SUPPLY CHAIN DISPUTES - A RACE AGAINST THE CLOCK

Any time there is a dispute about goods still in transit, there is an added element of difficulty.  If goods have not been cleared through customs or unpacked from the container, on top of the existing dispute, there will be added ongoing storage and container detention costs.

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The dispute may be with a supplier who is refusing to release the goods or a shipping line that is claimed that it is owed money. It may be that a consignee has abandoned the goods and the shipper or consignee is stuck with the liability.

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Our experience is that with lower valued goods, it does not take long for the storage and container detention costs to become greater than the value of the goods.  This is more likely to be the case where the goods have not been cleared through customs and are being stored at the port.

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In these circumstances it is important for all parties to quickly determine who is liable for the ongoing charges.  It may be that a consignee has a good claim against its supplier regarding the goods, but is nevertheless liable to the shipping line for storage and detention.

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At the same time, freight forwarders and shipping lines must be aware that each consignment has a tipping point where the costs of obtaining the consignment becomes more than the value of the consignment.  Once this tipping point is reached, the consignee is highly likely to abandon the container.

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Where a dispute concerns a consignment that is still accruing daily charges, it is important that parties act quickly.  This means seeking legal advice regarding the main dispute, determining which party is liable for storage and detention and assessing what steps should be taken now to mitigate those daily costs.

Even if a party is in the right regarding the substantive dispute, this does not give it a license to abandon the consignment or unreasonably accrue detention/storage charges.  The law will usually impose on a party an obligation to act reasonably to limit its losses.

CGT Law can provide advice on your potential liability for supply chain costs, what steps you should take to limit those costs and what rights you have to recover those costs from a third party.  

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In the heat of a dispute, the temptation will be to not give an inch.  CGT Law will use its experience of supply chain disputes to provide advice whether this is the correct strategy in your circumstances.