Forbidden scrap

A liner agent accepted, on behalf of a shipping line, a cargo of scrap plastic from the southern hemisphere to the Far East. Unfortunately the agents had previously received instructions from their principal not to accept any waste or scrap material for shipment to the Far East.

When the cargo arrived at the destination, the authorities prohibited its import and required it to be re-exported, resulting in various costs totalling USD 20,000 being incurred by the shipping line. The line was unable to recover these costs from the shippers, who had disappeared. The line looked to their agent for reimbursement of these charges, which included storage charges, port charges, customs inspection fees and container demurrage.

ITIC, through the local Thomas Miller office, sought advice to determine whether the three months it took to re-export the cargo was reasonable. The local office confirmed that the costs were reasonable and arose solely from the failure of the liner agent to follow the shipping line’s instructions. On this basis, ITIC agreed to reimburse the agent, net of the deductible, for the full USD 20,000.