By Mark Montague, DAT Solutions
When is a broker a shipper? Or a carrier?
The Final Rule for the Sanitary Transportation of Human and Animal Food, published in the Federal Register on April 7, has created a bit of an identity crisis for people and companies responsible for the transport of human and animal food.
The new regulation requires shippers, loaders, freight carriers, and receivers to use a range of sanitary practices to ensure food safety during transport.
The intent is pretty straightforward: ensure that food does not become unsafe during transportation operations.
The confusion is in how the FDA defines the roles of those involved. Specifically, the FDA rule has changed the definition of "shipper."
According to the regulation, a shipper is the person who arranges for the transportation of food by a carrier or multiple carriers sequentially.
Practically speaking, the "shipper" definition
would apply to freight brokers as well, making
them equally responsible for ensuring food safety during transport.
A Big Change?
Many brokers consider the FDA rule to be a backward step, in that the lines between shipper, broker, and carrier are once again blurred.
Lindsey Graves, vice president of operations for Sunset Transportation in St. Louis, says it's up to brokers to make the distinction clear. She compares the new FDA rules to what brokers faced when CSA scores were first published.
"We had processes for qualifying carriers that we'd been doing from day one," she says. "But CSA forced us to develop a more in-depth internal policy that was documented and standardized so that every person used the same process."
She and other brokers say the FDA rule will require a similar approach to formalizing responsibilities for food transport.
Rob LaForte owns and manages Columbia Fresh Transportation Services, a small freight brokerage
in Portland, Ore. He says the new rule will cause him to get more documentation from his shipper customers. He's planning to create a form for shippers to fill out that specifies the requirements
for each load.
"Some of our customers are very specific about the requirements for their produce while others may simply call and say, 'Hey, I have a load of potatoes that needs to go from here to there,'" says LaForte. "They might not even specify the temperature, assuming I would know all that."
LaForte said he won't need to change his processes much to comply with the new rules, because 98 percent of his loads are refrigerated produce. However, he says, the rule could be significant for brokerages that transport food only occasionally.
"They may need to decide whether transporting
food is worth the risk and the additional paperwork," he says.
Insurance could be another problem. "I'm not aware of an insurance product that would cover a broker in the event of food contamination," LaForte said. "Brokers carry contingent cargo insurance, but that wouldn't cover them if someone became seriously ill because of contamination."
Communicate with Carriers
If you move food, or you're brokering a load to an outside carrier, now is the time to review your standard contract agreement and perhaps add verbiage that addresses the new requirements, which include equipment standards and documentation.
The new rules will require extra effort for all parties involved. The shipper will need to detail all the requirements and pass that on to the broker, who will then pass the information on to the carrier. No matter how blurry the rules may be, these roles need to be more sharply defined than ever.
Mark Montague is industry rate analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.