People who are not very well acquainted with the cargo shipping process usually think the only reason for somebody to refuse a full container of goods is that the goods are of bad quality, spoiled, or damaged.
In many instances this is not the case. There are numerous reasons why a perfectly fine cargo can become abandoned even when the buyer has already paid for the goods.
Let’s name just a few:
· Seasonal cargo arriving late
· Buyer’s company going bankrupt
· Demurrage charges exceeding the cost of goods
· Unfair business practices, etc.
As a result of these and other unfortunate events, the cargo ends up idling in the port for months and even years. But it can’t stay there forever.
So what happens when the cargo officially becomes abandoned (unclaimed)?
Depending on the legislation of the country of destination, the cargo can be declared abandoned after 3 to 12 months of it being stored at the port with no explicit intention from the consignee to take the delivery.
During this whole period, shipping lines bombard both the shipper and consignee with final notices in an attempt to urge them to pay demurrage and empty the containers. Neither port authorities nor shipping lines enjoy dealing with abandoned cargo, so they rarely act immediately, hoping the shipper or consignee will sort it out. At last, when all requests and threats prove to be useless, comes the point where the carrier has to act on the matter. And there are not many options available.
Once again, depending on the legislation and the line’s rules, the cargo can be:
· Sent back to the shipper under the re-export procedure
· Sold at state auction
· Destroyed by a specially hired contractor
All this might not sound that hard to do, but there are so many nuances to each procedure that it gives people a nervous breakdown. Maritime law is quite strict about what belongs to whom and who can dispose of the goods.
So what happens to the abandoned cargo depends on whether the line has obtained official letters of abandonment and originals of the bills of lading, whether the cargo is dangerous or not, whether it’s still in good condition, and so on.
Re-export
Re-export is a logistics equivalent of ‘return to sender,’ but it takes endless correspondence and agreements between the line, the port authorities, and the shipper.
At least this way the owner can get the goods back or resell them to another buyer if the cargo is still in good condition. Of course, in this case there are charges and freight to be paid. To constant clients with good volumes, shipping lines can grant considerable discounts just to solve the problem.
State Auctions
State auctions will also require numerous confirmations, letters of abandonment, and legal procedures to be fulfilled and fines to be paid. However, if the cargo is past the point where it’s officially considered abandoned by state legislation, the goods can be auctioned without the owner’s consent. No matter how it goes, the cargo owner will not see a dime from the money paid for their goods at the auction.
Destruction
There’s not much to say about this method of disposal, but that it’s not always physically and legally possible. Some countries don’t have facilities or contractors to dispose of specific dangerous goods and chemicals; others don’t allow it due to ecological reasons.
If this is the case, the goods can be transported to the place of destruction at the shipper’s cost or stay at the port indefinitely until something bad happens. Like the dreadful disaster at Chittagong port in June of 2022.
A better alternative
The least painful method to solve the problem with abandoned cargo is to resell it to a new buyer ASAP. But the search for a new buyer might take you a lot of effort and time. On Globy, buyers will find you themselves. You just have to put your cargo on sale and wait for inquiries from potential buyers.
Just imagine how much energy you’ll save. Less bickering with the line, less tedious correspondence, less demurrage, and less financial damage to your business.
At least try it as your first option if abandoned cargo ever happens to you, because the other ones don’t look that great anyway.
