CARGO ON HOLD – COMMON REASONS FOR SHIPMENT DELAY

In import and export operations, it is not uncommon for shipments to be held at the destination port, a situation often referred to as “cargo on hold.” This can cause delays in delivery, lead to additional storage charges, and negatively impact a company’s reputation. So, what are the most common reasons for cargo being placed on hold? Let’s take a closer look below.

Cargo on Hold Due to the Shipping Line or Forwarder

One of the most frequent causes of shipment holds comes from requirements imposed by the shipping line or international freight forwarder. Common scenarios include:

Unpaid local charges: Fees such as THC, D/O fees, container cleaning charges, handling fees, and other local costs must be fully paid before the shipping line will release the cargo to the consignee.
Missing or undelivered original Bill of Lading (Original B/L): When using an original bill of lading, the consignee must submit the hard copy to obtain a Delivery Order. Without it, the cargo will remain on hold.
Unconfirmed telex release: Even if the bill of lading has been “telex released,” the shipping line at the destination port must confirm it before releasing the cargo.
Shipper’s hold request: The shipper may request the shipping line to hold the goods if payment has not been received in full or if there are concerns about the transaction’s reliability.

Cargo on Hold Due to Customs

During the customs clearance process, goods can also be held by customs authorities for legal or documentation-related issues:

Red channel – physical inspection: If the shipment is assigned to the red channel, customs will conduct a physical inspection before clearance is granted.
Suspicion of incorrect declarations: Customs officers may hold the goods if they suspect inaccuracies in the HS code, declared value, or certificate of origin (C/O).
Missing specialized documents: Certain goods require specific import permits, quality inspection certificates, phytosanitary or veterinary certificates, or food safety certifications. Without these, the cargo will not be cleared.
Post-clearance audits or business investigations: In cases where a company’s activities are under investigation, shipments may be held for further verification.

Cargo on Hold at the Request of the Buyer or Seller

In some cases, the consignee (buyer) or shipper (seller) may request that the shipment be held due to unforeseen commercial circumstances:

Buyer’s request: The buyer may not be ready to receive the goods due to lack of warehouse space, incomplete payment, or changes in the delivery plan.
Seller’s request: This often occurs when the seller has not yet received full payment or when a contractual dispute arises.

Cargo on Hold Due to L/C or Bank Issues

In transactions involving a Letter of Credit (L/C), if the document set does not comply with the agreed terms, the bank may refuse payment and request that the shipment be held at the destination port. Other situations include:

Document discrepancies under L/C: Errors or missing information in the document set compared to L/C terms will result in the bank’s refusal to process payment, causing the goods to be held.
Incomplete bank transactions: Delays in international money transfers, banking errors, or suspended transactions may prevent timely cargo release.

How to Handle Cargo on Hold

To minimize the risk of cargo being placed on hold, businesses should carefully review all shipping documents, ensure timely payments, and understand the legal requirements and regulations of the shipping line, customs, and banks involved. Additionally, maintaining open communication with partners can help promptly address any issues that arise during shipping or clearance.

If you’re looking for the best import-export solutions, feel free to contact us for detailed consultation. If you need legal support or assistance with customs procedures in import-export activities, please contact Smart Link Logistics for fast and efficient consultation. With over 15 years of experience in the transportation field, we are proud to accompany you throughout your journey.

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If you require assistance with international import and export of goods, please contact our team at Smartlink Logistics. We are available to provide you with professional guidance on our services and the necessary customs procedures.

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