Question: I have been hauling produce for a broker who tells me he has a PACA license. My broker says that because of this, I am guaranteed payment on any produce load. If this is the case, why don’t all brokers get a PACA license?
Answer: It isn’t the case. I don’t know if your broker is just misinformed or if he is intentionally misleading you to make sure he has use of your truck. The fact of the matter is many brokers do have PACA licenses, but not because it guarantees payment. Freight charges do not fall under PACA jurisdiction and, as such, have nothing to do with having a PACA license. The fact is that brokers buy PACA licenses so that they can be entitled to proper documentation when there is a truck claim and only when there is a claim. Whether a broker does or doesn’t have a PACA license, you still need to check them out first.
Question: What do I need to know to haul produce?
Answer: A psychiatrist (just kidding). This question was asked many times at the Mid-America Trucking Show. Produce is obviously highly perishable. Some items, like asparagus, are highly volatile. Some items, like bananas and cantaloupes, produce ethylene gases that are harmful to other commodities like lettuce, so you can’t haul those items on the same truck. USDA publishes a pamphlet called “Protecting Perishables During Transport by Truck.” This will advise you of certain temperatures to maintain, load compatibility, loading methods, top icing certain commodities, etc. I refer to this publication regularly and would recommend it. I have stated many times that when you are hauling produce and have a question, ask your broker or the shipper before you load. With produce, the only stupid question is the one you didn’t ask.
Question: Is it safer to deal with a broker who has a bond than one who doesn’t?
Answer: I would have to answer your question “yes,” but not much safer. Quite a few brokers have a $10,000 bond. I would ask you how many people out of business owe only $10,000? In other words, the bond usually covers a pittance of what is actually owed in the event of a business failure. You would need to be one of the first in line to file on a $10,000 or $20,000 bond. After all, we are talking about amounts that would only cover 10 or 15 loads. The best thing you can do is look beyond whether or not your broker is bonded and check to see if they are paying their carriers. Bonds are the last line of defense – credit is the first.
Question: Do I need authority to haul produce?
Answer: Only if you are hauling bananas. Produce, with the exception of bananas, is exempt from federal regulations. Bananas are classified as a regulated commodity by the DOT for reasons unbeknownst to me and, as such, require authority.
Question: How long does a produce receiver have to gather their documents supporting a truck claim and settle/pay it?
Answer: The industry standard is 30 days. A receiver has, for instance, eight hours after the truck arrives to call for a federal inspection. Other documents like accounting of sales should come later. When I say the industry standard is 30 days, I have seen some of these things drag on for months and even years. Why? Because there is not a governing body other than the courts to oversee produce trucking. Some receivers make you “hurry up and wait.”