Not Following Instructions Correctly Results in Cold Spin

  • Date: 01/03/2011

Six containers loaded with washing machines were destined for a Venezuelan port via a transhipment port in the same country. The ship agent at the load port incorrectly stated in the cargo manifest that the transhipment port was the final destination. Normally such errors are easily corrected at minimum cost, but this particular error was to prove disastrous, as the destination port was a free port, whereas the transhipment port was not.

The Venezuelan customs authorities seized the cargo and demanded that customs duties were paid; otherwise the cargo would be assigned to the government. ITIC appointed lawyers to negotiate with the authorities in order to release the cargo and send it to its final, and correct, destination. However, it took several months for the cargo to be released, resulting in substantial costs for storage, container demurrage, customs fines and transportation costs. These costs totalled USD 85,500, which the agent had to pay in order to get the cargo released.

Ship agents should bear in mind that customs authorities in many countries are a source of revenue to the government and minor errors which can be easily resolved often result in cargo seizure and fines.

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