When it comes to ocean freight, there are a number of people involved throughout the entire process. You have the shipper, the carrier, the agent, and the consignee, if applicable, just to name a few . When a problem comes about it can be hard to prove who is liable. So it’s important everyone is clear on what they are and aren’t responsible for. The best way to avoid any issues should things get to that point is to make sure everything goes as smoothly as possible from the very beginning, starting with the shipper and shipper liabilities.
It does not matter if the shipment is an FCL or LCL. The responsibilities of the shipper are the same in both cases. It is not as simple as preparing the container or pallets and waiting patiently for your shipment to arrive at its destination. It is the shipper’s responsibility to supply all of the data, permits, packaging, etc. and ensure that everything is in compliance with the rules of the origin and destination port as well. The very first thing the shipper should double check is whether they’re shipping items that are not allowed to be shipped to the specified destination.
The shipper must also ensure all of the correct details are provided to the steamship line. A very simple and often very costly mistake is the container seal. It is ultimately the shipper’s responsibility to place the seal on the container and make a note of the seal number. This is very important because an incorrect seal number on the Bill of Lading can cause customs officials to go into the red. It also can cost a lot of money in fines and fees. The Bill of Lading is a contract of carriage and the shipper has to make sure the contract contains all of the correct data pertaining to their shipment. Any discrepancies that slip past the shipper can cause delays. That results in the various shipping delay charges and possibly customs exams/holds too.
Last but absolutely not least, if the shipment is abandoned by the consignee for any reason while overseas, the shipper becomes responsible for all charges involved with finalizing the shipment and all charges for the entire length of the shipment. That’s regardless of the Incoterms stated. Whether it involves returning the shipment, disposing of the cargo, or selling it the items to someone else.
Ultimately, shipper liability does not end until the shipment is released at its destination port. To avoid discrepancies, it is best to thoroughly read the terms and conditions on the Bill of Lading to be completely aware of all responsibilities. It’s also recommendable to understand the various Incoterms and know how to pick the right Incoterm for your shipment.
"The problem with these costs is that they’re often impossible to predict and are thus hardly ever considered when analyzing and comparing ocean freight rates"
Klaus Lydsal, vice president of operations at iContainers