It’s actually quite common for those in the shipping and logistics industries to get stuck with abandoned cargo after a shipment. There are guides and regulated measurements – put in place by port authorities – that can legally channelize those abandoned goods for demurrage and detention fee recovery for the either the consignee or consignor.
What Exactly is Abandoned Cargo?
The International Federation of Freight Forwarders Associations (FIATA) says cargo is considered abandoned when “it becomes apparent that the consignee has manifested no intention to take delivery before the expiry of the free period.” However, this “free period” is not the same from country to country or time period to time period. In China, for example, the time period for disposal of abandoned cargo is 60 days; in the USA, though, it is six months.
Reasons Why Cargo Becomes Abandoned
There are many reasons for cargo abandonment:
- Pandemics: Covid-19 resulted in tons of abandoned cargo at ports all over the world. Countries closed their ports and consignees abandoned their cargo to avoid additional costs.
Refusal to claim responsibility: Sometimes consignees refuse to claim responsibility in regards to disputes in quality or quantity.
- Confiscation: If cargo is confiscated because of a violation of shipping regulations, the responsible party may try to avoid responsibility and abandon the cargo.
- Bankruptcy: Consignees may abandon the cargo if there is a bankruptcy or they cannot pay the customs duty.
- Dumping: Consignors may simply dump unwanted goods without added responsibility, leaving consignees in the lurch.
Who is responsible for cargo abandonment will depend on who is listed on the Bill of Lading (BOL). This is the contract between consignor and consignee. Usually, the consignee (freight forwarders, importers) is the goods’ owner, which puts them in charge of abandoned cargo in the event this occurs.
Freight forwarders have a few options in case they are left with abandoned cargo. They could:
- Destroy the goods
Abandoned Cargo: Disposal Methods
There are many methods of disposing of cargo:
- The consignee should record every item, then inform the port authority. They may then resell the items under the port authority’s supervision while reclaiming the demurrage or detention charge.
- The consignee may return the goods to the consignor if the consignor is listed on the Bill of Lading.
- The consignee can auction the items but must first get permission from the authority.
- The consignee can donate the goods to charity.
- They can destroy the abandoned goods under authority supervision.
Precautions: Handling Abandoned Cargo
Abandoned goods translate to big financial losses for the consignee. As the consignee you must take the proper precautions before you take charge of any goods. Here’s how you can safeguard your interests:
- Know Your Status in Bill of Lading
- Know Every Detail Under Force Majeure
- Stay in Constant Communication With the Goods Receiver
- Inform Importers of the Consequences of Abandonment
- Make Sure Your Goods are Stored in a Bonded Facility
Contact Kickbox Leasing