One might think that after transporting freight and meticulously organizing it in a large warehouse, the tough part of being in the logistics industry would be out of the way. In reality, offering warehousing services can bring unique challenges, and managing abandoned freight is one of them.
Why does abandoned freight happen in the first place?
Abandoned freight occurs for a number of reasons. It happens at every link in the supply chain. Often, cargo is abandoned at ports because the consignee realizes they don’t have the necessary license to legally import the cargo in question. Consignees may also be surprised by the magnitude of import taxes and duties and refuse to accept the cargo. The unclaimed cargo is a nuisance, getting in the way of daily operations, so the contracting party is responsible for any accrued storage fees.
In warehouses, abandoned freight is just as problematic. It usually happens for different reasons, however. Typically, abandonment occurs when a customer can no longer afford to store their cargo and lacks the resources to pick it up and store it themselves. Sometimes, this is the result of poor planning or mismanagement, but it can also happen from sheer bad luck. Running a business is always a risk. One of the risks of storing large amounts of merchandise is that it’s a massive headache to figure out what to do with it if your company falls on hard times.
Who’s responsible for abandoned freight?
Warehouse management has plenty of sympathy for customers in situations like these. With rising gas and insurance costs, owning a business isn’t for the faint of heart! At the end of the day, however, we’re running a business too. Unclaimed freight takes up valuable storage space that could be offered to other customers. The owner of the freight is still fully responsible for the cost of extended storage, but if they simply can’t pay, we have to move on to step two.
If the owner can’t or won’t claim it, what then?
If invoices remain unpaid, warehouses have no choice but to dispose of the abandoned freight via auction or scrap the contents for parts. Owners are notified well in advance, but if they don’t respond, the cargo must be sold. The proceeds from the materials are then applied to whatever remaining charges are owed for storage and handling.
Depending on the value of the freight, this may be enough to clear the customer’s balance in full. Often, it’s not, and the customer is still responsible for covering the remaining balance. If one of our warehousing customers is reading this and forgot to pay your bill on time, don’t panic! The process of disposing of abandoned freight only starts after repeated attempts to resolve overdue invoices.
If a complication does arise, communication is key.
We’re here to support fellow business owners as much as we possibly can. If continued warehousing becomes an issue at any point, give us a call. Our team has been there, done that, and we’re here to help resolve any and all storage issues as painlessly as possible.