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Hauling Produce
Produce Q and A

Question: The truck broker that I usually work with tells me he has a PACA license. How does this help me as a produce carrier, or does it help at all?

Answer: It could help you if there is a truck claim on one of your produce loads. I am finding that more and more truck brokers are obtaining PACA licenses. If a broker has a license and a load is rejected, the broker may opt to take title to the merchandise. This means that the product is released to the truck broker who will then find a buyer for the merchandise and hopefully cut the potential losses on the load. By having a PACA license, the truck broker is entitled to a detailed accounting of sales from the buyer. The truck broker could also file an informal or formal PACA complaint if documentation was not provided or the buyer failed to pay for the merchandise. Keep in mind, however, that this scenario only works if the truck broker takes title to the product. A truck broker could not file a PACA complaint on unpaid freight, for instance, even though they have a PACA license.

Question: I hauled for a receiver who had always paid a little slow, but they did pay. I have an invoice for one load due since August, and now they tell me that they are having financial problems and cannot pay at this time. In fact, they are unable to give me a date when they'll be able to cut a check. They have offered to pay $100 every two weeks. Should I take it or do you think that I should try to force the entire amount from them now?

Answer: This is a question asked often at Red Book Credit Services. The answer is, you ultimately have to make this call. Do you think that they can adhere to a payment plan? If you are going to try to "force" them to pay, I assume you mean hiring an attorney. You have to ask yourself if the legal fees will be more than what you are owed. As I said, it will ultimately be your decision. I would advise that if you opt for the payment plan, draw up a contract and have both parties sign it. This way, if you do have to go to court later, you'll have a stronger case.

Question: I dealt with a broker for the first time and hauled loads for him. When it came time to pay, the broker pointed out a portion of the contract, which I had signed, stating I had to pay a "service fee" of $2,500. This fee was deducted from my freight. Is this legal?

Answer: We've had many calls on this subject in the last two months. I would advise you to consult your attorney to determine the legalities of this contract. You did, however, sign it. You may have to chalk this one up to learning a lesson the hard way. I cannot stress strongly enough the importance of reading a contract thoroughly and hammering out the details before you sign. Check with us or the credit service that you are using. In many cases, we know who is operating with these "shady" contracts and should be able to steer you away from these firms before you get stuck with a questionable fee.

Question: We hauled a load of tomatoes that arrived showing problems. The receiver of course blamed us and refused to call a federal inspection. Can we call for an inspection ourselves?

Answer: Yes, you can call for an inspection. In this case, if you don't, I think you are giving the receiver carte blanche to blow these tomatoes out the door at your expense. Any interested party can call for a USDA inspection. Further, for an additional $40 fee, the inspector will take a digital photo of the load, process it, and call you with a case number and a password. You can then go to the Internet to retrieve the photo. Incidentally, without taking a federal inspection, the receiver is either rejecting this load without reasonable cause, or failing to provide you with the documents to support the claim. This is one of those situations that is not covered by PACA, so as usual, the truck is working without a net.