Freight brokers have traditionally been worried about laws that effect the products they ship. But new government regulations are bringing with them new worries. According to a guest blog post by Todd Bryant in Supply Chain Drive, the main focus for most of these newly-minted regulations are the elimination of contamination in food shipments. With food and food raw materials being the single largest commodity hauled by trucking companies (22%)- it is imperative that brokers have an understanding of these regulations because they now have liability to them.
The so-called “Sanitary Transportation of Human and Animal Food” rule explicitly states how “shippers, receivers, loaders and carriers” in the business of delivering food items within the United States are subject to compliance. Section 111, for example, of the Food Safety Modernization Act, has directed “a study of the transportation of food for consumption in the United States.”
These rules made it clear that brokers are now equal partners in ensuring the safe transportation of products, equating them to shippers. A waiver from compliance is possible for a business:
- Delivers only “Grade A” milk or milk products in bulk after passing inspection from the National Conference on Interstate Milk Shipments;
- Delivers shellfish or shellfish by-products in accordance to standards set by the National Shellfish Sanitation Program (NSSP) authority; and
- Delivers to its own outlet of food or food products or receives only food served directly to consumers upon delivery
The new rules make brokers review their knowledge of transportation laws currently implemented as far as food items go. One of the laws that Bryant mentioned is Section 409 (h)(1) of the Federal Food, Drug and Cosmetic (FD&C) Act which states:
- “A manufacturer or supplier of a food contact substance may, at least 120 days prior to the introduction or delivery for introductions into interstate commerce of the food contact substance, notify the Secretary of the identify and intended use of the food contact substance, and of the determination of the manufacturer or supplier that the intended use of such food contact substance is safe under the standard described in subsection c)(3)(A).”
Now, what is stated in the said subsection is as follows that if a regulation:
- “fails to establish that the proposed use of the food additive, under the conditions of use to be specified in the regulation, will be safe: Provided: That no additive shall be deemed to be safe if it is found to induce cancer when ingested by man or animal.”
Exemptions were also mentioned in anticipation of manufacturing practices that involved importation of food grade ingredients with the intent of using it on food products for export.
Other notable exemptions mentioned:
- Companies having an average annual revenue of less than $500,000;
- Farm directly involved in importing or transporting live food animals (exception to the exception: molluscan shellfish as aforementioned in this article);
- Companies involved in shipping food contact substance, defined in Section 409 (h)(6) as “any substance intended for use as a component of materials used in manufacturing, packing, packaging, transporting, or holding food” (somewhat related to Section 409 (h)(1);
- Transportation of food items in a reefer or any item that needed “temperature control for safety”; and
- Unprocessed by-products with the goal of said raw materials as ingredients for animal food.
Improper handling of items for shipment would affect the way these food products - whether shipped as raw materials, processed additives or finished products - in terms of potability and taste. Keeping food safe from contamination is goal.
Proper handling and storage are not limited to the warehouses. The same standards and specifications are also required from the transportation equipment and operations involved in temperature-sensitive cargo such as food products from raw materials to finished products. This made the Food and Drug Administration extra sensitive to the shippers not trained enough when it comes to sanitary transportation practices. For the most part, it boils down to the level of responsibility that these shippers are willing to shoulder in accordance to the new rules.
For brokers, this could mean that they start to pivot a way from handling food products or agriculture products. With food and food products being such a large percent of truckload freight, it means more likely that brokers will have additional responsibilities in handling food products- and thus should implement a more rigorous food transportation compliance program. For brokers that do this, it gives them a huge market edge because they can go to shippers and show them they have such a program and are not only ensuring compliance, but have invested in the infrastructure to monitor and report on food safety and tracking systems among its carrier base.
One could also argue that food is the most likely place we will see blockchain applications hit the trucking space first. After all. the ability for brokers to monitor food compliance, handling, and termperature control is only as good as the carriers that haul the freight. With blockchain, the broker will know everyone that had control of the freight, what temparatures they kept the freight at, and how the freight was handled from farm to fork.