Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/989498
bUSINESS 28 | Overdrive | June 2018 Independent/small fleet owner-operator compli- ance with stipulations outlined in the Food Safety Modernization Act has been required since April. Larger fleets' compliance deadline was a year earli- er. The law doesn't really change best practices around refrigerated food hauling, but it does put new burdens on shippers and receivers to ensure quality of food products during the loading and delivery process. Despite much of the burden of new FSMA- related compliance falling on shippers of perishable foods, carriers are incur- ring added liability them- selves too often and wrong- ly, says Henry Seaton, a transportation attorney. There's some evidence of FSMA being interpreted too broadly, likewise ship- pers' willingness to use contracts to "cram down" their responsibility onto carriers. "Some particularly large food shippers have concluded wrongly that FSMA requires shipments in which seal integrity has been compromised to be dumped," Seaton says. These contracts can lead receivers to refuse refrigerated loads and then leave carriers no recourse to collect payment or even salvage the load in some cases. Generally, under FSMA, carriers are responsible for being able to provide upon request by any broker or shipper/receiver (and any loading and unloading per- sonnel) information about the trailer's previous loads and documentation of its cleaning (wash-out receipts, for instance) and proper pre-cooling. Shippers are free, how- ever to make more rigid contract requirements that have "nothing to do with the freight's" quali- ty, Seaton says. This can result in requiring carriers to "dump the product" for frivolous reasons. For example, "it's rejected because it's five hours late getting to [the destination, and] they want it trashed," he says. When a small carrier signs a highly restrictive contract that doesn't grant the carrier a right to inspect the freight, and the carrier doesn't have insur- ance covering certain terms of that contract, then a loss would be considered unin- sured, he says. "A contract is a risk-transfer device. A small carrier can't afford to assume an uninsurable risk. For a guy who's got two trucks, a $40,000 claim, and he needs the money to operate, the legal sys- tem doesn't give him any recourse." The "mischievous thing" about problem language in some contracts, says Seaton, is "it's not what the law requires." "The practice of simply rejecting edible food prod- ucts and requiring dump- ing is unconscionable and unsustainable." Such con- tract provisions "are typical of the type of contract cram-down that is becom- ing all too frequent with the full implementation of FSMA." – Todd Dills Haulers take heat under new food regs "The FSMA regs give the shipper wide berth to contract some of the san- itation requirements away," says Craig Leinauer of Travelers Insurance. "We do see shippers forming contracts with carriers that push the sanitary requirements down on them. We advise carriers to read those contracts carefully. If there is a reassignment of those responsibilities, you have to understand what you're getting into." Before you buy or lease a truck, research the type of freight you want to haul. By fully understanding your preferred niche, you may uncover certain costs, specific requirements and other factors that will influence your purchase. The Partners in Business program is produced by Overdrive and the consultants at ATBS, the nation's largest owner-operator business services firm. Partners in Business seminars will be Aug. 24-25 at the Great American Trucking Show in Dallas. Admission is free. Visit GatsOnline.com to learn more or to register for the show. Want more Partners in Business tips and information on how to run your small trucking business more profitably? Visit OverdriveOnline.com/pib-pod- casts to find 20-minute pod- casts on topics such as manag- ing time, budgeting money and controlling fuel costs. PARTNERS IN BUSINESS TIP: DEFINE YOUR BUSINESS