A French exporter ships ten containers of materials to West Africa; the buyer defaults and collects nothing. At the same time, in Le Havre, an importer abandons a container of textiles after its customer goes bankrupt. In both cases, the goods sit waiting, the charges accrue and the carrier turns to the shipper.
What the carrier can do
The carrier cannot keep the goods indefinitely. Where the goods are not claimed, the Transport Code allows it to obtain court authorisation to sell part of the goods up to the amount of the freight and to deposit the remainder (Article R. 5422-20 of the French Transport Code). Outside France, the procedure depends on the law of the port of discharge.
At the same time, it invoices the container and terminal delay charges. In a case involving uncollected goods, the Cour de cassation held that a claim for payment of these charges is subject to the one-year limitation period, which runs from the day on which delivery was due, in that case the day on which the carrier had enabled the consignee to take delivery (Cass. com., 3 December 2013, no. 12-22.093). A carrier that waits until the goods are destroyed before invoicing risks being time-barred.
Who pays?
The bill of lading often designates the shipper as the party liable for the charges, and the clause defining the “Merchant” sometimes extends that obligation to the consignee and the holder; everything depends on how it is drafted. The shipper therefore remains in the front line when the consignee disappears. It in turn has a claim against the defaulting buyer, depending on the contract of sale and the Incoterm.
The customs dimension
In France, non-Union goods that have been unloaded are placed in temporary storage and must be placed under a customs procedure or re-exported within ninety days (Union Customs Code, Article 149). After that, customs may take measures, including sale or destruction. The choice between return, resale on the spot or abandonment must take these time limits into account.
The shipper’s options
There are three options: bringing the goods back, reselling them to another buyer at the port of destination, or abandoning them. Each has a cost and its own formalities: a new bill of lading, the carrier’s agreement, regularisation with customs. Doing nothing is the worst option: the charges keep accruing.
What the firm checks first
- The bill of lading notations: party liable for the charges, delivery terms.
- The date on which the goods were made available.
- The customs position and the temporary storage time limits.
- The contract of sale and the Incoterm.
- The one-year time limit for claims.
For the firm’s services, see Carrier liability at sea and the pillar page International sales and Incoterms.
Further reading
- Container demurrage and detention: challenging the shipping line’s invoice
- Unpaid freight: can the carrier withhold the cargo?
- FOB, CFR, CIF: who can sue the carrier after cargo damage?
This analysis is part of the firm’s work in maritime law.
Frequently asked questions
Can the carrier sell goods that have not been collected?
With the court’s authorisation, up to the amount of the freight, and it may have the remainder deposited (Transport Code, Article R. 5422-20).
Does the shipper have to pay the charges if the buyer does not collect the goods?
In principle yes, depending on the terms of the bill of lading, with a claim over against the buyer.
How long can goods remain under customs control at the port?
Ninety days in temporary storage, before being placed under a procedure or re-exported (UCC, Article 149).