch is generally defined as the ‘usual and customary’ time it takes to complete similar shipments.
“What is ‘usual and customary’ in transportation can depend upon the shipping characteristics of the commodities being transported,” explains attorney Dan Sullivan of Sullivan Hincks and Conway, based in Oak Brook, IL. “This was recognized by the now defunct Interstate Commerce Commission when it was considering a definition of reasonable dispatch for perishable commodities in the early 1970s.”
As part of that investigation, the Commission defined a “perishable commodity” as follows—[A]ny edible commodity which, during the course of transportation, is subject to rules, regulations, or charges for perishable protective service and requires the transporting carrier expeditiously to transport it and to produce and maintain as needed throughout transportation a controlled atmosphere for protection against heat or cold as one of the essential parts of the service in order to prevent deterioration of the commodity prior to arrival at destination.
“This is critical to understanding reasonable dispatch because it shows that notice of the need for the carrier to use reasonable dispatch is imparted by the product being shipped,” notes Sullivan.