Follow the correct procedure

A liner agent for a non-U.S. carrier correctly manifested a shipment of nine reefer containers for discharge in Seattle, Washington. The vessel was also carrying in excess of 100 empty containers which were also due for discharge at Seattle. On departing the load port the agent received instructions to discharge all the empty containers upon arrival at Oakland, California.

While in the process of changing the port of discharge from Seattle to Oakland for the empty containers the agent also mistakenly changed the port of discharge on the nine loaded refrigerated containers in the bay which were sitting underneath the empty containers.

The refrigerated containers were discharged upon arrival at Oakland.

The agent had to solve the problem of the erroneous discharge by getting the refrigerated containers to Seattle as per the carrier’s commitment under the bill of lading. It was not possible to move the cargo by road or rail because the containers were overweight.

The agent contacted the U.S. Customs and Border Protection (“CBP”) about the erroneous discharge. The agent mistakenly believed that the notification to CBP was sufficient.

CBP took the position that a written application had to be made for the movement to be properly authorised. That application had not been made. An initial penalty of US$ 1.17m was assessed by CBP. Following numerous exchanges with the authorities, the fine was ultimately reduced to US$ 292,478 (being 25% of the initial penalty). This amount, less the policy deductible, was reimbursed by ITIC.

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