Guide to Recovering Unpaid Export Goods

This article focuses on the return of exported goods due to unsettled payments. It details the operational procedures and precautions, including ensuring ownership, notifying the shipowner, seeking cooperation from the consignee, and estimating the costs after the goods are returned to the country. The aim is to help exporters minimize losses in such situations. It covers practical aspects of handling returned shipments and mitigating financial risks associated with non-payment in international trade.
Guide to Recovering Unpaid Export Goods

International trade transactions can take an unexpected turn when shipments arrive at their destination port but buyers fail to make payment. As demurrage charges accumulate, exporters face the difficult decision of whether to return goods to their origin country. This situation requires careful navigation to protect financial interests.

Securing Legal Control of Goods

The critical first step involves maintaining legal ownership of the shipment. Exporters must ensure they retain the original bill of lading and haven't authorized electronic release (telex release) to the consignee. Without this control, returning goods becomes legally impossible.

Immediate Notification Protocol

Exporters should promptly contact their booking agent at the port of origin to initiate return procedures. Simultaneously, they must notify the shipping carrier in writing, emphasizing their bill of lading possession and demanding strict compliance with no-release-without-documentation policies. Some exporters choose to modify the bill of lading's consignee field to "TO ORDER" as an additional protective measure.

Documentation Strategies

While not legally mandatory, obtaining a written refusal notice from the original consignee significantly simplifies the return process. This document serves as evidence of non-acceptance and may prove valuable for insurance claims or future disputes. The ideal resolution involves finding alternative buyers at the destination port, allowing for straightforward document transfers upon payment.

Return Shipping Considerations

When alternative buyers cannot be secured, exporters must negotiate return terms with the carrier. Shipping companies typically provide comprehensive quotes including:

  • Ocean freight charges for return voyage
  • Destination port handling fees
  • Possible storage or administrative costs

Financial Implications

Returning goods to the country of origin involves multiple cost components that require careful evaluation:

  • Return ocean freight charges
  • Port clearance and handling fees
  • Domestic transportation to final destination
  • Import duties and value-added taxes

Exporters must conduct thorough cost-benefit analyses before committing to return shipments, as expenses can sometimes approach or exceed the goods' original value. Professional customs brokers and logistics experts can provide valuable guidance in these complex situations.