How does Abandoned Cargo Impact Exporters?

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Every exporter dreads the moment they learn their shipment has been abandoned at the destination port. This frustrating situation leaves everyone scrambling, but it hits exporters especially hard. The definition of “abandoned” can differ depending on Port of Destination. Some countries consider cargo abandoned after 30 days, while others wait 90 days. So, how does abandoned cargo happen, and why should you care as an exporter?

Why Cargo Gets Abandoned

There are several reasons why cargo gets abandoned. Sometimes, it’s due to issues with the shipment itself. Perishable goods like fresh produce can spoil during long transit delays, making them worthless to the receiver. Similarly, damaged cargo may not be worth the hassle of claiming, especially for small importers.

But often, the problem lies with the receiver themself. They might face unexpected market changes that make the goods unprofitable. Fearing financial loss, they simply ignore the arrival notice, leaving the container to rack up storage fees.

The Legal Burden on Exporters

Here’s where things get tricky for exporters. Every shipping company’s Bill of Lading (BL) includes a clause that holds both the shipper and receiver responsible for any costs incurred by the carrier.

In simple terms, if the receiver disappears, you, the shipper, are legally on the hook for the following:

Cargo Disposal: If the abandoned goods can’t be salvaged, they might need to be destroyed.
Detention and Demurrage: These are charges for keeping the container at the port longer than its allotted time. The longer it sits, the more you pay.
Local Charges: Additional fees can pile up for things like customs clearance, port security, and even basic storage.

These costs can quickly eat into your profits and turn a successful shipment into a financial nightmare.

How to Protect Yourself

There’s no guaranteed solution, but here are some proactive steps to minimize the risk:

Know Your Buyer: Research the receiver’s reputation. Talk to industry contacts and check to ensure they’re a reliable business partner.
Upfront Payment: Consider requiring a deposit (like 40-60%) before shipment. This shows the buyer’s commitment and reduces the risk of them abandoning the cargo.
Know Your KYC: KYC stands for “Know Your Customer.” Gather proper documentation and verify the receiver’s legitimacy before entering any agreements.
Negotiate a Plan: If faced with an abandoned cargo situation, act quickly. Present evidence of your due diligence (KYC) to the shipping line and work with them to develop a plan to minimize losses. This could involve selling the cargo at auction or returning it to you (if possible).
Don’t Stay Silent: Communication is key. Stay informed about the status of your shipment and proactively address any potential issues with the receiver.

Abandoned cargo is a real threat, but with careful planning and proactive measures, you can significantly reduce your risk. And if your cargo gets damaged during transport, be sure to file a claim against the liable carrier as soon as possible. Cargo claims recovery can help offset some of the financial losses associated with damaged goods which can lead to cargo abandonment.

Recoupex is a hub of transport lawyers – experts in cargo claims. We assess your case quickly. We have successfully recovered claims from Maersk, Sealand, Hapag-Lloyd, Mediterranean Shipping Company – MSC, CMA CGM, and other carriers.

SUBMIT A CLAIM NOW!