由 caicai8478 In international trade, when goods arrive at the port of destination and the consignee refuses to take delivery for various reasons, and the shipper is unable to properly handle the goods, the goods face abandonment or even forced destruction. This not only means a loss of capital but also triggers a series of serious financial and legal risks. Understanding and mitigating the risk of abandoned goods is essential for every import and export company.
I. Why Are Goods Abandoned and Destroyed? — Analysis of the Main Causes
The causes of abandoned goods are often the result of a combination of factors, which can be categorized as follows:
Commercial Disputes and Market Changes:
Trade Disputes: The quality, specifications, or quantity of goods do not conform to the contract, and the buyer and seller cannot reach a settlement.
Customer Abandonment/Bankruptcy: The buyer abandons the goods due to declining market conditions, a broken capital chain, or simply malicious intent.
Excessive Port of Destination Fees: The combined cost of demurrage, container charges, and storage fees can exceed the value of the goods, making them prohibitive for the consignee.
Document and Customs Clearance Issues:
Document Discrepancies or Insufficiency: Key customs clearance documents such as certificates of origin, test reports, and import licenses are missing.
Underdeclaration or Product Misdescription: Underdeclaring the value of goods to evade customs duties leads to hefty fines upon customs seizure, resulting in increased cargo handling costs.
Intellectual Property Infringement: Goods suspected of infringing local brands or patents are detained by customs.
Product and Compliance Issues:
Goods Damaged or Deteriorated: Damage during transportation, or expired or deteriorated food, chemicals, etc., losing their commercial value.
Non-Compliance with Destination Country Standards: Failure to pass local quality inspection, safety, or environmental certifications (such as CE, FCC, and FDA).
Prohibited/Restricted Imports: Goods prohibited or restricted by the destination country prevent customs clearance.
Internal Issues of the Shipper:
Market Misjudgment: Misjudgment of target market demand leads to goods being unsaleable.
Lack of Risk Awareness: Failure to implement strict payment terms for new customers or customers in high-risk regions.
II. The Significant Risks and Consequences of Abandonment and Destruction
Abandonment is more than just a matter of “letting go.” Its consequences are long-lasting and multifaceted.
- Risks for the Shipper (Exporter):
Direct Economic Losses:
Total Loss of Goods: The total cost of the goods, the initial transportation costs, and the insurance premiums are lost.
High Port of Destination Charges: The shipper is responsible for all demurrage, container charges, and storage fees incurred at the port of destination. These costs accrue daily, snowballing.
Destruction Costs: In most cases, the cargo owner (shipper) must bear the cost of destruction services designated by the port or customs.
Legal and Credit Risks:
Primary Liability: As the shipper listed on the bill of lading, the shipping company/freight forwarder will first pursue all outstanding charges from the shipper.
Impact on Corporate Credit: Shippers with a long history of abandonment may be designated as “high-risk customers” by shipping companies, and future bookings may face stricter scrutiny or require a deposit.
Litigation by freight forwarders/shipping companies: Refusing to pay the relevant fees may result in lawsuits in China or the destination country.
Operational and reputational risks:
Diversion of attention: Dealing with abandoned cargo is time-consuming and labor-intensive, requiring repeated communication with multiple parties.
Supply chain disruption: This diverts funds and energy, impacting the production and shipment of subsequent orders.
- Risks to consignees (importers):
Loss of deposits/payments: Often, deposits or partial payments paid cannot be recovered.
Damage to business reputation: Loss of credibility within the industry can make it difficult to find reliable suppliers in the future.
Risk of being pursued: In certain circumstances (such as as a contract shipper), you may be pursued for related fees.
III. Core Mitigation and Response Strategies
To address the risk of abandoned cargo, prevention is key, supplemented by effective contingency plans.
A. Preventive Strategies (Preventing problems before they occur)
Strict customer credit management and payment methods:
Conducting credit checks: For new customers or customers of unknown creditworthiness, background and credit checks must be conducted by a professional agency.
Use secure payment methods: Prefer letter of credit (L/C) or T/T (prepayment in advance). For clients with average creditworthiness, avoid high-risk methods such as DP (Documents against Payment) or OA (Open Account).
Increase the deposit ratio: Increase the prepayment ratio to ensure that even if the customer abandons the goods, the majority of the costs are covered.
Clear contract terms:
Specify in the sales contract that “if the goods are abandoned due to the buyer’s fault, all port of destination charges, return shipping costs, and losses will be borne by the buyer.”
Comprehensive compliance and document preparation:
Understand the regulations of the destination country: Before exporting, fully understand the customs policies, certification requirements, and import restrictions of the destination port.
Ensure documentation is accurate and complete: Strictly review all customs clearance documents to ensure consistency between the documents and the goods.
Comply with declarations: Accurately declare the value and product name of the goods to avoid penalties and detentions due to issues such as under-declaration.
Prudent transportation and insurance arrangements:
Purchase adequate insurance: Purchase all-risk insurance to cover the risk of damage during transportation.
Work with a reliable freight forwarder: Choose an experienced freight forwarder with a strong agent network at the destination port, who can provide local support should issues arise.
B. In-Process Response and Disposal Strategies (Crisis Management)
If there are signs of cargo abandonment, immediately activate the emergency plan to minimize losses.
Communicate and confirm immediately:
Immediately communicate with the consignee to understand the true reason for the rejection and attempt to negotiate a solution (such as a discount or compensation).
Consult the destination agent to obtain an accurate breakdown of costs and remaining free storage time.
Evaluate and make decisive decisions:
After obtaining all the information, quickly evaluate the cost and feasibility of the following options and make a decision:
Option 1: Resell or Dispose Locally
Action: Find other local buyers through the destination agent, or resell to a third party at a salvage value.
Applicable scenarios: The cargo is intact, but the destination port charges are already high; the cargo is of general use.
Advantages: Stop losses quickly and avoid further accumulating costs.
Option 2: Return
Action: Arrange for the goods to be shipped back to the port of departure.
Suitable Scenarios: The goods are of high value, and the return cost + destination port charges are less than the value of the goods.
Disadvantages: High costs (round-trip freight + destination port charges + departure port charges) and complicated customs clearance procedures for return shipments. Note: Many countries have strict regulations regarding return shipments, requiring approval from the customs office at the original port of shipment.
Option 3: Destruction
Action: Apply to customs for the destruction of the goods.
Suitable Scenarios: The goods are of low value, have deteriorated or are damaged, and the return/resale cost exceeds the goods’ residual value.
Advantages: Completely resolves the matter and prevents further costs.
Key: Obtain a “Certificate of Destruction” from customs or the shipping company and settle all charges to prove that all liability has been met and avoid future claims.
Avoid “Ignoring” the matter:
The worst strategy is to pretend nothing happened. Fees at the port of destination will continue to accumulate, and shipping companies will eventually pursue claims from shippers through their agents at the port of departure, potentially seeking legal action, which would in turn lead to even greater losses.
Conclusion
Cargo abandonment in international logistics is a no-win game. For businesses, risk management must be prioritized. Through rigorous customer screening, secure settlement methods, and comprehensive document management, most risks of cargo abandonment can be eliminated at the source. Once a risk occurs, transparency and swift response are crucial. Before the cost snowballs at the port of destination, decisively choosing the least-cost option—reselling, returning, or destroying the cargo—and completing all necessary procedures is crucial to maximize protection of your interests.