Issue 4 2021 - Freight Business Journal Insurance

Abandoned cargo - more than just money at stake

The risk of abandoned cargo is hardly new; delays or failure to collect cargo costs the industry

and money. But now it’s costing lives. Peregrine Storrs-Fox

significant from TT

Last August, stored ammonium nitrate fertiliser exploded at Beirut port in Lebanon,

killing more than

200 people, injuring 6,500 and devastating parts of the city. The dangerous stockpile had been neglected for years. In the aftermath of the deadly blast, port authorities revealed that another 50 abandoned containers filled with hazardous chemicals had been discovered in an open storage yard where they had been languishing for over a decade. Abandoned cargo is not a

new challenge. Every year delivery delay or failure of the consignee to collect cargo results in substantial storage

>> 12

is faced with a reduction of

volumes on basic trades on the other hand.” During the last year, Cuxport

has had the chance to generate deep sea ro ro vessel traffic and the market is now demanding

time Club

pinpoints the warning signs and suggests actions to avoid it.

and container demurrage and detention costs. These issues are also invariably complex and require expensive management time to resolve. There may be no legal or contractual way to escape liability or recover the costs associated with abandoned cargo, including container demurrage, port storage, disposal costs or fines. As a result, learning how

to identify risks early to help mitigate the inevitable fallout is key. Commonly, TT Club recommends establishing effective due diligence procedures and developing specific processes to identify suspect shipments in order to stay one step ahead.

a certain amount of additional port capacity for vehicle manufacturers and their shipping line partners. Cuxport has plenty of space

on its piers 1 to 4, which offer up to 15 metres draſt, so all that is required is to increase storage

Early detection and proactive management reduce losses. However, in the complex logistics supply chain, things are not always straightforward; while sales pressures should be managed, relationships with partner operators may dictate tolerating certain bookings where assurances are less present. The simple lesson is that all bookings should be subject to deliberate business decision-making – and procedures should be crystal clear on how to handle all exceptions. Adequate advance consideration will lead to an informed commercial decision to decline the booking or allocate additional operational attention to the shipment. There are many reasons

why cargo may be abandoned at some point in the supply chain and understanding what they are should offer some protection. Most commonly, goods are abandoned at the destination port. Management controls are required to identify problematic commodities, routings and destinations. Other red flags may include uncertainties concerning the nature of the shipper or sanctions issues. Certain commodities present more risk – and may

facilities close to the port area. One other change that has

come about as the result of Brexit is that routing of BMW Mini UK production has been changed from Zeebrügge to Cuxhaven for Germany and further European markets. An import compound

be influenced by geographical or seasonal conditions. Being alert

at the outset of the

booking process may reduce exposure. Experience will help you complete the list, but commodities commonly presenting higher risk include waste of all kinds including fabric, paper and wood; scrap (metals, plastics and wood); cargoes intended for recycling (often waste shipments with an alternate descriptor); used computer equipment; used tyres; and personal effects. While the reasons for cargo

going uncollected vary, most are relatively low value, high volume and often not newly manufactured. It is important to recognise that declarations may also be fraudulent. Dangerous goods screening checks are equally critical. Similarly, be alert to the

risks presented by counterfeit, non-compliant and prohibited goods. Inevitably, identifying such shipments, and the criminals who are seeking to exploit legitimate transport operations, is difficult. It is likely that the goods will not be declared accurately in order to conceal illicit trade or to disguise the hazards presented. Knowing your shipper is fundamental in identifying

has been introduced an

arrangements made for onward logistics by truck or rail. South Korean logistics provider Glovis

Europe has

also nominated Cuxport as its terminal and compound provider.

heightened risks. Not all cases of abandoned cargo involve a shipper who intentionally seeks to deceive, but conducting careful due diligence will pay dividends. The reliability of the shipper is an important consideration in assessing any heightened risk. Consider the routing of

the cargo being presented for shipment and develop knowledge of the usual trade routes for certain commodities. The underlying sales

contract will not usually be visible to the freight operator, but its terms could point to a reason for abandoned cargo. Be alert to factors that may indicate potential problems, not just where cargo is “shipped to the order of” but also changes in economic or market conditions. As with many troublesome

issues, the reality is that uncollected shipped goods affects a small fraction of transactions, although it will have a disproportionate impact on time, distraction and cost. Whatever the cause – be it mistake,

fraud, insolvency

or fiscal issues – the lesson of Beirut sadly needs to be learned the world over. TT has been involved in other instances where dangerous goods have languished in


terminals until their hazards were exposed. Even amongst sophisticated

and well-ordered operations, it has been known for regulated dangerous consignments to simply get ‘lost’ in the system. There is no room for complacency, particularly in places with extreme seasonal temperatures. Ongoing, routine physical checks of the yard remain necessary adjuncts to technology. Emergency planning can

be woefully inadequate. Ports and

terminals need well-

considered relationships with local fire and rescue services. This means thinking about access to safety information, considering training and equipment requirements for collaborative emergency response, as well as designating ‘hospital’ areas for distressed cargo. For example, in one instance emergency services forbade access to a container without breathing apparatus, but fire officers did not know how to operate the reach stacker.

Clarity on ‘incident

control’ required operational information about the cargo, site and equipment. A simple lesson – leave

nothing to assumption; preparation and practice are key.

News Roundup

DB Cargo has been awarded £470,000 from the Government’s Port Infrastructure Fund to create a new customs approved area at its Barking terminal in East London. It will include a new inspection warehouse, along with offices and facilities and a new secure storage area.

Road & Rail

US-owned forwarder CH Robinson is to buy Benelux region operator Combinex Holding. The former’s president of Europe, Jeroen Eijsink described it as “a great opportunity for CH Robinson and will strengthen our existing

footprint in Europe, particularly our presence in Western Europe. “Combinex will also offer us

additional haul capabilities with a dedicated fleet, expanding our reach in the short-medium haul market.’’

End to end excitement at Bullet Express

Scottish logistics company Bullet Express says the 3.5 miles of pallet racking at its new storage site would be stretch to George Square in Glasgow city centre, if laid out end to end. Made by Spanish specialist, AR Racking, and installed by local

installation experts, Rackit, the shelving is fully operational only two months aſter Bullet Express received the keys to the building, which can hold 5,000 pallets. Bullet has seen a 40% rise in

online shopping due to Covid lockdowns.


Combinex founder and chief Arie Troost


“Combining our diversified, loyal client base, reliable


of transporters and dedicated fleet and owned trailers with CH Robinson’s scale and expertise,

will allow us to provide even

better services to our customers.” The announcement follows CH

Robinson acquisitions in 2019 of Italian-based road specialist Dema Services and Spanish forwarder Space Cargo.

Direct Rail Services (DRS), along with its fellow Nuclear Decommissioning Authority, (NDA) transport subsidiaries, is to become part of a new Nuclear Transport Solutions (NTS) division. NTS will operate DRS and Pacific Nuclear Transport but its primary objective will be to support the NDA in cleaning up the UK’s earliest civil nuclear sites. Although DRS has its roots in the rail transport of nuclear material, it is perhaps best known in the industry as a general (non- nuclear) intermodal operator including the ‘Tesco trains’ between the north and south of the country.

Rail Freight Group has appointed Phil Smart as its new assistant policy manager. He will work closely with director- general Maggie Simpson and play a key role in RFG’s engagement with regional and national government as well as helping members disseminate complex transport strategy.

MSC has launched an intermodal service between Asia and Europe. It will combine sea and rail service from China, Korea and Japan to Europe, via Vladivostok and Vostochniy with further sea feeder connections from St Petersburg to major European hubs such as Antwerp, Bremerhaven, Rotterdam and Le Havre.

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