OTTAWA, Ont. – Too often one or two bad apples will spoil a situation for everybody.
For the drivers behind the wheel of produce trucks, whether it’s a bad apple, wilted head of lettuce or bruised peach, a delivery situation can quickly sour and create a myriad of problems.
A buyer likely will not be interested in paying for an unsatisfactory load and the shipper may not be quick to own up to a quality discrepancy. Regardless of who is at fault, time, fuel and money were necessary to transport the load; and a carrier can easily get stuck in the middle, left waiting for a resolution and a paycheque.
“I’ve talked with some carriers and their drivers would rather take a load of dirt than produce, because of the hassles and the treatment on the docks. But it’s beginning to change now and they know they have to treat the truckers like people,” said Fred Webber, vice-president of trading assistance with the Fruit and Vegetable Dispute Resolution Corporation (DRC).
The DRC was established in 1999 to provide dispute resolution services to buyers and sellers of fresh fruits and vegetables. About a year and a half ago, the Ottawa-based organization opened its doors to the transportation component of the equation, to provide produce carriers the same outlet for resolution as those on either end of the shipment.
“The transportation side came on-board 18 months ago, but we were studying it a great deal of time before that,” commented Webber. “The truckers are now treated the same as the shipper. Before, there was no requirement to treat the trucker the same way as the shipper. Now when somebody unloads a load and there’s a problem, it’s the same process calling the trucker as it is the shipper.”
The DRC was established as a private, non-profit organization of produce companies pursuant to a provision in the North American Free Trade Agreement (NAFTA), which called for the creation of private commercial dispute resolution organizations for agricultural goods.
The corporation is the result of efforts by the North American produce industry and the governments from Canada, Mexico and the US, to create such an organization for the fresh fruit and vegetable trade.
“It was born to fix a Canadian problem,” noted Webber. “US companies were reluctant to ship to Canada because shippers were more protected in the States. The DRC came along to extend those rules and give shippers confidence in Canada.”
The drafted rules are not only in compliance with regulations in the three countries, but are also supported by rules in the New York Convention, which was signed in 1958 and essentially requires courts to recognize international arbitration as binding law.
“Fresh fruits and vegetables were never regulated for claims and it was always common-law when it came to dispute resolutions,” explained Webber. “What we really need is one judge. Here’s the shippers, the trucker and here’s the buyer and lets just get it done.”
Member companies of the DRC are not only offered a cheaper alternative to going through the standard legal system, but also an expedited conclusion to disputes.
“We require claims to be resolved in nine months,” said Webber. “Going through the court or through the government can take years. You can also end up paying the wrong person and have to pay someone else again, or pay nobody and get in trouble with bills and credit.”
The dispute resolution process progresses through a number of phases and a conclusion can be reached anywhere along the way. First, the sides are required to talk to each other, to see if an understanding can be reached. If no arrangement can be agreed upon, each side presents its own version of the facts to the DRC and the discussion goes back and forth to try and reach a resolution; and Webber noted 85% of conflicts are resolved at this point.
For disputes that head beyond the in-house discussion, an outside mediator is mutually selected by the parties to review the case. All facts from the informal exchange are sealed away and each side compiles their arguments based on everything they have learned through the discussions. A final decision is then reached by the mediator based on the facts presented.
As well as offering a credible neutral third party to provide dispute resolution services, the DRC also prides itself on being available to its members at all times.
“We offer free consultation to our members and some education along the way,” said Webber. “They can call and say, ‘I just backed into a dock, what can I do right now to be ready for discussion next week?'”
All of the organization’s 1,179 members are posted on the DRC Web site (www.fvdrc.com) and company’s who do not comply to resolutions are flagged by the corporation.
“We post members on our Web site and if you don’t pay, we list you as a bad member,” added Webber. “If you’re not a DRC member it’s becoming increasingly difficult to buy products.”
Since its inception, the growth of the DRC and its membership is moving along on schedule; and by adding the transportation sector, the organization has headed in its desired direction.
“Buying and selling is heavily regulated in both countries but transportation was left out of it,” said Webber. “The next big thing was for us to do that for transportation. As truckers become members, they’re going to require their partners to be members.”
But Webber is quick to point out the size of the membership is not as important as the membership retention rate.
“Every time there’s a dispute somebody wins and somebody loses,” he explained. “We have about a 92% retention rate in our membership, and we’re very, very proud of that, so it must be a fair process.”
Through October 2006, member companies had submitted 835 files to the DRC for resolution. The organization has closed 823 of those complaints, which saw companies recover more than $12 million in disputed proceeds as a result of their submissions to the DRC.
“We live and die by this…I don’t care whether you have a multimillion-dollar company, you’re a small driver or a CEO; everyone gets the same treatment,” said Webber. “Everyone pays the same membership and we don’t accept donations.”
Although one bad apple may still spoil the bunch, the backing of a continent-wide organization may make hitching up the next load a little easier to swallow.
“Who is to say the trucker did it and not the shipper?” added Webber. “The truckers haven’t had a lot of resources until now.”