Perishable Cargo Claims: Short & Sweet!

Perishable cargo claims have a well-earned bad reputation. They create confusion, slow things down, increase expenses, and bring out the worst in some people.

But as with most challenges, there’s a silver lining: companies that do a good job resolving claims build the trust needed to support the long-term relationships with customers and carriers that quietly underpin growth.

How do you and your company handle claims? Is it a competitive advantage or a weakness? In this article we discuss FAQs related to freight broker responsibility for cargo claims, “good arrival,” and interpretation of portable and reefer-based temperature logs.   

FAQ #1 – Are freight brokers expected to stand behind cargo claims?

Generally, yes. Fresh produce is predominately hauled by small fleets and owner-operators that produce shippers don’t know and don’t vet for performance or financial wherewithal.

Blue Book member shippers rely on freight brokers to vet carriers, arrange and monitor shipments, communicate essential requirements, and ultimately to take responsibility for properly supported cargo claims regardless of whether the broker is able to recover from the underlying carrier or its insurer.

Of course, freight brokers may limit their services however they like. For example, a broker may want to only take responsibility for bringing the shipper and underlying carrier together without responsibility for honoring cargo claims not caused by broker negligence.  

In this case, however, to avoid an otherwise highly predictable misunderstanding, we recommend brokers explicitly inform their customers of this limitation in writing prior to booking the load (see Section (3) of our Transportation Guidelines). 

The principle is straightforward: if a freight broker is offering a service that’s more limited than its established competition (i.e., other freight brokers in the industry) then it needs to disclose the limits of its services up front, as opposed to waiting until after a claim arises to clarify the limits of its service.  

FAQ #2 – Does a clean bill of lading signed by the driver establish that produce was loaded in compliance with the warranty of suitable shipping condition?

No. A clean bill of lading signed by the carrier creates the presumption that the cargo was properly secured and loaded in good order at origin without shortages or readily apparent problems, such as crushed boxes or leaking cartons. But it does not establish the product complied with the warranty of suitable shipping condition.

Under regulations issued per the Perishable Agricultural Commodities Act (PACA) sellers may warrant their product, if transported under normal transportation conditions, will arrive at destination without abnormal deterioration—that is, it will make “good arrival” at destination. This is a warranty made by sellers, not carriers.

If the carrier provides normal transportation service (e.g., maintains proper air temperature throughout the trailer, arrives on time, delivers the cargo intact), it has done its job. Attempts by shippers to turn a clean bill of lading at origin into proof their product complied with this warranty and therefore blame the carrier for abnormal deterioration at destination are misguided.

FAQ #3 – What if the temperature readings from the portable recorder and reefer download seem to disagree?

All available temperature records must be carefully reviewed while keeping in mind that portable recorders and reefer units measure temperatures from very different locations.

Portable recorders are commonly attached to pallets in the rear of the trailer nearly 53 feet from the reefer unit where the reefer sensors reside. It’s not uncommon for air temperatures to run warmer in the rear of the trailer. 

What’s more, properly functioning reefer units (especially when paired with well-insulated trailers) are typically capable of adjusting to warm readings during the trip by blowing cooler air at higher velocities to tightly control the readings you see on the reefer download.

There’s no similar feedback loop where portable recorders are concerned.

Consequently, what may be considered a slight variance of three or four degrees when reviewing readings from a portable recorder may be considered a red flag when reviewing a reefer download (see Section (6) of our Transportation Guidelines for details on the different benchmarks Blue Book applies to readings from portable recorders and reefer downloads).  

Applying the appropriate measuring stick based on the source of the temperature readings will typically help reconcile readings that may otherwise appear to conflict.   

Questions? Comments? Your feedback is always welcome, please send to claims@bluebookservices.com.