For the cargo owners, when you receive a short shipment notice by either your freight forwarder or your shipping agent, you are bound to face some administrative headaches and potentially, additional transport costs. One way or another, this will affect your whole logistics planning. Particularly if your cargo is time-sensitive. So, what is a Short Shipment in Logistics?
Short Shipment occurs prior to the vessel’s departure. When a part of or the whole of the cargo consignment was not loaded into the vessel, the cargo that was left behind is deemed as a short shipment. It could also happen during transshipment where a part of or the whole of the cargo consignment was left at the transshipment port while the vessel set sail to the destination.
You probably face it when you are flying. Once you have reached the airport, and you noticed that your baggage did not show up in the baggage carousel. To your horror, you discover that your baggage either did not leave the airport you came from or left to another country, probably Timbuktu.
Like many problems, short shipment stems from an array of causes, some are genuine mistake by the ocean carrier or the port operator, some are intentional. Here let’s look to understand what a short shipment is and how it manifests.
Definition and Cause of Short Shipment in Logistics
On the macro level, when the cargo onboard listed on the shipment manifest does not equate to the actual cargo on board. Either the cargo onboard listed is more than the cargo on the manifest or less, that is a clear sign that some cargo containers are short shipped on board.
Short Shipment Due to Human Error
The simplest reason for this to occur is purely a mistake of the ocean carrier, shipping agents, or the port operator.
As an exporter, if you have met all the necessary customs requirements for export, and the cargo container is staged in the port before the vessel cut-off date, you will be issued a Bill of Lading “Received for Sailing”.
In comparison, a shipping carrier will issue an endorsed “Shipped on Board” Bill of Lading if the cargo container, under the management of the carrier and its appointed vendor has deemed that the cargo is physically onboard the vessel.
In either case, these are all based on top-down/bottom-up documentation prepared, collated, and passed on by the responsible personnel handling the shipment.
It is very possible that during the shipping document preparation, some documentation errors occurred along the way that made the shipping agents fail to actually load the cargo container on board.
Regardless of whether the bill of lading is endorsed as “Shipped on Board” or “Received for Sailing”. The mistake is made by the carrier and therefore they are responsible for handling the cargo dutifully.
Short Shipment Due to Seaworthiness of Cargo or Cargo Container
Another situation where it is common for a cargo container to be short shipped is that either the cargo or the container had been seen as unseaworthy, and potentially may cause damage or harm for the person handling the cargo on board.
Here are a few listed examples that will make the cargo unseaworthy
- The container has been damaged beyond the possibility of handling the cargo
- Cargo has leaked and may cause harm to the sea or the person handling the cargo
- Upon inspection, the cargo is over the weight limit of the container load
When this occurs, for the safety of the sea and the carrier’s crew, the cargo is left behind the port.
Short Shipment Due to Customs Directive
All local customs officer has the right to inspect the cargo prior to loading the cargo container on board.
The rationale to which customs officer refers to determine which cargo to inspect and detain is based on risk assessment. It could be based on the shipper details, the cargo details, or the named destination.
If the inspection did not meet the satisfaction of the customs officer, they can detain the cargo for further investigation. And of course, once the container is detained, the cargo will not make it onto the vessel because the inspection process normally takes more than 2 days.
Difference between Short Ship and Short Land
Short Shipment occurs when a part of the whole cargo was not loaded onto the vessel. In comparison, short landed cargos are when the cargo container was not unloaded from the vessel and the carrier sailed to another port.
What to do when there is a Short Shipment?
Once you receive the short shipment notice from the shipping agent. Your primary motives would be to investigate the cause, reduce the additional transport cost, prepare the cargo for the next shipment. Here are some advices for this circumstance
1. If Short Shipment is due to agent error
First and foremost, you need to ascertain where the cargo is located, most likely you would find that detail noted on the short shipment notice.
By default, if the short shipment is due to the error of the shipping agent, they would load the cargo in the next available vessel.
If a part of your cargo is short-shipped, for example out of 10 containers, and 2 remained at the Port of Loading, the shipping agent is responsible to: –
- Resubmit a shipping manifest
- Issue a new Bill of Lading for the short-shipped cargo
- Waive all demurrage charges and port storage charges incurred
As a cargo owner, you need to communicate with your freight forwarder or the shipping agent that you are expecting a waiver on all demurrage charges and storage charges. Also, the documentation cost of manifest submission and the cost of the bill of lading issue is not billed to you.
Sometimes, during transshipment, the cargo container is unloaded from the port by mistake. This is also another example of a short-shipped cargo.
From the perspective of the cargo owner, your only option is to make sure the carrier makes the necessary step to load the cargo onto the next vessel available, and communicate the new ETA time.
Additional Reading: What is an advanced manifest submission
2. If Short Shipment due to cargo/container unseaworthiness
In this instance, prevention is the best course of action. When receiving an empty container for loading, you can ensure that the container is in good condition.
An eye inspection is usually enough to know if the container is in good shape or bad.
If you want to go the extra step, you can check the CSC plate of the container, which details the date of the container’s last maintenance. Do not accept any container that is more than 5 years due for scheduled maintenance.
The key action step for you to take is to compel the shipping agent to have an adjuster and a certified container inspector to inspect the seaworthiness of the container.
In the unlikely event that the shipping container provided is not seaworthy. You need to once again communicate that the short shipment is not due to your fault and seek to reduce any costs for the additional arrangement
3. If your cargo is unseaworthy
Well, once your cargo is in the port, and you have notified your local customs officers of the export declaration.
You need to “re-import” the cargo, return the cargo to your premise and redo all the process once more, but ensuring the cargo loaded meets the proper safety requirements.
Short Shipment Cargos is a common occurrence, but the events that led up to the short shipment may be unclear or blurred during communication.
You have to be certain of your rights in the contract of carriage, and ensure that all accountable parties correspond with you the necessary information pertaining to the delay.
Do seek legal advice particularly if your cargo is time-sensitive cargo, it could be an exhibition display goods, concert equipment, event equipment, or even project shipment. There are special cargo insurances that specifically covers cargo delay which you can use to negate such problems.