International shipping business is subject to numerous import controls and regulations and it is costly and time consuming when something goes wrong or when you fail to comply with these regulations and this ends up causing penalties, delays, unexpected costs and confiscation to the importers as it can be hard to fix problems once the shipment is on its way.
Sometimes even though you comply with the regulations, you might still face with the delays and unexpected costs with your import shipments. Below points are some of the most common situations/problems importers might face with their import shipments.
1) Custom Exams: Import containers can face with several different types of exams for many different reasons. Some exams are random and some others are targeted at specific issues with particular types of shipments. There are many different type of exams as given below and import containers may face with one or sometimes more than one type of exams if the customs see the need to further examine the containers. Exams cause extra costs to importers like exam fee, demurrage, per diem and delays the delivery process of the shipments. (Please see our custom exams article on our web site for further detailed information.
– Document review (at either the carrier manifest level, or customs entry document level)
– VACIS (Vehicle and Cargo Inspection System) Examining the containers with X-ray without opening / breaking the seal of the containers.
– Unloading and physically inspecting of all or part of a shipment (CET / AQI / MET / USDA)
– Sampling and laboratory testing of products from a shipment (FDA Exams)
2) Damage: One of the problems importers might face with their shipments is damage to their cargo or to the container. Due to wrong leashing or not securing the cargo properly inside the container while stuffing at origin, the cargo might get damaged during the transportation or the container might get damaged due to careless work of the terminal or vessels operators. If any damage happens, the claim to the right parties should be done in a timely manner according to the claim procedures so that the importer will compensate their loss due to the damage from the responsible parties. (Please see our article on Damage claim process on our web site for further detailed information on this subject)
3) Demurrage: Demurrage is a cost, charged by steamship lines which occurs at the port area when the containers are held longer than the agreed standard free time for the use of their shipping containers. A limited number of free days, which varies depending on the carrier and location is granted, after which demurrage charges will be incurred for each additional day. This fee is intended to discourage the use of the carrier’s equipment for storage purposes and to compensate the carrier for the use of their equipment. Demurrage might be caused from many different reasons like late freight release and / or custom release of the containers, long exams, damaged or overweight containers, which will cause the importers to pay additional costs and also will delay the cargo delivery.
4) Per Diem: Per diem is a charge applied by the steamship lines for the use of their equipment. The per diem fee is incurred after the containers leave the terminal until the equipment is returned back to that terminal. It is expected that the carriers’ empty containers will be returned to a designated location within a certain number of agreed free days. A container cannot remain at the consignee’s facility beyond the allotted number of days because their warehouse is full or they lack staff or equipment for unloading the container. This late return of the empty containers will cause additional charges to the importers.
5) Detention: Detention charges are often charged by the truckers due to excess time taken by the consignee for unloading the cargo. These fees are mostly billed hourly. Most truckers allow 2 hours free for the unloading of the containers. When that time is exceeded, it prevents the trucking company from utilizing their trucks and drivers for additional deliveries. The detention fees compensate for the use of these resources.
6) Missing Documents: The Original B/L’s are one of the most important document in shipping business therefore when they go missing due to some unforeseen reason (it might get lost with the courier or it might get lost at origin or destination), this affects the freight release process of the shipments and might cause extra charges like demurrage to the importers due to delay with the freight release of the shipments. There are some ways like getting indemnity letter from the shipper and also from the consignee and from the bank (If B/L is consigned to the bank) however as this process also takes some time, it might still cause extra costs to the importer.
7) Custom Clearance Problems: In order to prevent any delay in custom clearance procedures, importers should provide complete and accurate information to the Customs Brokers/Freight Forwarders so that the clearance process will be smoother and your shipment will be less likely to face with any exams.
The last thing you want is for customs to find out that your shipping manifest is inaccurate and get the impression that you’re trying to trick them.
The rules, regulations, and laws sometimes differs from country to country. If there is a problem with your customs clearance, your shipping costs could go up by hundreds or thousands of dollars. On top of these costs, the delay in getting your shipping containers released to you because of customs clearance problems could cost your business more money because the arrival of your shipment is delayed.
8) Overweight / Unevenly distributed cargo: Another problem importers might face at the destination is overweight or uneven distribution of the cargo inside the container. In some cases the weight of the container is more than what is shown on the documents and when the trucker attempts to pick up the container to scale, it shows that the container can not go on the roads as it is more than the allowed container weight for that type of container or needs to be used a tri axle to be able to be delivered. If the cargo is distributed unevenly, this causes for one of the axles to weigh heavier than the others (although the whole container might not be overweight) and in this case, the container needs to be taken to a facility to be opened up so that the cargo inside the container can be stuffed evenly on each axle and this causes extra costs to the importer.
9) Strikes: Strike is a work stoppage caused by the mass refusal of employees to work. The strikes might be either at the Origin port, transshipment port or the destination port countries however no matter where it is at, it will definitely delay the shipments due to work stoppage and congestion caused because of the strike and this will again cost your business money because the arrival of your shipment will be delayed inevitably. (For further information on strikes, please read our article on our web site regarding this)
10) Penalties: Importers have to comply with some regulations when importing cargo and failure to do so causes fines, penalties. An example for this one is the ISF filing. Importers are responsible of filing the ISF in a timely manner before their shipment leaves the last foreign port and if this is not filed on time, US Customs might charge up to $5000 fines per shipment and this will also cause your shipment more likely to be subject to customs examinations once it arrives into the port of destination. (For further information on ISF, please check our article on our web site on this subject) Another fine importers would face is the customs penalties due to incorrect information provided to customs for the custom clearance as I mentioned above.
11) Holidays: This is also a very common delay reason for the importers as there are many different holiday periods in many different countries all around the world. The shipments might get affected by the national holidays either at the origin port or at the destination port. After the holidays are finished, the ports, truckers, customs, etc… get very busy and this causes congestion and affects either the release or delivery of the containers and importer might end up paying demurrage, per diem or delay with the deliveries inevitably.
12) Lost Containers at the terminal: After the import containers arrive into port of destination and discharged from the vessel, as most of the port areas are so big, sometimes the discharged containers get lost (UTL), meaning the port stuff would not be able to spot the container if the container is not at its spot location as per the terminal’s records. In these cases, the port stuff searches for the container and to spot the container might take from one day to several days (I just had a case with one of our customers where the terminal found their container after two weeks). As this is due to out of control of the importer, the ports most of the time waive the demurrage in case it occurs so the loss of the container would not cause extra charge but importer will end up with delays for the delivery of the container due to that.
I hope this article helps importers to understand some of the possible extra charges that might occur for their shipments once their containers arrive at the port of discharge and they would be somehow prepared for the unexpected at a certain degree.