TT Talk - Tackling uncollected cargoes


  • Date: 02/02/2007
  • Source: TT Talk 95

Many Members and operators are constantly plagued by uncollected / unclaimed cargoes, which may bring about considerable bills on warehousing, container "demurrage" (i.e. late-return charges), and disposal costs. In the worse situations, it may get the transport operator involved in customs problems. Also on the overall account is the hidden time cost incurred in getting rid of the uncollected shipments.

The Club’s insurance cover and worldwide claims network have long been providing Members protection on those costs which arise due to the consignee’s total failure to collect cargoes. However, this is only second to a system of procedures to avoid and tackle the problem. We would like to offer the following advice:

First and foremost, you should maintain an attended record of shipment accomplishment, especially for sea shipments, making sure that shipments are delivered within the normal transit time. Any outstanding delivery is always on easy checking. One way to this end is to have a system of report on the status of surrendering of bills of lading issued or handled. You should bear in mind that at law, the shipping lines have no duty to notify shipment arrival.

The Club has recognised certain types of "problematic" cargoes. Scraps, resins, and paper wastes to unfamiliar places, are prone to be abandoned. Counterfeit products from time to time are left unclaimed, not because they are not wanted, but because the import " channel" is not organised. If you have experienced problems with particular cargoes, customers, or destinations, you should put your operation and sales on alert.

A shipment is deemed to be "unclaimed" when upon a reasonable period of time (say after the "container demurrage free period"), the intended consignee has manifested no intention to demand for or take delivery. Pro-activity is indispensable in resolving problems, if an unusual late collection has taken place, you should do the following without delay:

(1) Talk to your customers (both the shippers and the intended receivers if known) and demand immediate instructions either to change consignee or destination, or to arrange for re-shipment, or even to abandon it.

(2) Promptly notify the Club or your insurers and prepare for the information showing the details of the cargo and contacts of your destination agent and customers.

(3) Ask your destination branch or agent to keep clear records of all accounts in relation to the unclaimed shipment; inform and update your customers of those charges.

(4) Consult and arrange with your agent for a more economical alternative storage if possible.

It is worth noting that under a bill of lading contract, the shipper at common law retains certain contractual responsibilities even though the shipment has commenced. Those responsibilities include payment for freight and general indemnity to the carrier. Expenses arising from dangerous goods and unclaimed cargoes are covered under the general indemnity, and so it is therefore, the shipper who should be contacted when seeking solutions or redress.

Lastly, do not sell any unclaimed cargo without the approval of your customers or before consulting your insurer. If your customers have agreed to abandon the unclaimed cargoes for your disposal, ask them to put their intention into writing with agreement on full indemnity, and to return to you the original bill of lading.

24 Hour Claims Hotline
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Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

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