The theory: Trade contractual loading inspections should be a guarantee of quality. A guarantee of quality should be a guarantee against claims.
A large part of the commodities trade, with regard to inspections, is subject to a strict framework of applicable rules. Trade associations such as the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Association (FOSFA), the Federation of Cocoa Commerce (FCC), the Sugar Association,(1) are strictly supervising the accreditation of superintendents. These associations issue stringent codes of practice to their inspections that must be applied. Sampling rules are very strict (i.e. the Gafta rules 124, i.e. the FCC rules 1.5.2015), meaning there should be no space for inherent quality issues being the cause of a transport claim.
The reality: Trade contractual loading inspections are not preventing transport claims
Despite inspections performed by first class international inspection companies, cocoa beans are still being delivered mouldy with condensation and this has continued over the years in importing countries. Some oil seed cargoes are still being delivered in a self-heating state following sea voyage, grains are still being rejected for sanitary reasons after sea transport due to fungus contamination, and the list goes on.
Where is it going wrong?
Trade contractual loading inspections govern the relationship between the seller and the buyer at a determined stage of the commodity transaction. But general quality issues evolve and alter throughout the transport chain depending on the environment they encounter during transit (i.e. alteration of water activity involving 8% moisture for cocoa bean is not a risk in the Ivory Coast whereas it is becoming a risk in Hamburg).
Analysing the quality for trade is a very different process to carrying it out for transport. Confusing these two approaches would be the same as confusing an annual account spreadsheet (static appreciation) and operating accounts (dynamic operation).
On top of this, trade arbitration works on the concept of “quality in average” whereas “average” is the enemy of risk assessment in terms of transport. Prevention risk assessments for transport should be performed in the context of absolute min./max. values (for example: range of 13% - 16% moisture in wheat consignment may involve a normal trade contractual level in terms of standard quality whereas it involves a high risk of claims with regard to the transport contract).
Last but not least: “Quality is simple. People are complicated”.
(1) Inspection of a number of commodities are not strictly ruled by international trade organisations such as the above mentioned: fruit & vegetable trade for example are inspected by some national organisation system of norms or local regulations.