Distressed Freight and Distressed Cargo

Shipping containers

When shipping items overseas to a buyer, there are quite a few terms that are involved that are similar and downright confusing. You may have been informed by your freight forwarder or your shipping line that your cargo has become distressed cargo. What does that mean and what can you do about it? Is distressed cargo the same as distressed freight? Let’s find out.

Distressed Freight

Distressed cargo and distressed freight are two different things. Since the case of freight is easer, we will tackle that one first. When a ship shows up at a port to load their shipping containers, there is a very detailed document that says what will be loaded on board. If the shipping lines attempt to load cargo that has not been properly documented, then that becomes distressed freight. This could mean anything from weights being wrong to the wrong type of cargo loaded into the cargo container. Either way, the distressed freight will need to be addressed by the forwarder or owner before the items can be shipped overseas.

Distressed Cargo

Distressed cargo has to do with the opposite end of the shipment — when cargo arrives at a port (or might miss the port for some reason). Distressed cargo can happen when:

  • A buyer has failed to pay for the cargo that they requested be shipped to them. The most common occurrence of this is when a commodity is purchased by a buyer, not paid for, then drops in value significantly while in transit. This usually means that breaking the contract and paying the fines for doing so is better than taking a loss on the cargo they are having shipped to them.
  • When either the buyer or the seller has waited too long to execute the trade. This means that the time frame has expired and the cargo has not been paid for (or payment has been refused).
  • If a ship has experienced bad weather or other issues that have caused them to have to leave a port outside of their normally scheduled time frame, they may not be able to unload cargo. If this happens, they must unload the cargo at their next port and the cargo becomes distressed.

What to do about Distressed Cargo

The best way to avoid the first two things happening, assuming you are the seller, is to receive payment in full prior to shipment. This does not allow the person accepting the shipment to refuse payment and breach the contract.

If your cargo becomes distressed for other reasons, it may be necessary for the port to auction it off. This might be a way to recoup some of your losses.

Cratex Group are industrial packing and transloading experts that can handle all of your cargo packing and transloading needs. Contact us today for questions or help with transloading cargo for shipment overseas.