Customers Clearance Stories from the Gallagher Archives. 

Importing Goods from Overseas. Who should pay shipping?

Sometimes our clients purchase goods where the delivery is paid for by the shipper, and the shipper arranges for the steamship line to deliver the goods right to the consignee’s door.  This sounds mighty convenient, but we don’t recommend it.  Read on to see an example of why not.

Recently a client imported a container of frozen food products from Europe.  The goods were shipped in a refrigerated container and this shipment filled the container.  The security inspectors with Customs in Norfolk decided this container should be scheduled for a VACIS exam (which is a non-intrusive exam by gamma rays).  In addition, an agricultural inspector with Customs in Norfolk decided they should do a “tailgate” exam on this shipment.  In other words, they wanted to open the doors and look inside.

The problem was that the process of getting these exams done in Norfolk is a little slow and the steamship line only allows a limited number of free times days before they begin assessing demurrage (storage) charges.  Since Gallagher was aware of the typical delays in Norfolk and we noticed that the last free day was a Friday, we worked hard with the terminal to encourage them to move the container quickly for these exams.  This finally was all accomplished about 3 PM Friday, Norfolk time.

Why you want to be in control of your supply chain.

You’ll never guess what the steamship line’s response was when we told them the container is now ready for delivery!  Their answer:  sorry, it is too late to dispatch a truck today.  The container can’t be delivered until Monday.  And oh, by the way, there will be $750.00 in demurrage charges due as of Monday! demurrage

You see, the steamship line had no incentive to push to get that container delivered on Friday.  In fact, they had a $750 incentive to NOT get it delivered on Friday.  If we had been arranging the delivery, we would have been on the phone with our trucker on Thursday to make sure they were able and prepared to deliver the container on Friday, even late in the day on Friday.  If our regular trucker had been too busy, we would have called another company.  But we just had no power or ability to persuade the steamship line to deliver on Friday.  They were quite happy to say “no dice” and collect the demurrage charges.

This goes back to the age-old saying:  the more control you exercise over your supply chain, the better off you are.  When you lose control, it can and often does cost you money.