“A lot of times an inspection is not an optional thing,” he said.
Tipper Sears, salesman for D’Arrigo Bros. of New York Inc., New York, said in-house evaluation of product doesn’t substitute for a federal inspection.
“If you feel something is out of grade, you have to get it inspected, no matter what,” he said.
Sears said the new 15% increase won’t change the company’s use of USDA destination inspections.
Siger said his company does not use USDA inspections in the same way as it did a decade ago.
With inspection fees in the low hundreds of dollars for a multiple lot inspection, he said an inspection is not practical as an everyday tool.
“When you are doing 6,000 to 7,000 loads of product a year, you start multiplying that by $150 and that adds up real quick,” he said.
Siger said receivers need to be more judicious in how they use inspections.
“We have become a better company by strengthening our quality control abilities and using USDA inspection when we find a problem,” he said.
Siger estimated the company requires less than 20% of the inspections the company needed five to seven years ago.
“We really used the USDA in some cases as our (quality control), and with certain commodities we would get every load inspected to alert ourselves if we had any problems,” he said. “Now the cost has become so prohibitive that is just unfeasible to do that.”
Siger said the company hired a former USDA inspector as a full-time quality control person and has trained their personnel to know the condition of a load.
“We have trained our receivers to look at product and alert our QC person,” he said. “If it needs inspection, only then will we get a federal inspection.”
The advent of digital photography has helped communicate with suppliers about problems with loads, particularly if the parties have an existing relationship.
“If you do an in-house inspection along with digital photographs, it is generally sufficient to get a message across when there is a problem,” he said.
Consolidation in the industry is a factor in the reduced use of inspections, Siger said.
Buyers and sellers tend to know one another better.
“People will know you are shooting straight with them and will deal with you,” he said.
However, Siger said the need for inspections won’t go away.
Even shippers with long standing relationship with receivers may have growers with an interest in the load who want an inspection, Siger said.
“If you get in a situation where there is a disagreement and you don’t have the USDA inspection to back you up, that would lessen your chances of your side holding up in some type of arbitration or PACA claim,” he said.