Rule Book Interpretation

INTERPRETATION: CHAPTERS 8 AND 20
 
813.00.    LOAD-OUT PROCEDURES   
824.00.    DEFAULT   
826.00.    FAILURE TO DELIVER ON CONTRACT: DAMAGES
2028.00.  LOADINGS IN SATISFACTION OF WAREHOUSE RECEIPTS 

To clarify the obligations and responsibilities of parties involved in the Spring Wheat delivery process, the Board of Directors has officially approved the following interpretation: 

Rule 813.00. requires that 25 rail cars be loaded out in a single day.  Whether the minimum load-out rate for rail cars has been met shall be determined by the issuance of the first official/certified inspection grade (and protein when requested) on each car that meets or exceeds the delivery specifications.  Therefore, failure to load out 25 cars in one day with a first official/certified inspection grade that meets the delivery specifications shall be evidence of a default under Rule 824.00.  An elevator is expected to make all necessary arrangements so as to obtain same day inspection results and meet the minimum load-out rate.  Upon notice that a rail car does not meet the delivery specifications, the elevator shall reload the same day until the first official/certified inspection grade meets the delivery specifications.  Failure to do so shall be evidence of a default.  In such case, recourse may be made to Rule 826.00. for damages.  Furthermore, all costs incurred to reload in order to obtain the first official/certified inspection grade that meets the delivery specifications, including switching charges and demurrage for both the rail cars failing to meet the delivery specifications and loaded cars subject to delay in shipment shall be for the account of the elevator. 

Should the party surrendering the warehouse receipts request Federal reconsideration of grade pursuant to Regulation 2028.00., the cost of appeal shall be for the account of the taker.  Allocation of the other costs and any remedy will be dependant upon the Federal regrade results.  If a rail car fails to meet the delivery specifications, all additional costs incurred to meet the delivery specifications and obtain a Federal grade, including demurrage, reload and switching charges shall be for the account of the elevator.  Demurrage, as documented by a railroad invoice, for the loaded cars that meet the delivery specifications upon regrade shall be for the account of the taker.

Either party is entitled to appeal the Federal regrade results to the Federal  Board of Appeal.  The party making the appeal shall pay the cost for appeal.  Demurrage on the rail car(s) appealed that do meet the delivery specifications shall be for the account of the taker.  Demurrage on the rail car(s) appealed that do not meet the delivery specifications shall be for the account of the elevator.  

If the elevator does not prevail upon notice of Federal regrade results, the elevator shall reload until the first official/certified inspection grade meets the delivery specifications.  Reload shall be completed within twenty-four hours of such notice.  If the elevator does not prevail upon notice of Federal Board appeal results, the elevator shall reload the same day that the railroad makes the rail cars available, until the first official/certified inspection grade meets the delivery specifications.  Failure to  timely reload shall be evidence of a default.  Additionally, the elevator shall give priority to reload the failed car(s) over other cars constructively placed. 
The elevator shall not be required to release any rail car(s) until all the cars to be shipped meet the delivery specifications upon completion of the grading and appeal process. 

The Rules, Regulations and Interpretations of the Exchange do not prohibit the parties from mutually agreeing to monetary adjustments, or modification of the delivery process or terms upon failure by the elevator to meet the delivery specifications on Spring Wheat that is loaded-out.