Uncollected cargo: Risks and mitigation strategies for freight forwarders

Uncollected cargo is a perennial challenge for freight forwarders and MVOCC operators, resulting in considerable costs and potential damage to commercial relationships. This article explores the risks, red flags, and mitigation strategies to manage incidents of uncollected cargo.

Identifying potential risks

Red flags that may indicate potential risks of uncollected cargo include:

1. Problematic trade routes or areas with frequent uncollected cargo incidents
2. Non-reliable customers or commodities likely to be abandoned (e.g., personal effects, scrap metals, used tyres, counterfeit goods)
3. Shippers with few material assets or unfinalised sales of cargo

Preventive measures

To minimise the risks of uncollected cargo, freight forwarders should:

1. Implement management controls to identify and scrutinise risky shipments
2. Establish early contact with local agents and correspondents at the port of discharge
3. Be aware of socio-political circumstances influencing risk levels in certain jurisdictions
4. Decline or allocate additional operational attention to high-risk shipments

Early intervention

If a cargo is deemed at risk of remaining uncollected, immediate action should be taken:

1. Contact the shipper and consignee to clear the cargo and settle outstanding charges
2. Provide formal notification explaining rights, obligations, and potential legal proceedings
3. Seek clear instructions from the customer (e.g., changing consignee, re-exporting goods)
4. Explore options to minimise storage and other costs

Escalation steps

If the cargo remains uncollected despite efforts, escalation steps should be taken:

1. Issue a second formal notice within 45 days of discharge
2. Issue a final notice within 3-6 months of discharge
3. Notify relevant port authorities to request necessary measures (e.g., sale or disposal)

Abandonment and disposal

If the cargo interests decide to abandon the cargo, freight forwarders should:

1. Secure letters of abandonment and indemnity from the shipper and consignee
2. Arrange inspections and obtain approvals for disposal or salvage sale
3. Obtain a court order if necessary
4. Request authorities to allocate a date for disposal or auction

Final considerations

Freight forwarders should be mindful of jurisdictional challenges and consider obtaining local legal opinions to protect their business. Implementing proactive management controls, seeking assistance from experts, and taking immediate action is crucial in handling cases of uncollected or abandoned cargo.