View Full Version : Sea Freight.....

Louise Coldwell
04-01-2003, 01:40 PM
Hi all

I'm in bit of predicament at mo....

Arranged a Sea Freight job for one of my customers month ago now, import from Shanghai to Port Felixstowe....

My problem is often very common....my customers supplier in China wont release the Bill of Laden until he has received payment in his account from my uk customer.

This is his only security of receiving payment from uk customer.

This is posing major probs as my customer in uk is delaying payment.

He wants goods delivered on time and without any extra charges but as i advised him need the documents for customs clearence and if late will accrue port charges.

Goods are due to arrive on Tue 07/01/03 and still unsuccesful in contacting uk customer.....

I know that will prob accrue port charges but affraid that customer wont pay....

Have thought about getting goods delivered directly to myself and holding them until have something in writing agreeing that he will accept payment and charges?

Any ideas would be much appreciated!!



04-01-2003, 02:41 PM
Apparently this is a very common problem.

Why don't you organise a bank transfer payment whereby the buyers and suppliers banks deal with the payment. I think the Bill of Lading gets sent direct to the bank and not the buyer. Then upon receipt of this the buyers bank authorises the payment direct to the suppliers bank.

That way the supplier is assured of payment once they send the goods and the buyer is assured that the goods will arrive and they won't pay for goods that don't turn up. Both parties are secure. Obviously you need to take into account the freight and insurance terms as well but at least this is a comprimise for both parties.

I think the banks charge for this service or you may need to go to specialist bank - not sure but it's worth contacting them to find out.

Hope this helps.


Louise Coldwell
04-01-2003, 02:51 PM
Hi Rhys

Thanks for that.

I know that the Bill of Lading is coming directly to myself being the freight forwarder.

The problem is that transfers have been set up with both parties banks but the uk customer has either cancelled transfer with bank for China or hasnt given them go ahead to release payment!

Have got invoices and Bill of Laden on e-mail but unfortunatly when its printed it is too faint to see the text and wont be acceptable for customs!

I have tried to enlarge it but still unable to see the small text?!

Have just got another e-mail from guy in China and he is saying that he should of received payment in his account week ago but up to today still nothing!

Am in catch 22!!

Until i can get in contact with my uk customer i cant see way forward apart from just waiting.....

I'll know to stay clear of this one next time as it is a regular monthly requirement!!



04-01-2003, 04:55 PM
Who currently has the Bill of Lading? Shouldn't it be with the carriers at the moment since the goods are due in the UK on Tuesday?

You've probably tried this but what about a high quality printer? Or making the text sharper on photoshop or something like that?

I'm not sure whether you know or not but you can set-up a situation with the banks whereby once both parties enter into an agreement - neither can pull out unless there is something wrong with the Bill of Lading, i.e. "Apparent good order and condition".

You are in a difficult situation. And like you said you cannot really do anything until you speak to the UK customer.
I'd just try to be as honest as you can with the Chinese customer and promise him/her further update Monday morning (afternoon -China).

What type of shipment is it? CIF/FOB/ex-works/etc? Don't chinese companies usually contract on FOB "singapore"? Therefore the UK customer is liable for payment of port charges whether he wants them or not.

Good luck and hope it works out.


Louise Coldwell
04-01-2003, 05:31 PM
Hi Rhys

Yep tried high quality printer etc and no good!

I had arranged for the B.O.L to come directly to myself the invoices are with the goods.The freight is F.O.B but the thing is i didnt want to accrue any port charges although i'm ineffect non-liable i will still have to pay them and re-forward to my uk customer....who wont be too happy and may pose prob!

Have never liked dealing with Sea Freight,air freight and road my speciality !!

Thanks for advice though...

You seem to know alot about this sort of thing and the terminology.......what is it that you do?If you dont mind me asking...




04-01-2003, 10:03 PM
I'd make sure that your customer is well aware that they are liable for the extra payments for the delay at the port.

Do you use Incoterms? If you make your customers aware that they are contracted by Incoterms then they can have no arguement about the charges incurred at the port for the delay as I'm pretty sure it is detailed in there.

If you are not using Incoterms - I'd strongly advise you do. The problem with International trade is that different countries have different domestic laws and then on top of that there are international laws that govern international trade. The whole process gets VERY complicated and messy.

Incoterms are generally recognised world-wide and standard practice in international trade. Another benefit of using them is that in a case like this where you have conflict between the parties - they or you might need a Lawyer that specialises in International trade. And they cost a FORTUNE!!!!!! Probably more then what the goods would be worth. But with Incoterms both parties understand their roles and helps prevent any confusion or if it does go to court then is easier to solve.

Is there anyway that you can get around paying the charges for storage? Can you think of anyway that you could keep them there free of charge? I'm not suggestioning you lie or anything (wink, wink!!!!!) But I remember reading something about C&E letting you store goods at the port free of charge for a certain length of time under certain conditions. Although I'm really not sure about that.

At the moment I work as a buyer...at the moment! But as part of my degree I had to study international trade law and business law - which although it was a pain in the ass at the time is proving quite useful both in my job and what I'm looking to do.

07-01-2003, 12:28 AM

Do not know if you have sorted this problem yet but a couple of points. I would have to check this, but from memory, I have been involved in many customs clearances and you have at 45days to lodge the entry. But it is not your problem. If it takes 3yrs to clear the goods C&E will not chase you as your are the freight forwarder. In fact I have often used the threat of C&E coming down to inspect a company Vat accounts (true in some cases) if they do not sort the clearance out. Make sure you give (C&E) any info they request though.

Again if you have purely been contracted to do the shipping, payment between the custumer and his buyer is not your problem. It is not your responsibity to arrange payment terms at all.

Make certain that you have notified your customer of any potential charges in writing not just verbally (+if you wish cc the goods sender).

Make sure the terminal handling the goods does not release the goods to anybody without your say so (again in writing). Just because you have the bill of lading does not mean the Terminal will not release the goods. Make sure you can get the money for the freight if in doubt insist on it up front.

If all else fails remember you hold the goods and so long the value of the goods cover your costs, you are in a good position!

I have been there and so have several of the people I have worked with and we always won and the clients continued to ship with us.

Unless you really want to do not get the goods delivered to you. If it is a FCL you will be expect to destuff the container otherwise you will pay storage rent on the container. Besides you cannot normally take uncleared goods out of a port unless it is going to a bonded store. I never allowed it unless C&E gave permission to do so. Plus you will have to have the goods insured, risk of claims against you for damage, etc,etc. Be careful if you do this.

The notes are just general points as I do not know the full circustamces. If you have further problems, post away and I will offer what help I can. or email ionstar@rdgservices.co.uk



Louise Coldwell
07-01-2003, 08:51 AM
Hi Rhys....

Thanks for brill advice really appreciate it!

Have taken my dose of headache tablets this morning as goods have now arrived and yep still no joy contacting customer and no bloody bill of lading!!

Really not sure how to get round charges with C&E for storage??

Sea Freight is'nt my strong point at all.....just normally deal with Air Freight and Road...and all the extra's!

Intresting to see that you have studied Intl law.........i know what you mean have been on few courses when worked for carrier on things like general aviation,exports and imports and yes your right it can be pain in the ass!

You seem to know your stuff...I think its paying off but then i'm biased!

Once again Cheers

Speak soon



Hi Richard

Cheers for brill advice too.........really appreciate as said above Sea Freight not a strong point!I found the C&E facts very intresting........Thanks....Nice to see other people out there that know about the transport industry and is also great to talk to.

Once again big Thanks

Talk Soon


07-01-2003, 10:36 AM
I would stress if there is a chance that the bill of lading could end up in your customers hand make sure that the terminal discharge agents do not release the goods without your say so. If they do and you have it in writing it becomes their problem.

I cannot see how you can avoided the storage charges because of the C&E problem. Do the handling agents not offer a free storage period?

If your customer has disappeared you should advise the goods owner that this has occurred and advise him that their is outstanding duties/freight and the goods may be siezed. You may have to play this very hard.

If this is a new customer it is possible they are trying it on to see what they can get from you.



Louise Coldwell
07-01-2003, 06:21 PM
Hi Richard

On this job unfortunatly no free storage period offered....

Some good points there re them not releasing goods without my say so!

Will have to make sure i inform them as there is possibilty B.O.L could end up in my customers hands rather than mine!

It may be a case of its already been sent to him rather than me and therefore thats why i havent received it!

Also here's another one...........Have asked customer if they have defferment account but no response............

Am i correct in saying that its customers responsibilty for import duty and VAT?

As the last thing i need right now is for invoice for that.

If i have to pay it now surely i can pass this directly onto customer then its in thier hands??



07-01-2003, 09:33 PM
Unless for some reason you have stated in your contract with your client that you will cover the tax and duty costs DO NOT pay them in advance. How are you going to claim them back for starters. If the customer is being problamatic now what chance do you have to get the VAT and duty back. Your client should be aware of their Tax/duty payments on the goods or else how can they know the full costs of their goods?

With regard to a defferment account to clear goods they do not have to have one, they can either issue a cheque (if allowed by C&E) or a bankers draft to C&E for the amount. I have my first shipment arrived (I own the goods) today and will clear then using a bankers draft as a do not have a deferment account but probably not until next week!

I have been involved in clearances for over 8 years with my old company. Never once would we pay the VAT/Duty in advance unless we had the money in advance. Even then it was then cleared in that companies name and we simply handled the money.

Are you calculating the VAT and duty yourself? or are you using an agent. If it is an agent then they should at least give some advice. You seem to know what you need for clearing goods.

Further you require an invoice for what? to calculate the VAT/Duty or for the actual amount of VAT/Duty?

If you do not get the Bill of Lading, no loss just make sure that the shipping terminal knows you have a hold on it. They will not overule that if they wish to get paid!

My recommendation would be to sit on it. Fax both companies of the charges due every day and that somebody has to pay them and you. You cannot clear goods if you do not have the documentation.

I will speak to a couple of people tomorrow on something I wish to check and I will post a follow up in late morning.



P.S any poor spelling/bad english is the fault of the computer not me

Louise Coldwell
08-01-2003, 01:17 PM
Hiya Richard

Thanks very much....

Much appreciated!

Didnt notice any bad spelling as i am terrrrrible !!

Look forward to recieving your update....

Will e-mail you shortly....Thanks a bunch

Speak Soon


08-01-2003, 05:10 PM
Ok, the general opinion is todo nothing, certainly if you are acting as agent only then do not start paying duty etc.

45days is general time allowed for customs clearances. So you main concern will be the storage charges.

Just sit on the goods. Keep both sides informed of the growing charges.

I have emailed you a copy of the IRHA regs. Have a look at section 8. It outlines how to proceed if you are unable to deliver goods and have to seize them.

Again keep everything recorded.



Louise Coldwell
10-01-2003, 04:31 PM
Hiya Richard

Have receieved e-mail and taken a look.....

Some great points have taken note....

Thanks Very Much for help and advice