In recent months we have seen significant changes in the industry regarding idle cargo and penalties. In years past, idle cargo could sit unnoticed indefinitely, but that is no longer the case. Technology has caught up with us! Carriers and terminals all over the world are more connected and have better controls in place to monitor shipments. Technology also enables them to readily calculate their lost revenues and added costs related to idle cargo.
Previously, we have received warm welcomes from steamship lines who were eager to play a part in charitable shipments, as well as generous assistance from them in mitigating difficult situations. However, recently it seems carriers are more wary of what they see as risky or onerous cargo. It has become very difficult to obtain waivers on penalties, and in most cases the carriers are advising that all negotiations have to be done by the consignee at destination. In addition, carriers are adding fixed handling charges for idle cargo; $250 and higher.
In most of these difficult cases, everyone insists that the consignee is working on it and will get it out, and on average that takes a year of delays. Our experience shows that no more than 15% of these idle shipments get resolved with waiting, while the majority end up still abandoned but with much higher penalties to deal with.
In light of these new trends and in order to better protect our partners from huge penalties and losses, Missionary Expediters is implementing a new Idle Cargo Policy effective immediately. With this new policy, at Missionary Expediters’ election, upon 120 days of cargo sitting idle (or per carrier contract or port regulations), the customer may be asked to put up a deposit equal to the current amount of the penalties as a guarantee. Then, the customer will be given 60 days more to clear and remove the cargo, or it will be followed by final abandonment procedures. Any balance of the deposit is refundable upon closing of shipment, and after satisfaction of all carrier’s charges. Alternately, the customer may proceed with abandonment of the shipment immediately. Abandonments are handled at customer’s expense.
Some of you may have heard more on this subject at our recent MX Logistics Forum in early October. An example mentioned at that time cited that one shipment sitting in Mozambique for 90 days would accrue over $20,000 in demurrage charges (not including port storage, taxes or other destination fees). Per Maritime Law and shipping terms, the cargo owner (merchant, customer) is fully liable for any and all charges related to the shipment. As your trusted partner, we hope that by implementing our Idle Cargo Policy Missionary Expediters can help you avoid a costly situation.
Please refer to our shipping terms and conditions for more information