Fresh Produce Shipping

Damages and Compensation

Rex C. Tester

• Publisher: Informa Law from Routledge
• Year: 2021
• ISBN:
  9781000473896
• Edition: 1
• Topic: Law
• Subtopic: Civil Law
• Index: Law

This book is an in-depth study of air and ocean goods-in-transit claims. It sets out to guide and assist businesses within the fresh produce industry to successfully implement the best processes and procedures to maximise their recovery efforts against contracted carriers.

Fresh Produce Shipping focuses heavily on protecting the rights and recovery aspects of companies involved in growing, selling, and transporting fresh produce. It gives importers, exporters, loss adjusters, surveyors, and freight forwarders an easy-to-understand guide to the management and requirements of submitting claims. It provides an overview of the shipping terms and procedures involved when raising a claim. The book offers specific and detailed industry knowledge to stakeholders who would not normally have access to such information without the employment of specialists or legal counsel, providing an inexperienced reader with the tools to submit a claim and achieve an understanding of protocol.

A valuable guide and comprehensive reference for parties seeking compensation for lost or damaged goods, this book will be of relevance to shippers and importers of fresh produce, lawyers acting for commercial clients and underwriters, cargo surveyors, trade bodies around the world representing fresh produce operators, and forwarders wishing to support their clients.

CHAPTER 1 An overview of the claims process

DOI: 10.4324/9781003219231-1

The loss

1.1 The vast majority of losses suffered on perishable consignments arise through damage from exposure to adverse conditions during transit. Claims arising for consignments actually lost in transit are far fewer and far more straightforward to administer, but these are dealt with in detail below.

1.2 Most of the time you will discover there is a loss when your consignment is collected from the airport and has arrived back at your pack house in a damaged condition.

1.3 Alternatively, your ocean container arrives at your pack-house and on opening it, your quality control staff notice a smell, or probe or sense a warmer-than-expected temperature.

1.4 Maybe you saw that the container vent was closed on arrival, or upon opening you smelt that alcoholic smell which portends major problems.

1.5 Alternatively, the container is de-vanned, and the container is allowed to depart, following which your quality control staff open boxes and find the produce has a problem – perhaps condensation, over-maturity, rots, and so on.

1.6 Maybe you can sort and repack, but it still proves a serious reverse for you. Perhaps you cannot begin to repack for your customer or distribute it because it is simply not good enough.

1.7 Now you have to deal both with the shortfall of product so far as your customer is concerned and decide what to do to get moving with the claim for loss against the defaulting party.

1.8 If you have sufficient throughput you may be able to cover the shortage, but if not, you may have to source it elsewhere and pay a premium for doing so.

1.9 What else can you do?

1.10 Your supermarket customers are not going to be sympathetic unless it is a major problem such as the time in the early 2000s when in excess of 50 containers of melons were offloaded and left in Jamaica, and even the multiples had to accept that this event fell well outside the realm of isolated hiccoughs that an individual importer would be expected to remedy.

1.11 Dealing with the shortage itself falls outside the purview of this book, but the writer is aware of the enormous efforts which you may have to make in this pursuit.

1.12 So, where do you start to tackle your claims problem?

1.13 You cannot start too early: in both air and ocean cargo situations, the immediate priority is to notify the carrier of the problem, but the carriers’ reactions are varied and sometimes surprising, even on isolated occasions, verging on the unreasonable and hostile, making it difficult to believe that you are actually the customer¹ of the carrier.

1 A little thought shows that a consignee, importer, claimant is effectively also the customer of the carrier, despite the shipper having been the party to conclude the contract of carriage. It is quite common for the consignee to stipulate which carriers the shippers should use, and which to avoid.

Air

1.14 On rare occasions, your driver may have detected a problem when collecting from the airport.

1.15 However, there is often significant resistance by the airline’s warehousemen to allow your driver to give a claused signature, and your driver knows he cannot protest without the possibility of being subjected to significant aggravation and threats of being offloaded back into the warehouse when he is under orders to get the consignment back to your pack-house as quickly as he can.

1.16 There are numerous anecdotal stories of physical threats to drivers protesting too strongly, and since your driver knows he will have to return for subsequent collections, it is not in his (and, hence, your) interest for him to pursue his discontent too strongly.

1.17 The immediate and most important task is for you to send a notice of claim to the airline with the absolute minimum delay: you must provide reasonable details to enable them to identify the consignment and be aware of the type of damage involved.

1.18 You may call up the airline’s cargo office advising of the damage, and you will almost invariably be told to simply send in a claim notice, because much of the time you will not be able to speak to anyone who has expertise in the field of claims.

1.19 It is vital that you extend an invitation to the airline to inspect the cargo for itself; it is highly unlikely to take the opportunity to do so but having declined or ignored the invitation means that they are not in a strong position to challenge your own surveyor’s report, and/or your quality control inspection records.

1.20 You are then ‘at your ease’ – relatively speaking – to gather your evidence of the damage, consider what has caused it, calculate your losses, and prepare and submit the claim to the airline.

1.21 In all but the smallest of losses, it is prudent to immediately instruct an independent surveyor to inspect the damage and produce a report – you will have to pay for this, but you can add the cost to your claim, irrespective of whether the airline disputes that you are entitled to do so.

1.22 Whilst the airline will seldom, if ever, instruct its own surveyor you can be sure that the airline’s claims department expects you to produce the survey report as evidence, but despite being given the opportunity to carry out its own survey, it should be no surprise when it disputes the conclusions of your surveyor, despite having not carried out its own.

1.23 Should the matter progress so far as Court, the airline and its advisors will actually know that such challenges are unlikely to be successful unless they can point to a clear and obvious fault in the claimant’s survey report.

1.24 Additionally, it has become more difficult for an airline (or ocean carrier, for that matter) to take this line as a result of a case brought in the English Court.² However, this is unlikely to stop carriers attempting to dispute the conclusions in a claimant’s survey report.

2 Griffiths -v- TUI UK Limited [2020] EWHC 2268 (QB).

Ocean

1.25 If the container is opened and the problem is immediately obvious, the best thing you can do is close it up, call the carrier, and tell them what has happened and ask them what they would like to do about it.

1.26 Their reaction will normally be that they will instruct a surveyor to inspect the cargo in haste, which must be matched by your instructing a surveyor to act on your behalf.

1.27 The ideal is for the two surveyors to inspect together, so that disputes about the actuality of the damage can be avoided – one hopes also that they can agree on the cause of the damage. However, a joint survey is not always possible.

1.28 If the container can be held until the surveyor or surveyors attend and check it, this will be beneficial since it is possible that the cause of the damage will be promptly discovered as a result of inspection of it and its settings.

1.29 More often it is the case that surveyors are not immediately available, and as a consequence the container cannot be held at your pack-.0house.

1.30 Following departure of the unloaded container from your pack-house, be aware that you cannot expect the carrier to check it out and report back to you as regards any problem – they will be reluctant to disclose that evidence, and only litigation or a credible threat of it will force out the details of whatever inspection they may have done.

The strategy to be adopted

1.31 There can be no alternative to ‘front loading’ your actions in regard to any claim; find the time to do the claim preparation work right at the beginning.

1.32 As aforementioned, the prerequisite need is to put the carrier on immediate notice and be as certain as possible that they have received that notice. You can reasonably depend on ocean carriers to respond, but air carriers’ responses are less certain, and they will range from reasonable responses to apparently being completely ignored.

1.33 Then, if you can gather your evidence while it is ‘fresh’, much heartache can be avoided at a later stage, when the carrier or its solicitor perhaps demands to see something which may need extended searching of your archives – if it has not been dumped in the interim.

1.34 Alternatively, as an importer, trying to get pre-shipment evidence from your supplier will always be problematical if not done at the outset; and consider how you will deal with a situation where you no longer take product from that supplier.

1.35 Thus, place all emphasis on gathering all relevant papers.

1.36 Gather transit documents, quality control reports, the surveyor’s report, pre-shipment evidence, and a clear understanding as far as possible of the transit history together with – in the case of air carriage – weather reports at origin, transhipment points, and destination if there is temperature abuse as so often happens, so that you can point to a probability of your consignment having been left out in ambient temperatures.

1.37 Many a case has been lost because the claimant was required to prove the consignment was in sound condition and at the right temperature when loaded into the container or delivered to the airline, and a year to two after the loss, it has proved impossible to locate that proof.

1.38 A comprehensive guide now follows as to what you need to do to put yourself in the best possible position to succeed with your claim; there are many comparable actions in ocean container and air consignments, but there is also enough divergence to need separate consideration of these modes.

CHAPTER 2 An overview of the legal framework for air cargo ...