Splitting Losses


Q. We are a wholesale receiver in Canada and recently bought a load of cucumbers originating from Mexico. We requested a CFIA inspection upon arrival as there are obvious problems in spite of good transit times and temperatures. The results of the inspection showed 25% total condition defects but no decay. We needed the product and there were no other cucumbers on the market. We shared the inspection results with the shipper who declined to make any adjustment or accept a consignment handling. While we know we could have rejected the product we elected to keep the product and claim damages so we could cover orders from as many customers as possible. After the product was sold, we provided an account of sales showing a net return of 66% of the total value of the shipper’s invoice. The shipper is not happy with the return. We would like to build a relationship with the shipper, but there is not much more we can absorb from the loss. What do you suggest we do?

A. Jaime Bustamante. First, we suggest you review your account of sales. Since you decided to keep the product and claim damages, your account of sales must show the date, amount, and price of the product sold. Your charges or expenses must be those resulting from receiving product that fails contract terms or DRC Good Arrival Guidelines. These includes freight, inspection cost, brokerage and any other direct out of pocket expense. Since the shipper offered you no help there are likely no other expenses you can claim. Without agreement you are essentially only entitled to break even. Frankly that is why most loads like this are rejected.

You have mentioned that you would like to keep working with them. There is no disagreement over the product received failing to meet DRC Good Arrival Guidelines or contract terms.   It is also true they were unwilling to discuss working the problem (which appears to be their fault) out with you.  If you are going to make a good faith offer, we highly recommend a frank discussion of how future claims will be handled .