#6 – The Three Ts of Good Arrival
When the defects reported on an inspection certificate exceed the percentage of defects set forth in the good arrival guidelines, it is important to consider the “Three Ts of Good Arrival” before concluding the seller breached the warranty of suitable shipping condition.
The first T is for total: was the total lot inspected? Because good arrival guidelines are based on averages, any missing product is factored in as defect-free product. To account for missing product, simply multiply the
percentage of defects shown on the inspection certificate by the number of cartons inspected, then divide the resulting number by the total cartons sold. If the resulting percentage exceeds the percentages provided for in
the good arrival guidelines, the shipper may have breached the warranty of suitable shipping condition.
The next T is for timeliness. It must be remembered that f.o.b. sellers warrant the product will make good arrival on the day of arrival, not on the day the inspection is taken. If the inspection is taken after the day of arrival, then the question becomes, “Does this inspection show that good arrival percentages were exceeded one, two, or three days earlier when the product arrived?” Inspections taken more than three days after arrival may be deemed ‘too remote’ to prove the condition of produce upon arrival, even if the defects significantly exceed the percentages put forth by the good arrival guidelines.
The third and final T is for transportation conditions. Trucks are required to maintain air temperatures in transit at or near the instructed range. Blue Book Services’ Transportation Guidelines provide guidance for assessing the adequacy of transit temperatures and provide that trucks are generally expected to cover approximately 500 miles per day. A warm or late arriving truck will increase the percentage of defects at destination and must be factored into the “good arrival” determination. For example, if defects exceed good arrival guidelines by 1 percent at destination, but transit temperatures were warm and the truck arrived late, then the percentage of defects would not be sufficient to prove the shipper failed to load the product in suitable shipping condition.
Conclusion
Understanding these fundamental trading principles will serve as a good primer for the New Hire Academy’s session on Trading Customs and Rules. Look for articles on the PACA Trust and Transportation Customs and Rules in coming issues.
Good Arrival Guidelines: Peppers, Sweet
U.S. Grade Standard: 10-5-2
Optimum Transit Temp: 45-55º F
After X Days in Transit, % of Defects Allowed
5 days: 15-8-4
4 days: 14-8-4
3 days: 13-7-3
2 days: 12-6-2
1 day: 10-5-2
