PACA Marketing Specialists use the guidelines in the FOB Good Arrival Guidelines Table (PDF)
to interpret the maximum tolerances allowable for various fresh fruits and vegetables trucked to locations that are 5 days away from the shipping point, the normal delivery time for coast-to-coast shipments by truck. The tolerances shown in the table are based on the U.S. Grade Standards for those commodities that have standards, and additionally, are based on judicial interpretations of the terms "F.O.B" and "suitable shipping condition" as defined in the PACA regulations. "Suitable Shipping Condition" means that the product meets contract terms at shipping point and will not deteriorate abnormally given normal transit time and conditions. The information in the table can be used to determine whether the product was loaded in suitable shipping condition.
Although the table can give guidance concerning whether an F.O.B. contract has been breached, many factors enter into the determination of whether a load of produce meets the terms of a particular contract. If product is sold "F.O.B. acceptance final," rather than merely "F.O.B," an inspection showing a breach in one instance may not show a breach in the other. Some other considerations may be the timing of the inspection, air temperatures maintained by the carrier, whether or not transit time was normal, the location of the product when it was inspected, and how much of the load was inspected. You are encouraged to consult with your nearest PACA branch office for an interpretation of your rights, given the specific circumstances surrounding your transaction, or for shipment period of less than 5 days.
USING THE TABLE
In the "U.S. Grade Standards" and the "% of Defects Allowed" columns, the first number represents the maximum total percentage of damage (defects) allowable for the commodity to meet the terms of an F.O.B sale at destination. If the product is sold without a grade contract, the number represents the maximum percentage of condition defects. The second number, if any, represents the maximum percentage of serious damage allowable. The third number represents the maximum percentage of decay allowable.
Example: The series 15-8-3 means 15% total damage, including not more than 8% serious damage, including not more than 3% decay.
For those commodities showing only two numbers, like Artichokes, there is no separate tolerance for defects causing serious damage.
Where an asterisk (*) appears next to the commodity name, the U.S. Grade Standards specify special tolerances and types of defects, and should be consulted before making a judgment regarding whether the inspection results show a breach of contract. In addition, the following abbreviations are used in the table: "stds" = U.S. Grade Standards, "vsd" = very serious damage, "int." = internal, "ext." = external, and "sda" = sunken discolored areas.
As previously stated, the guidelines apply only to truck shipments. However, produce shipped by rail where transit periods are substantially longer will be subject to the same maximums allowed for truck shipments, as will international ocean shipments, unless precedent has established, or adequate proof is presented, that foreign markets have come to expect and tolerate a higher percentage of defects.
Please note that the information contained in the F.O.B. Good Arrival Guidelines Table does not have the force of law and is subject to judicial review at any given time.