Policy & Compliance
Containers abandoned overseas: the charges you may face
BIFA Members continue to be surprised to receive demands for demurrage and quay rent from shipping lines when cargo is abandoned. How can forwarders minimise their risks?
O ne of the most frequent questions that BIFA receives regarding problems on maritime shipments is about export containers that are sitting at overseas ports unclaimed or abandoned. This sort of enquiry is particularly prevalent when there is an economic downturn or other market turbulence. Often the BIFA Member has closed the file with the goods shipped and carriage paid, and is surprised and concerned to receive a demand for demurrage and quay rent from the shipping line. Misunderstanding Often Members say: “But I am only an agent” or “but my name is not on the bill of lading”. We also see a variety of phrases such as “acting as an agent only” on pre-printed forwarder bills of lading, or similar wording as footers on correspondence issued by BIFA Members. Whilst in general terms anyone who undertakes a task for another could be called an agent, in law it is not what you say you are, but what you do that defines the role that you perform. Although some BIFA Members act as an agent on occasion, the majority of transactions that occur are where a freight forwarder buys
space from a shipping line or airline at one price and sells this on from its own tariff. In this scenario, the freight forwarder is a principal. If there is a later problem, for example, if the goods are not collected at the destination, then the shipping line will look to the freight forwarder for quay rent, etc, as the party it contracted with. Another issue is that if you have goods sitting overseas and neither the shipper nor the consignee can be contacted, you cannot always simply abandon the cargo. The shipping line will sometimes take a lien if the commodity is something that can be sold on easily. However, many commodities need specialist handling and in these instances the shipping line will look to the contracting party, the forwarder, for payment of such charges. It is impossible to safeguard against getting into this sort of situation if your file has been closed and the consignee does not take delivery at destination. The shipper, as your customer, has indemnified you against such outgoings under the BIFA Standard Trading Conditions (Clause 10) and is liable for such costs, but if they have ceased trading or simply gone away without trace, you as the forwarder, may find yourself liable for the unpaid charges.
Whilst BIFA Members will have to make their own commercial decisions, it is noteworthy that there appears to be a higher incidence of problems with one-off shippers, or where cargo is consigned to an agent where the Member has not previously had a trading relationship. It is less likely that consignments from a regular shipper to a regular consignee will cause a problem. However, if you have concerns regarding the standing of your customer, it is suggested that Members have office procedures to monitor shipped files or keep a log of when goods have been discharged overseas, which we understand may be difficult. Frequent comment One frequent comment from Members who find themselves in this situation is: “We thought that it would be alright as they had paid all the other charges up front.” Given freight rate volatility, it only needs a relatively short delay for quay rent and demurrage charges to accrue making the shipment no longer commercially viable. Having looked at the enquiries that we have received on this matter, the main commodities involved include scrap materials, personal effects and charity goods,
16 | December 2023
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