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Issue 5 2020 - Freight Business Journal Insurance


The problem of uncollected cargo


Peregrine Storrs-Fox of international freight and cargo handling insurer, TT Club, examines the phenomenon and suggests actions to mitigate the risks associated with it.


Uncollected cargo has long been a challenge for many in the global supply chain and remains at the forefront of logistics operators’ minds. Every year, the delay or failure of consignees to collect cargo results in substantial storage, demurrage and detention costs. The issues are complex and require considerable management time to resolve. There are many reasons


why cargo is abandoned, but often the resultant cost and headache lands in the lap of a freight forwarder or logistics


operator. It could


be a problem with the sales contract, such that title to the goods is uncertain. It could be that the consignment is no longer wanted. However, the situation arises, appropriate risk management procedures can be put in place to seek


proactive resolution and minimise liability. TT Club’s experience


has shown that the freight forwarder’s first indication that there is an issue is typically when the shipping line


claims losses, because the forwarder


either is


mentioned as shipper or consignee on the ocean bills of lading or because it arranged the booking. The forwarder may be the only traceable entity – and likely to have liability insurance, which improves the prospects of recovering the costs. While the forwarder should always check the definition of ‘Merchant’ on the ocean bill of lading, typically this is broad and consequently entitles the shipping line legally to demand payment from the forwarder.


Putting adequate


management controls in place will pay dividends. Firstly, it is worth collating data about uncollected cargo hotspots, unreliable customers and commodities most likely to be abandoned. With the problematic trade


routes or areas identified, the commercial and operations departments need to be made aware so that informed decisions can be made about any riskier bookings. Certain socio-political circumstances (such as sanctions) might also influence the level of risk. Having identified potentially


problematic shipments, proactive management can prevent uncollected cargoes. Good record keeping


port of discharge, to seek their support and advice. It is also prudent to keep up to date with developments at destination. Consignees that have


failed


to collect their shipments in a timely fashion in the past are more likely to be repeat offenders; future bookings for the same client should be scrutinised and potentially declined. The most frequent problem


shipments include personal effects, scrap and/or waste (metals/paper), used tyres, used computer equipment and, inevitably,


illegal trades,


such as wildlife trafficking and counterfeit products. As soon as there are


and


management control over shipments in transit are crucial. Maintain electronic systems to monitor arrival dates and the associated free periods. Management information can then be developed to visualise the status of key milestones, such as surrender of bills of lading, as leading indicators of potential issues. If risky business is accepted,


it is advisable to establish early contact with local agents and correspondents at the


indications that collection may be delayed, it is important to react swiftly to minimise potential exposure. With low value commodities, the associated costs can quickly exceed the commercial value, merely increasing the likelihood that the shipment remains uncollected. The shipper and the


consignee need to be contacted immediately, put on notice about the situation, and given a short deadline to collect the goods and settle any costs that have already


Reassurances may be given, but the logistics operator should remain on full alert until the problem has actually been resolved. Formal notification must be sent immediately after the expiry of the ‘free time’ and any provided deadline, explaining the parties’ rights and


obligations under contract of carriage the and/or


other incorporated trading conditions, specifically warning that any further delay or failure to take delivery will result in legal proceedings. If, notwithstanding these


steps, the cargo interests fail to take action, clear instructions must be sought from the customer (often the shipper), such as changing the name of the consignee, modifying the destination of the shipment or arranging the re-export of the goods to the port of loading. It may be that the cargo


accrued.


interests decide to abandon the cargo. Where this occurs, it is prudent to seek letters of abandonment from both the shipper and the consignee, including a clear undertaking that they are jointly and severely responsible for all accrued costs. It will be necessary to arrange an inspection of the


///NEWS


cargo to ascertain its condition and decide whether to dispose of it or hold a salvage sale. The shipper and the consignee should ideally grant clear approval to deal with the shipment; otherwise a court order may be necessary. Once a letter of abandonment on behalf of the cargo interests has been obtained, it should be passed to the relevant authorities prior to proceeding with the destruction or auction of goods. In any negotiations with


cargo interests, take steps to explore options to minimise storage and other costs.


It is


also prudent to ensure that the shipper and the consignee receive regular updates on the breakdown of accrued/ accruing costs. Implementing well-


considered procedures that result in prompt action can prove critical when handling cases of uncollected or abandoned cargo. While these recommendations provide useful general guidance, each case has to be considered on its own merits. Simply put -- be proactive and seek assistance from local experts for specific advice and practical recommendations.


There has been a change in cargo criminal behaviour and tactics during the UK’s recent lockdown, says international freight transport insurer TT Club. According to data from the


Freight Unit of the National Vehicle Crime Intelligence Service (NaVCIS) the restrictions on movement led to an increase in local criminal activity and theſt s from warehouses, something


less frequently experienced up to now, it says. In recent weeks there have been a number of ‘hook-up’ theſt s, whereby entire loaded trailers are stolen from premises - underlining the need for physical barriers, king pin locks, perimeter fencing, CCTV and security guards. Now, as restrictions on movement are liſt ed in the UK,


stakeholders need to be ever more vigilant during what is predicted to be a very active period for cargo theſt . The Freight Unit is part of the


NaVCIS, a national police unit that acts as a bridge between the police and industry.


Diff erent


sections of the service, of which the Freight Unit is one, also handle crime involving ports as well as vehicle fi nance fraud and


TAPA signs up new parking partner


The Transported Asset Protection Association’s (TAPA) has signed up European digital booking platform Bosch Secure Truck Parking as a partner. It has contributed to a 42.9% growth in the Association’s database of secure parking places in the last 12 months. TAPA’s Parking Security


requirement (PSR) industry standard was launched in 2019 and now covers over 6,700 secure parking places at 63 sites across Europe and in South Africa. TAPA hopes shortly to increase this to 15,000. According to estimates, Europe alone has a shortage of 400,000 secure parking spaces for


trucks. Bosch Secure Truck Parking


operates a network of around 50 secure truck parking locations in Austria, Belgium, France, Germany, Luxembourg and the Netherlands with new sites in Romania and Sweden due to be added soon. TAPA has also entered into strategic


a partnership with


the supply chain services and solutions division of standards organisation BSI. It will support the digital transformation of TAPA’s


supply chain Security


Standards audit processes and increase its members’ access to risk management intelligence and


incident data. BSI’s Supply Compliance Manager online


auditing tool


will enable the Association’s independent audit bodies


agricultural machinery. TT Club managing director loss


prevention, Mike Yarwood, said: “This is a great demonstration of the valuable work being undertaken by NaVCIS’s Freight Unit. Unfortunately, the unit would not exist without the continued support and sponsorship of multiple private entities.” He called on all potential stakeholders to support it.


to automate the certifi cation processes for TAPA’s Facility (FSR), Trucking (TSR), Parking (PSR) and Guarding (GSR) Security Standards. TAPA Americas is also evaluating the new tool with a view to future adoption.


BA’s Boeing 747s bow out


It is unlikely that British Airways’ Boeing 747 fl eet will ever fl y commercially again. The carrier – owned by the IAG Group – has confi rmed that it will retire its 31-strong fl eet immediately, instead of in 2024 as originally planned. BA will in future operate only twin-engined types such as the Boeing 777,


Airbus A350 and Boeing 787 Dreamliner. While the latter off er much lower operating costs per seat mile, many in the cargo community will however regret the loss of the 747 with its capacious bellyhold. Virgin Atlantic has also


announced plans to retire its seven 747s.


FTA becomes Logistics UK


The Freight Transport Association (FTA) will change its name to Logistics UK on 27 July. It will however continue to represent the whole sector,


including road, rail, sea, air, retailers and manufacturers. The change of name was planned for earlier in the year but was postponed due to the Covid crisis.


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