Addressing Maritime and Business Law Issues Since 1989

Are you liable as a freight forwarder for abandoned cargo?

On Behalf of | Nov 13, 2019 | Maritime Law |

It’s a maddening scenario. You file all the paperwork, the product gets loaded up in the shipping containers, onto the vessels, and arrives safely to its destination. Once it’s there…the consignee won’t sign for it. Could you be held liable for the expenses?

It may all depend on how you booked with the shipping line and the issued bill of lading.

How did you book the shipment?

Liability may lie with the name on the paperwork. Those who are clearly indicated on correspondence such as email, booking forms or Standard Trading Conditions as an agent of the shipper may face almost no liability. This may also be the case if you belong to a Forwarding Association. You can probably use your insurance or risk management provider to create a case and handle the costs and liability.

If you are a business owner, you may be at risk for signing documents with your own name or signing it without making it clear that you are acting as an agent. This may complicate your situation and could make you liable for expenses and legal responsibility.

What was the Bill of Lading you issued to the shipper?

Freight Forwarders can issue two types of Bills of Lading (MBL and HBL). The information on either should be nearly identical, except for certain details.

  • House Bill of Lading issued by you as a Freight Forwarder to your customer.
  • Master Bill of Lading issued by the Shipping Line to the destination agent

These require careful preparation and arrangement to give your agreement the best chance for success.

If you issue an HBL (with a corresponding MBL) to your shipper, and have a direct consignee who does not clear the shipment, the abandoned cargo needs claiming. The carrier may pursue a claim against the shipper, which, if you signed the document yourself, could be you.

If you issue an MBL to the shipper and have a direct consignee who does not clear the shipment, your name is not directly on the document. In this case, the liability will not be directed at you.

Abandoned cargo can be frustrating as a failed business deal and concerning from a liability standpoint. With careful attention and legal planning, you can avoid unnecessary financial vulnerability.

RSS Feed

FindLaw Network