PortandTerminal.com, October 9, 2019
The problem of abandoned cargo is a perennial problem resulting in considerable bills on warehousing, container demurrage, and disposal costs. Apart from anything else, there is a significant drain on management resource to bring resolution just to get rid of the stuff.
HALIFAX, NOVA SCOTIA – Containers of abandoned cargo is a huge problem for shipping lines, ports and other stakeholders in the supply logistics.
Each year, an estimated 700,000 containers of cargo are never collected by their owners in the United States alone. When you project the scale of the problem out globally the numbers grow even more outrageous.
In 2016, a total of 165 containers of rotting pork were still left sitting at a shipping port in the Philippines. The containers had been sitting there for over two years with no one coming forward to claim it.
Learning from this experience, the Philippines threatened war against Canada in 2019 unless it did something to remove scores of abandoned containers filled with plastic waste that were abandoned and mouldering at the Port of Manila.
Closer to home, in 2017 Dallas-headquartered SeaLink International filed a lawsuit against Red Bank, N.J.-based Dock 7 Materials Group. Dock 7 exports recycled plastics and scrap electronic materials, including PET, LDPE, HDPE, acrylonitrile butadiene styrene and more.
According to documents filed with the court, in July 2015, Dock 7 signed a contract to sell about 70 metric tons of baled plastic bags to a Chinese company called Shanghai Tiancheng Resources and Environmental Protection.
The containers were shipped from the Port of Long Beach to the Port Shanghai but were never picked up by Shanghai Tiancheng Resources and Environmental Protection. The containers were left abandoned at the port in Shanghai for 15 months until they were eventually shipped back to the United States by Maersk at SeaLink’s expense.
In the end, SeaLink had to launch a lawsuit to try and collect the $141,500, plus interest and attorney’s fees it was owed by the original shipper Dock 7 Materials group.
Certain types of cargo more likely to be abandoned
Low-value cargo is most susceptible to abandonment. That includes thing like scrap, recyclables, charity goods and personal effects. Unsurprisingly, containers filled with expensive electronics are less rarely abandoned.
China amongst other Asian countries have recently clamped down on imports of recyclable materials which industry experts say has had a dramatic effect on the number of abandoned containers.
In western markets, brick and mortar retailers of all sizes are increasingly failing. Orders that were placed 4 months ago may suddenly be in jeopardy when cash-flow runs dry and clearance costs can not be paid by the customer.
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