Learn the Truth About What Distressed Cargo Means For You
Whether you are new to the freight forwarding field or have years of experience, the term “distressed cargo” has probably come to your attention at least once. Put simply, cargo is categorized as distressed when the buyer abandons the goods.
This occurs when the buyer is no longer willing to honor the original contract agreed upon due to unfavorable or unexpected changes. The cause of these changes can vary greatly and oftentimes is the result of unavoidable weather or travel emergencies. Regardless of the reason, distressed cargo poses a special case for international shippers. Promptus LLC wants to help any potential sellers or buyers understand exactly what it means when cargo is pronounced distressed.
Anyone who has experience with international shipping understands that it can often be a finicky situation with many external factors that are sometimes out of your control. Distressed cargo occurs for a variety of reasons and will typically cause the goods to become unsellable or drop significantly below their original retail price. Understanding why this happens and if the distressed cargo can be salvaged can help you understand what you can do next and, better yet, how you can prevent or minimize the risk of it occurring again!
In most cases, cargo being shipped overseas can become distressed for one of two reasons:
- The buyer refused to pay for the cargo that they requested. This most commonly occurs when the goods being shipped to the buyer have dropped significantly in commodity value while in transit, causing the buyer to default on the shipment and the shipper to be left with distressed cargo. It can also occur when a seller takes too long to complete a trade, thereby expiring the contract’s time frame and causing the contract to be nullified. The Your buyer may then refuse to pay, leaving the seller with unpaid goods that are now considered distressed cargo.
- The cargo was forced to dock at a port other than the one designated in the contract during the scheduled time frame. Sometimes, unforeseen weather conditions like a severe storm or similar conditions can force a cargo ship to dock at a port other than the one specified in their contract or bill of lading. The cargo will be offloaded at the port, where it will be marked distressed and lose much of its value. If this occurs, whoever has ownership of the cargo at the time may consider auctioning off the goods to help cover the losses.
Top-Notch Freight Forward Solutions
Distressed cargo can mean thousands in losses because cargo must be sold well undervalue. Not to mention the added costs of any repackaging, customs fees, or fines that it may have incurred. Thankfully, our company can assist both buyers and sellers in understanding the risks and create alternate plans to minimize the potential loss.
With over 15 years of experience, our clients feel secure in putting their trust in our freight forwarding services and knowing that we are dedicated to providing them with the highest-quality commitment and technology towards business growth. Contact us today at (305) 687-1405 to receive a quote from one of our experts. We will help you get the best deal, plan the best route, and maximize efficiency!