April 18, 2016 3:15 AM, EDT

Brokers Disappointed to Be Included in New Rule on Food Transportation

ChopTank Transport

This story appears in the April 18 print edition of Transport Topics.

A few years ago, freight brokers asked the U.S. Food and Drug Administration to clarify whether they would be responsible parties when the agency published its final rule on the safe transport of food.

They got their answer earlier this month when the rule was published in the Federal Register, but it was hardly what they expected to hear.

Not only does FDA’s sanitary transportation of human and animal food final rule extend to brokers some of the same responsibilities for safe food transport typically reserved for shippers, it also flatly defines brokers as shippers when they plan the transportation of food.

“We just arrange the freight,” James Lee, vice president of legal affairs for Choptank Transport, a third-party logistics firm based in Preston, Maryland, told Transport Topics. “But what they’ve said is that since the broker is arranging for the freight, then the definition of shipper is going to include the broker. We’re not excited about it.”

“This was a solution in search of a problem,” said Bob Voltmann, president of the Transportation Intermediaries Association. “So we’re not sure why this law had to be adopted.”

FDA said the rule, published April 6, was issued to minimize risk of food contamination due to transport practices related to equipment design specifications, cleaning procedures, pre-cooling requirements and operating temperature requirements.

It establishes requirements for shippers, brokers, loaders, carriers by motor vehicle and rail vehicle and receivers engaged in food transportation.

The rule becomes effective June 5, but companies have a year after the effective date to comply, while small companies have two years.

“I think the most troubling aspect of the rule is that the broker now has all the responsibilities that a shipper has in terms of communicating what’s required to keep the food safe, the type of equipment that’s required and complying with training and record-keeping requirements,” said Craig Helmreich, a transportation attorney and partner in the law firm of Scopelitis, Garvin, Light, Hanson & Feary.

Helmreich added, “I think that most brokers are going to have to do a crash course in what’s required under the food rules and how to minimize their [legal] exposure. The rule doesn’t directly speak to liability, but you can certainly envision a lot of litigation if the ball is ever dropped.”

Since many brokers are not as knowledgeable as shippers about all the requirements of food transport regulations, Voltmann said his Washington-based group will put together educational programs, update its model contract and create a guidance workbook for its 1,400 broker members.

In a May 2014 comment on the proposed food transport rule, TIA had argued that since a brokers neither physically touch the freight, nor exercise control over motor carriers, they should not be brought under the rule’s purview.

The National Customs Brokers and Forwarders Association of America Inc. argued in its comments that if everyone is a “shipper,” then no one is ultimately responsible.

“With this lack of precision, the result inevitably will lead to confusion and finger-pointing not conducive to food safety,” NCBFAA said.

However, while the FDA agreed that brokers likely do not possess the degree of knowledge about food safety that a food manufacturer would, current industry practices demonstrate that brokers and other third-party logistics providers obtain vehicle preparation and sanitary transportation information, and when necessary provide them to carriers.

“Therefore, we do not regard brokers and other third-party logistics providers as inappropriate persons to perform the functions assigned to a shipper that take place before transportation occurs,” the agency said in the final rule.

Choptank’s Lee is convinced the rule is going to lead to brokers forging more contracts with carriers containing more fine print to protect themselves.

“Right now the burden is on the shipper to prove that he put the product on the truck in good condition,” Lee said. “Anytime we’re related to a load, we are a shipper. That’s the bad thing about it.”