In essence, the two questions we will always ask as a starting point when assessing a temperature claim are: (1) were air temperatures outside the prescribed range? and (2) did the variance last twelve hours? It’s important to note, however, that we do not simply answer these questions and then mechanically reach a conclusion.
If, for instance, the commodity is strawberries and air temperatures within the trailer are ten degrees too warm for ten hours, we would consider this a breach even though the temperature variance lasted less than twelve hours. On the other hand, if the commodity in question is potatoes, that would be different—we would likely consider this variance to be just a slight deviation provided temperatures were otherwise normal during the trip. So, the point is, in close cases, the perishability of the commodity is factored into our assessment of whether or not the carrier used reasonable care to maintain temperatures in transit.
Similarly, when assessing claims against shippers for breach of the warranty of suitable shipping condition, PACA has more strictly defined “normal transportation” for highly perishable commodities such as strawberries.
Of course, interpreting portable and reefer-based recorders and determining what air temperatures in the trailer were, especially when the available information appears contradictory, can be a challenge in and of itself. This topic is discussed in our New Hire Academy video session, and in a January 2012 Blueprints article titled “Assessing Transit Temperatures,” which is also available at www.producebluebook.com.
Conclusion
Understanding these key transportation principles will serve as a good primer for the New Hire Academy video session on this topic, which is free to members. For new hires without sign-in credentials, a temporary log-in is available.
Blue Book Services recently launched the “New Hire Academy,” an online training program designed to help new hires learn the fundamentals of the produce industry and avoid costly setbacks. The program consists of five sessions covering:
(1) trading customs and rules, (2) the Perishable Agricultural Commodities Act (PACA) trust, (3) sales and account management, (4) Blue Book ratings, and (5) transportation customs and rules.
In this article we recap some of the key points related to the transportation of fresh produce by motor carriage from the “Transportation Customs and Rules” session. Similar articles recapping both the “Trading Customs and Rules” and “PACA Trust” sessions appeared in earlier issues of Blueprints. Each video session in the New Hire Academy series is available for online viewing at www.producebluebook.com.
I. Fresh Produce is Exempt from Federal Economic Regulation
The motor carriage of fresh produce is generally exempt from U.S. federal economic regulation because 49 USC § 13506(6)(B) provides that “agricultural or horticultural commodities (other than manufactured products thereof)” are not subject to the Interstate Commerce Act, which includes the Carmack Amendment. So when you hear about the Carmack Amendment, or operating authority, or the “strict liability” of common carriers (where carriers must prove both freedom from negligence and one of the five common law defenses to liability, e.g., ‘inherent vice of the cargo’) it is important to step back and remember that these concepts are not usually applicable to the transportation of exempt commodities, such as fresh fruits and vegetables, unless the parties have specifically agreed to include them in the transportation contract—which, in the Blue Book’s experience, is not typical in the produce industry.
Of course, produce shipments are subject to federal safety regulations, as opposed to federal economic regulations. Safety regulations such as the CSA (Compliance, Safety, Accountability) and hours of service regulations are fully applicable, and carriers and brokers alike are required to register with the Federal Motor Carrier Safety Administration.
II. Liability Standards
If the Carmack Amendment and its “strict liability” standard does not set the liability standard for carriers, what does? If you’re thinking the Uniform Commercial Code (UCC), you are correct.
Section 7-309(a) of the UCC provides that “A carrier…shall exercise the degree of care in relation to the goods which a reasonably careful person would exercise under similar circumstances. This subsection does not affect any statute…or rule of law that imposes liability upon a common carrier for damages not caused by negligence.”
In other words, carriers that are not subject to federal economic regulation must be shown to have failed to use due care to establish a breach of the contract of carriage in support of a claim. This standard of care is similar to what is often referred to as a “warehouseman’s standard of liability” and requires the claimant to show a breach of duty and resulting financial damages.
III. Suitable Shipping Condition
The warranty of suitable shipping condition is a promise, made by produce sellers to produce buyers, that produce shipped on an f.o.b. (free-on-board) basis will hold up under normal transportation conditions and arrive at contract destination without abnormal deterioration as defined by the applicable (PACA or DRC) good arrival guidelines for the commodity in question.
The warranty of suitable shipping condition is not a warranty made by carriers. But carriers do promise to use reasonable care to protect the product in their possession (see relevant text of UCC § 7-309(a) above) by, among other things, properly maintaining transit temperatures, delivering in a timely manner (using “reasonable dispatch”), and delivering without shortages or shifting. Blue Book Services considers the reasonable care required by the UCC and the “normal transportation” referred to in PACA regulations to be two sides of the same coin.
Generally speaking, if a claim against a shipper fails because transportation conditions were abnormal, the same facts are likely to prove that the carrier failed to use the required level of care in breach of the contract of carriage.
IV. Air Temperatures in Transit
Carriers are responsible for maintaining air temperatures within the trailer. It is no excuse to say “the product was warm when it was loaded, therefore, air temperature in the trailer ran high.” If the carrier cannot promise that the instructed air temperatures will be maintained, then, at a minimum, the carrier needs to notify the interested parties of the problem and perhaps even obtain a written release from strict temperature compliance before taking the load. If the driver remains silent, signs the bill of lading, and drives away with the product, the expectation is that the reefer unit will cool the air in the trailer to the desired range.
Note that carriers do not promise to bring produce pulp temperatures into temperature compliance; carriers only promise that their reefer unit will properly maintain the air temperatures within the trailer.
V. How warm is too warm? How cold is too cold?
How warm is too warm? How cold is too cold? There is no universal answer to these questions. Generally speaking, all available temperature information must be considered on a case-by-case basis.
But because Blue Book reviews hundreds of claims each year, we need to have a framework to help guide our assessment of temperature disputes. To help assess “how warm is too warm or how cold is too cold?” we use the following ‘rule of thumb,’ published in our Transportation Guidelines—
Reefer systems are expected to provide steady temperatures in transit and should be set to run continuously, and not on a start-stop basis unless all parties specifically agree. Slight deviations in transit temperature based on, among other things, the location and accuracy of the temperature recorder, are inevitable and permissible. What constitutes a “slight deviation” will vary, but as a rule of thumb the temperature within the trailer should not be warmer than four (4) or five (5) degrees Fahrenheit over the agreed-upon transit temperature or cooler than two (2) or three (3) degrees Fahrenheit below the agreed-upon transit temperature. If a temperature range is specified, any deviation will be assessed from the midpoint of the specified range. A temperature variance lasting less than twelve hours may also be categorized as a slight deviation, depending on the extent of the variance, the relative perishability of the commodity, and other circumstances.
In essence, the two questions we will always ask as a starting point when assessing a temperature claim are: (1) were air temperatures outside the prescribed range? and (2) did the variance last twelve hours? It’s important to note, however, that we do not simply answer these questions and then mechanically reach a conclusion.
If, for instance, the commodity is strawberries and air temperatures within the trailer are ten degrees too warm for ten hours, we would consider this a breach even though the temperature variance lasted less than twelve hours. On the other hand, if the commodity in question is potatoes, that would be different—we would likely consider this variance to be just a slight deviation provided temperatures were otherwise normal during the trip. So, the point is, in close cases, the perishability of the commodity is factored into our assessment of whether or not the carrier used reasonable care to maintain temperatures in transit.
Similarly, when assessing claims against shippers for breach of the warranty of suitable shipping condition, PACA has more strictly defined “normal transportation” for highly perishable commodities such as strawberries.
Of course, interpreting portable and reefer-based recorders and determining what air temperatures in the trailer were, especially when the available information appears contradictory, can be a challenge in and of itself. This topic is discussed in our New Hire Academy video session, and in a January 2012 Blueprints article titled “Assessing Transit Temperatures,” which is also available at www.producebluebook.com.
Conclusion
Understanding these key transportation principles will serve as a good primer for the New Hire Academy video session on this topic, which is free to members. For new hires without sign-in credentials, a temporary log-in is available.
Doug Nelson is vice president of the Special Services department at Blue Book Services. Nelson previously worked as an investigator for the U.S. Department of Agriculture and as an attorney specializing in commercial litigation.
