Q&A: Chilly Outlook in Reefer Dispute

Q: We’re a motor carrier, and have claims on two loads of refrigerated foodstuffs on which there’s a dispute.

The shipper instructed that the loads needed to be 38 degrees Fahrenheit. When the first one showed up, our driver backed the truck up to the dock but wasn’t allowed on the dock. The consignee opened the doors and left them that way for about half an hour. Then they took one sample. A few minutes later, they came back and showed the driver a picture of the product with three thermometers sticking out, each one showing the temperature about 46 degrees. They rejected the load.

About a week later, the same thing happened with the same consignee. Both times, we took the loads to a nearby certified testing facility and they tested five samples within about three hours after the driver had pulled away from the dock. Their tests showed temperatures about 36 degrees, well within tolerance.

The shipper told us not to return the loads, but directed us to destroy them, which we did. The shipper has now filed claims that add up to about $150,000. Based on our own tests I’ve declined the claims on the ground that the loads were improperly rejected. Now the shipper is setting off against our freight charges.

I think I’m right here, and so do our lawyers. But how can we deal with this? The shipper is a very good customer.

A couple more things: First, I don’t think it’s relevant, but both loads showed up a day late; our trucks broke down. It was nothing to do with the reefer unit, so it shouldn’t have affected the load temperature even though this happened in the Southwest where it gets pretty hot. Second, I solicited salvage offers on both loads and could have received 50 cents on the dollar, but the shipper wouldn’t let us salvage. So now I’m on the hook for the full $150,000, which the shipper is holding. Can you help?

 

A: This is a nasty one. Your lawyers may think you can win in court, but I’m nothing like so sure.

Your dispute is strictly one of fact: At what temperature did these loads arrive? The consignee says 46 degrees, and has proof; you say 10 degrees lower, and also have proof. Somebody’s wrong, and that’s hard to explain.

So far as I can tell, the consignee had no motive to fake its tests. You phoned in this question, and I suggested that perhaps the consignee — a retail facility — had over-ordered and wanted an excuse to refuse the loads without penalty. But you said the shipper told you the consignee immediately ordered replacement loads both times, which shot down this idea.

One might argue that by leaving the truck open half an hour in warm weather the consignee had raised the temperature on the rear cases from which it drew its sample. But your own testers drew from the same cases three hours later, which doesn’t seem long enough for a reefer unit to have dropped the temperature anything like 10 degrees.

Now, you do have five samples to your consignee’s one, which might steer a court your way. But set that against the fact that both loads were late because of mechanical problems — while they sat in the trailer, reefer or not, in a warm area — which might incline a court against you. And the consignee had no perceptible incentive to fudge the results, whereas you (notwithstanding that you hired an independent tester) did. All-in-all, does your evidence overpower the consignee’s? I think it’s pretty uncertain.

Besides, do you really want a knock-down-drag-out court battle with a “good customer?” Given that your position, while respectable, isn’t overwhelming, I doubt it.

There is, however, that salvage question. When I asked, you told me that Food and Drug Administration rules allow consumption of this product even if temperatures are shown to have reached as high as 55 degrees (although it must be re-chilled for sale). So, although the shipper may have been wise to protect itself against product liability issues, it had no objective justification for demanding that you destroy the loads rather than salvage them.

Given that the salvage potential was 50 percent of the value, I’d suggest you offer this as a compromise. You said you could live with that when I mentioned it, and I think it’s a reasonable solution. The evidence is simply too unclear as to whether the loads were at 46 degrees or 36 degrees on arrival, and I’d hate to risk an all-out court fight over the difference.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

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