If you are new to Globy, you might not know that it started as a platform specifically for selling unclaimed cargo . We can’t stress enough that unclaimed cargo is one of the most challenging issues in logistics and international trade, and, although our platform has grown into a full-fledged marketplace, unclaimed cargo is still one of our key priorities.

So, today our post is once again devoted to unclaimed, a.k.a. abandoned cargo. We will talk about what unclaimed cargo is and why you should do everything in your power to not let your cargo get this status. We will also discuss a few things you can do to prevent or solve the issue.

What is unclaimed cargo?

We have a detailed post about unclaimed cargo in container shipping, and we recommend you read it too. In short, it is the cargo that the consignee refused to accept due to any of at least a dozen possible reasons. Cargo can become unclaimed even while it’s still on board a ship, but more often than not, the rejection comes after the goods have arrived at the port of destination.

The legal period of time after which the cargo can be considered abandoned differs from country to country, but it is somewhere between three and twelve months. After the waiting period ends, the carrier and local authorities have the right to dispose of the cargo according to the country’s laws. Usually, what happens when cargo goes unclaimed is that the goods are destroyed or sold at a state auction for a fraction of their original price.

Why should you not let your cargo go unclaimed?

You should avoid this situation at all costs because unclaimed cargo is like a rock tugging your business to the ground. Either it’s one container or a batch of them, unclaimed cargo will impose an immense financial burden on your company in the form of lost income, demurrage and storage charges, and fines from customs and port authorities.

Abandoned cargo can result in a lawsuit from the container carrier and get you banned from further using their services. It can also put a spot on your company’s reputation, which is why cargo owners and forwarding companies rather prefer to silently suffer from consequences than admit that they have an unclaimed cargo on their hands.

Last but not least, abandoned cargo can be a huge waste of resources, for example, when perishable goods are left unclaimed. It can also pose a threat to environment and human lives. Take the deadly blast in Beirut in 2020. It was caused by 2,750 tons of ammonium nitrate that had idled in the port for years. Chemicals stored in metal boxes subjected to every weather condition 24/7 are never a good thing.

Anyway, do your best to avoid getting stuck with unclaimed cargo. Although there aren’t many protective measures, you should know about at least three of them that are accessible to most companies.

What to do to prevent the cargo from becoming unclaimed

There are no full-proof methods that will 100% protect your cargo from becoming unclaimed, but here is some useful advice:

Get it in the contract. Include corresponding clauses in your contract outlining conditions concerning cargo abandonment and the consequences the consignee will face if they refuse to take the cargo.
A letter of indemnity (LOI). A letter of indemnity is a legal document that protects both the shipper and the consignee and makes them meet their obligations. If you doubt the buyer, request that they provide an LOI that will either legally oblige them to take the cargo or pay restitution.
A letter of credit (LC). If you are not familiar with the concept, read our post here. Although a letter of credit can’t stop the consignee from abandoning the cargo, it might serve as a motivation not to do it. At least you will get paid for the goods you shipped.

What to do to solve abandoned cargo cases

In cases when containerized cargo is abandoned not due to the quality or state of the goods, there are three things a shipper can do before the cargo accumulates an overwhelming sum of charges:

Surrender for disposal or auction. This is an option that not many companies are willing to take. When you officially agree to the disposal of the cargo or passing it for auction to the authorities, you still have to pay for all the expenses, including demurrage, cargo handling, container cleaning, etc. You also lose money for the goods if you haven’t signed a letter of credit and can’t claim payment on conditions other than cargo acceptance by еру consignee.
Re-export. It’s a process that occurs when the cargo is returned to the port of loading or shipped to another consignee in a different country. It might be a less painful option, but it requires cooperation from the original consignee and extra costs to pay for the fines, port handling charges, and another sea voyage for the goods.
Resell the goods to a new consignee. Of all the choices you can make, this is the best one in every way. Reselling the goods to a new buyer in the country of discharge means no extra shipping costs for you. Yes, you will be required to cover demurrage and storage, but carriers are often willing to provide good discounts, sometimes up to 100%, if that means getting their containers back in rotation and not having to deal with cargo disposal. Thus, you get to retain at least some money for the cargo, minimize the damage, and stay on good terms with the carrier.
And you are already in the right place to sell unclaimed cargo. If you ever find yourself in this predicament, immediately set the cargo on sale in the Unclaimed Cargo section on our website. Don’t waste time and use the platform as a backup plan, even if there’s still hope the consignee will take the goods.

Whatever option you choose, act fast. Don’t wait for the problem to just dissolve on its own, because the situation will get worse with every day the cargo idles at the port. Choose your buyers carefully and turn to Globy whenever you need it. We hope this helps!

Why you should never let your cargo become unclaimed

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