Each year thousands of containers are abandoned at ports of discharge worldwide. Statistics show that around 9500 containers receive ‘unclaimed’ status every single day.
The problem of unclaimed cargo drastically affects members of supply chains and international logistics as a whole. If you don’t know how perfectly good cargo gets abandoned by its buyer, read this post where we answer the most frequently asked questions about this problem.
1. What is abandoned/unclaimed cargo?
As per definition by FIATA (Federation of Freight Forwarders Association), abandoned cargo is “the cargo which consignee has manifested no intention to take delivery of after a reasonable period”.
Cargo also becomes unclaimed when the consignee openly declares a refusal to accept it. In some cases, the consignee can’t be identified or located by the carrier at the country of destination.
As to the ‘reasonable period’, it varies from country to country. For example, in the U.S. the consignee has only 15 days to clear the cargo or at least file entry for it. In India, it is 30 days, and in some countries, the authorities are ready to wait for 90 days or more to declare the cargo abandoned.
2. Why does the cargo become abandoned?
The reasons for abandonment are numerous. Here we will list the most common situations:
• The consignee is not satisfied with the quality of the cargo.
• The cargo was damaged during transportation.
• Consignee lacks a trade permit or import license to take the goods.
• The importing company has gone bankrupt.
• Consignee can’t pay import charges due to financial problems.
• The cargo is held by customs due to rules’ violations.
• The delivery was delayed and the buyer doesn’t need it anymore (often happens to holiday shipments).
3. Who is liable for unclaimed goods?
In most cases, the shipper is liable for the unclaimed cargo. However, in recent years the practice of giving freight forwarders the status of Principal instead of Agent has become quite common. In this case, the freight forwarder might be liable for abandoned cargo instead of the actual shipper.
4. What happens to abandoned cargo?
There is only a limited number of solutions for abandoned cargo cases:
• Confiscation of goods and further auction sale.
• Disposal (mostly for perishable, hazardous, and low-value cargo).
• Scrapping for spare parts.
• Re-export by the shipper.
• Re-direction to a new buyer.