DC Velocity - May 2016

The mantra of U.S. freight brokers is that they’re not shippers. Brokers arrange the transportation of their customers’ goods. But the freight belongs to somebody else, and brokers never touch the shipments or the equipment used to haul them.

The Food and Drug Administration (FDA) has other ideas. In publishing its long-awaited final rules on the sanitary transportation of human and animal food, the agency did what brokers asked it not to do: classify them as shippers.

This means brokers must comply with the regulations as if they were the shippers. The food producers are indemnified once they turn over their shipments to the broker. The producers will instruct the broker on the requirements for the product’s safe carriage and handling. However, the responsibility for guaranteeing a clean shipping environment—and the corresponding liability if the ball is dropped during transportation—rests with the broker.

In broad strokes, brokers will be tasked with establishing controls for the transport of food that comes in contact with the environment. (The rule exempts the transport of frozen foods as well as food completely enclosed in containers, unless temperature controls are required.) Brokers must also notify the carrier and cargo loader of the conditions the shipping equipment must be in to achieve compliance. For example, brokers must certify in writing that a trailer has been precooled to a proper temperature, although there is nothing that said the freight itself must be precooled.

Failure to comply with the rules could lead to civil and criminal penalties if folks are sickened by food that went bad during transport. It could also leave brokers exposed to significant out-of-pocket costs if food becomes adulterated while in transit.

Chris Burroughs, senior government affairs manager for the trade group Transportation Intermediaries Association (TIA), said that although the industry knew it had a key role to play in the process, it felt the manufacturer should be classified as the shipper because it had the deepest knowledge of the product’s characteristics. Despite that, the industry is prepared for

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WHEN YOUR SCANNER SYSTEM LOOKS A LOT LIKE YOUR JUNK DRAWER

FDA classifies brokers as shippers in final rules on food transport safety

the regulations because it already follows many of the practices the FDA outlined, Burroughs said.

Brokers will “embrace this and [will] be prepared to educate our shipper partners and ourselves on how to best comply,” said Robert Kemp, president and CEO of DRT Transportation LLC, a broker based in Lebanon, Pa.

That doesn’t mean Kemp’s looking forward to the experience. “This ruling is just another example of the government getting in the middle of the intermediary business, without really fully understanding what we do,” he said in an e-mail.

IMPLEMENTING THE LAW

The final rules, which implement the Food Safety and Modernization Act signed into law in 2011, represent the FDA’s first foray into regulating transportation. For larger companies, the rules take effect one year after their publication date, which is expected to be early to mid-June. Smaller companies, defined as shippers with less than $27.5 million in revenues and carriers with fewer than 500 employees, would get two years from the publication date to comply.

Ironically, the FDA said in January 2013, when it first proposed the rules, that it had no plans to add more layers of regulation to current sanitary food practices. The agency said at the time that its goal was to ensure that the status quo wouldn’t trigger unnecessary risks to the food sup- p. 27