Question: What are a truck broker’s financial responsibilities on a produce load, particularly if there is a claim?
Answer: That really depends on the contract that was negotiated between you, the carrier and the truck broker prior to loading.
Let’s start with the broker’s financial responsibility to the carrier with no claim involved. The usual methods of payment from a broker to a carrier are terms, which means the broker will pay the carrier in a predetermined number of days — 21 days, 30 days, etc. The other method of payment is called “collect and remit.” This means the broker will collect from the party paying the freight for the load, deduct their brokerage fees and then remit the payment to the carrier. This type of arrangement is fine, but keep in mind that if it takes 60, 70, 90 days or more for the broker to collect, it obviously takes that long for the carrier to be paid. In the case of a collect-and-remit load, no pay to the truck broker means no pay to the carrier. Therefore, in this scenario, make sure that you don’t rely on the broker to check the credit of the entity paying the freight.
Check the credit of the outfit that is going to pay the freight with whatever source(s) you use, and if you see a possible problem with pay, then voice your concerns before you agree to take the load on a collect and remit basis. The two most commonly used credit-rating services in the produce/produce trucking industry are The Produce Reporter Co. (Blue Book) based in Carol Stream, IL, and Red Book Credit Services (RBCS) in Lenexa, KS.
As far as a truck broker’s obligations on loads with claims, unless the truck broker agrees to cover a claim in the freight contract (which is rare), he or she has no financial obligation to anyone in the event of a claim. A good broker will help the carrier in any way possible with the handling of the claim, including helping to obtain the documentation pertaining to any deductions being made. A bad broker will bail out at the first sign of trouble and leave the carrier twisting in the wind, forced to handle the whole thing. If this happens to you, you’d better know what to do, or you could find yourself in a helluva mess. No two truck claims are ever the same, in my opinion.
Question: We haul a lot of citrus from Florida to California. As part of that process, we must stop in Arizona at the port of entry and allow the Department of Agriculture to destroy two boxes of fruit in search of the infamous — though mystically elusive — fruit fly larva. (I’m not sure how the fruit fly knows which two boxes they are supposed to be in when we haul 990 to 1,076 boxes at a time). Anyway, they cut the fruit in half, place the cut fruit in a plastic garbage bag and then place it back in the box from which it came. When they first started the process a couple of years ago, they only cut one box, and they disposed of the destroyed fruit. Now, they cut two boxes and put the garbage back on our trucks. Again, I ask, what in the world are we supposed to do with their trash, and why is it our responsibility to haul it off? They are paid by the state of California for the process, so let them dispose of it themselves.
Answer: I’ll attempt to answer this one while trying to rationalize a government program, which may not be possible. First of all, I did some research, and, according to USDA, fruit fly infestations can cost the citrus industry $33 million a year. If not managed, losses can run as high as $821 million.
As far as the issue of two boxes vs. one, this eliminates the slim chance of someone arguing that the larva “was only in that one box, and you happened to find it.” It doesn’t mean the whole load was infested. If found in two boxes, chances are much better of assessment. According to the Arizona Department of Agriculture, they are severely underfunded and understaffed in the area of inspections. I would hazard a guess they would tell someone who inquired this is the reason they do not dispose of the fruit — cost. Because it is the government, I’m guessing I won’t get a living, breathing human on the phone to answer my question. Why did the government pay $900 for a toilet seat or some staggering amount as was exposed some years ago? Same machine today, just different people. If the inspectors required the driver to wear a tutu and stand on their head while the fruit was being inspected, a majority would do it because life’s too short.
I’m not saying you have to roll over and die because it’s the government, and I think you make a valid point about the disposal. But it seems to me it is easier in this case to grin and bear it, and dispose of the product yourself.
Hey, here’s an idea: I would say that in the span of a year, significant amounts of perfectly good fruit are destroyed. Wouldn’t it be cool if somebody from the Department of Agriculture would make one phone call to a local food bank, have them send a truck to the port of entry each day or two and take that product to some folks that appreciate it more than you and I. Everybody wins! Wait, what am I saying? That would be too logical. LL
Editor’s note: Randy Gunderman is the president of GAIN LLC. GAIN is now taking applications for GAIN TRAIN, a comprehensive and intense training course for carriers who currently haul produce or those who are considering doing so. The course will be presented at the International Trucking Show in Las Vegas June 26, and repeated on the 27th and 28th. Inquiries should call Randy or Susan Gunderman at GAIN LLC. They can be reached by telephone at (913) 262-1574, or you can e-mail them at firstname.lastname@example.org. You can also visit the ITS Web site, which is www.truckshow.com.