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has contracted directly with the carrier and is shown as shipper on the master bill of lading, it has done so as principal, not as agent, and the shipping line will be within its rights to place a claim on the forwarder. Also, it is important in both scenarios for the


Member to have incorporated the BIFA Standard Trading Conditions (STC) into any contracts with its customer because this will give it the legal basis, if correct procedures are followed, for exercising a lien and selling goods to recover costs. At the very start of the process it is important to obtain a letter of abandonment from either the shipper and/or consignee. Also, establish the whereabouts of, and collect together, all relevant documents relating to the shipment. Having reviewed some of the situations that


Abandoned cargoes: an ongoing problem


A look at some of the causes of cargo abandonment and how to protect your company from quay rents and disposal and demurrage charges


BIFA has noted an increase in the number of questions from Members regarding shipments being abandoned. This usually happens at destination, although we have noted a small increase in the UK due to increased Customs inspections looking for under-valued and misdeclared goods. The reasons for abandonment are varied but


one of the most common causes is still the seller and buyer having a commercial disagreement, leading to the latter rejecting the consignment at the destination port. Also, we have seen changes in regulation, often introduced at short notice, prohibiting the importation of certain goods, as well as also regulatory checks identifying non- compliant goods which cannot be imported.


Particular problems Certain trade lanes or types of goods seem to attract particular problems. For instance, waste plastics and similar products cause significant issues because traders still persist in trying to hide non-compliant types of plastic along with compliant products. Dealing with abandoned cargoes can be both


difficult and time-consuming; carriers have whole departments dealing with such situations.


18 The issues usually revolve around who is


responsible for the quay rent and demurrage costs and the disposal of the cargo. As mentioned above, commercial disputes are one reason for cargo being abandoned. Others include the importer ceasing to trade, documentation-related issues, as well as regulatory interventions including customs seizures. One of the most frequent questions we receive


is, who is responsible for the quay rent and demurrage charges should the freight not be collected from the destination port? For FCL consignments, BIFA has long advised its Members to have processes in place to monitor the arrival, clearance and removal of containers from the quay. Using the Merchant Clause incorporated


within the conditions of carriage, carriers will contact those parties named on the master bill of lading who it believes can be identified as a ‘merchant’. If the forwarder has booked the shipment ‘as agent’ of the shipper and this was advised to the carrier via its booking form, email or similar, then the forwarder is likely to have limited or no liability. In such cases, if required, liability insurance cover can be invoked to cover the associated costs. However, if the forwarder


we have heard about, the costs surrounding abandoned cargo can run into many tens of thousands of pounds and, in at least one case, to over £100,000. Our best advice in this situation is to act quickly and contact the carrier, as often it is willing to come to a more commercially viable settlement. At the same time, contact insurers to see the extent of the cover provided.


Expert guidance BIFA has contributed to the recent FIATA publication Demurrage and Detention in Container Shipping, which provides guidance on reducing unnecessary supply chain costs and inefficient behaviour that lead to detention and demurrage charges. The full document can be downloaded from https://fiata.com/media/ documents-for-download.html It is also worth remembering that it might be


possible to remove the goods to a cheaper storage area than the dockside, so this option should be explored. Faced with an abandonment, the three most


common options are to re-export the goods (which may include returning them to the original shipper), to sell the goods to another party, or to destroy them. It is important to identify a party who has local knowledge to assist in dealing with abandoned goods; it will know about the correct procedures to be followed and have local knowledge regarding potential buyers for the goods Although we work in a global industry, the


rules in every country are different and BIFA has been made aware that the UK P&I Club has released a guide that can be searched by country to see how abandoned cargoes are dealt with. The guide can be found at: www.ukpandi.com/knowledge-publications/ publications/cover-service/abandoned-cargo- advice/


March 2020


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