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What should I do if the cargo arrives at the port, but the customer does not pick up the cargo, it is returned and auctioned off?

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Case 1

After the cargo arrived at the port, the customer did not pick up the cargo and the shipping company requested to return the cargo and made us bear all the costs.

Two shipments went out to Port Klang, Malaysia at the end of July 2019, and the two shipments arrived separately in mid-August, but the customer did not go to pick up the goods until mid-September. Before the goods arrived at the port, we had reminded the customer that the goods were about to arrive at the port, and after they arrived at the port, we reminded the customer to pick up the goods.

In mid-August, the freight forwarder told me that the customer still had not picked up the goods. I kept urging the customer to pick up the goods, and each time the customer said he would pick up the goods on the same day, but he did not go until mid-September. The customer did not communicate with us for what reason he did not pick up the goods but always said “I will pick up the goods today”.

At that time, the consolidation company was impatient and gave us an ultimatum, asking us to notify the customer one last time, if the customer still did not go to pick up the goods, we had to return the goods to us, and the demurrage and other costs incurred, we had to pay.

Analytical Recommendations

If the foreign customer company closed down or the goods arrive at the port after a delay in picking up the goods, to the port for more than a month, resulting in a lot of costs, the customer obviously will not pick up the goods, we asked the freight forwarder to explain to the shipping company that we abandoned the goods, but the freight forwarder said at least six months to abandon the goods.

Then the question arises, after six months the port costs are estimated to be astronomical, which the domestic factory certainly can not afford. The value of the goods is also very low, and the future cost is certainly much more than the value of the goods auctioned. The specific problems are as follows.

  1. the shipping company will be with the recovery of these demurrage, demurrage, terminal charges?
  2. is the recourse to freight forwarders or foreign customers or domestic factories?
  3. if not paid, the shipping company they will take legal proceedings?

Then, how to deal with the export of foreign abandoned goods?

  1. Active abandonment of goods.

First of all, you should let your freight forwarder find the destination port agent to help, first change the consignee to the designated agent, and then abandon the goods in the name of the agent. Why do you want this? Because if you do not change the consignee, the consignor unilaterally should be very difficult to abandon the goods. But after this change, the agent of the destination port will have to bear a lot of responsibility, including the cost and responsibility of abandoning the goods to be borne by them, the conditions must be negotiated with the freight forwarder, whether they are willing to help you do so, do you need to bear the cost of how much.

  1. resell.

See if you can find other buyers in the destination country, change the bill of lading consignee, and then sell to them, of course, must be discounted. Doing so also has great constraints, one is that the product is not a custom-made bad resale, the other is to find a customer willing to take over.

  1. ignore.

Then you do not care about anything, the responsibility of the cost of all let your freight forwarder to carry. This is the most pitiful, perhaps you are fine, but the freight forwarder who took your ticket salesman and the company will be big bad luck, the key is that this is not the responsibility of others. Of course, the other party may also be with you in a lawsuit, then there will be ripped. According to maritime law 86-88, the consignee has a problem, the consignor must be looking for the cost.

  1. return shipping.

Can be returned to the domestic bonded warehouse, if there is a new order in the original goods sent abroad or in a bonded warehouse with testing and repair, replacement of packaging bonded processing for a simple change of packaging, re-labeling, replacement of the shell, and other simple processing to new orders sent abroad. Bonded areas are equivalent to foreign countries, the return of goods to the bonded area testing and repair does not require import declarations, so no need to apply to the Customs return of goods, no tax, no need to pay a deposit to the Customs.

Domestic export goods, especially electronic products, small household appliances, the repair rate is high, the traditional way of return to the factory repair needs to face customs, commodity inspection, state tax, and other cumbersome procedures, the use of bonded areas within the advantages of the customers can quickly solve the problem of repair.

The bonded zone has the policy of “in-country customs”, that is, within the country, but not the domestic customs jurisdiction, the goods from the domestic into the bonded zone is equal to exports, from the bonded zone into the domestic imports (to declare import customs), the status and Hong Kong, China.

Therefore, the return of goods from abroad to the bonded zone is still equal to the goods that remain abroad, have not been declared for import, so there is no need to apply to the customs return of goods, and return to the bonded zone tax-free, can be re-exported.

The following we analyze the advantages of the return of bonded warehouses warehousing rework:

a. Simple procedures: free of deposit, duty-free, levy-free, free of commodity inspection, free of customs clearance, only need to provide the packaging, a number of pieces, amount, net gross weight to our company, you can QP system to apply for entry into the district maintenance record into the district maintenance.

b. Fast timing: After the goods arrive at the Hong Kong/Shenzhen wharf, we can arrange transportation to pick up the container and pull it back to the bonded warehouse for maintenance the next day, workers do not need a visa to enter the zone for maintenance, free access to the processing zone, and then re-export from Hong Kong or Shenzhen after maintenance.

c. Low cost: the cost of workers and maintenance site costs are much lower than Hong Kong or foreign maintenance.

Case 2

The customer went bankrupt, the creditor took control of the goods, freight forwarder demanded a storage fee

We have a batch of goods with the customer to do CFR, the goods arrived at the port last July, because of the customer bankruptcy, disputes with creditors, the goods have been unable to extract, our payment for the goods has been received in full, but the destination port agent to our domestic agent request, demand storage, demurrage, and other costs, and our agent to charge us these costs. The domestic agent has our export tax rebate documents in hand, according to which the other party will not deliver the documents and will declare the tax rebate soon, and this matter is still unresolved and tricky. Now the foreign agent threatens to auction the goods, do they have the right to do so? What is right or wrong in the law in this matter?

Analytical Recommendations

Analysis.

First of all, it is clear that you, as a SHIPPER, do have the obligation to pay the storage fees of the goods (is the second responsible person, as long as CONSINEE does not pay, you have to pay); Second, the ownership of the goods is to CONSINEE after the arrival of the port.

Second, after the arrival of the goods, the ownership of the goods is to CONSINEE, to abandon the goods should also be written by CONSINEE before the turn of SHIPPER to write a written statement.

Third, there is no law to support the freight forwarder can withhold your checklist, as long as to the court, this point they must lose the case;

Fourth, the goods in the terminal after a certain amount of storage fees, the other port does have the right to auction the goods, but the proceeds of the auction is first paid after the storage costs before paying other creditors. (Of course, if the auction proceeds are not enough to pay the storage fees, SHIPPER and CONSINEE is obliged to make up.)

Finally, if it is true, as you say, that the goods have been controlled by the customer’s creditor, then it is that creditor who should pay the warehouse rent as CONSINEE’s principal. (Theoretically, your customer as CONSINEE, without first receiving the goods, his creditors are not entitled to control the goods, and if he has received the goods, then the owner of the goods is him and not you, of course, may be different from the laws of different countries, then only your customer to know how the local law)

Suggestions:

How to return the goods to the port after the customer does not pay or to sell others?

Most countries in the world have this provision, when the imported goods arrive at the port, the jurisdiction of the goods will be transitioned to the customs, customs in order to protect the interests of buyers, will not allow anyone other than the consignee to move the goods.

This creates a big problem for the seller, when the seller fails to collect all the money for the goods and wants to control the right of the goods, only to find that he may face the money and the goods are empty.

This is because whether you want to return the shipment or resell it, you must have either of the following two conditions.

An abandonment statement from the original consignee.

The original consignee clearly informs the seller of the refusal to pay for the goods!

So, some buyers will keep dragging their feet and will never say they will not pay, so you can not catch the evidence, abandonment statement? Don’t even think about it!

So, the seller can only watch the time fade day by day until the goods are auctioned by customs!

So I gave two methods.

  1. find a very strong freight forwarder, I mean the destination port freight forwarder, they can help solve some problems, I have friends who have successfully solved the problem of Turkish goods.
  2. looking for counsellors, some people have been successful, but most, almost can not contact.

In fact, these are all dead horses, because there is almost no more hands-on method.

However, today I want to tell you the good news that there is another method that has been proven to work in practice.

I have advised a friend in the contract to write a paragraph like this.

This contract payment method is to see a copy of the bill of lading to pay the balance. If the buyer (specific name) in seeing the bill of lading copy within 10 days has not paid the balance, the buyer is deemed to voluntarily give up the right to goods, the buyer agreed to shipper independent disposal of goods.

Alternatively.

If the buyer (specific name) has not paid in full within 10 days of seeing the copy of the bill of lading, the clause is automatically activated: the buyer (specific name) voluntarily waives the right to dispose of the ticket, and the shipper is free to dispose of it, either by returning it or re-selling it to any other third party!

Remember, the customer must be required to sign back!

Many people will say, how will the customer sign it?

If the customer is a serious businessman, not intentionally cheating you, he will definitely sign, because this is the normal terms of the contract, without harming any of the interests of the customer.

So, when the customer never paid for the goods, the contract worked, and the friend gave the contract to the local agent, who showed it to the customs, and the Turkish customs released it.

I don’t know if all customs will approve this contract model, but since there is a hope of success should go to 100%.

Some people may say, why do see the bill of lading copy payment? Do 100% before TT is not good? Who does not want to do risk-free business, if you can do before TT who also do what to see the bill of lading copy payment, who also do letters of credit, who also do DP, or even OA it?

Competition, there is nothing we can do about it! It is like a big brother commented that I have a minion face because I said first to express, and then ask questions, because I said that even if the customer’s information is not complete, but also to pass the value of the first, and then ask the specific configuration, if the minimum foreign trade business work is also considered a minion face, then accept this non-TT payment method is not also a minion face?

Adhere to their own, only do before TT; adhere to their own, only do high value; adhere to their own, waiting for customers to take the initiative to hook, they definitely do not take the initiative! Perhaps this is the real hero, but I can not do now, in addition to individual top masters, how many people can do it?

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Business Director at Shanghai Fumao Clothing Co.,LTD

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