Cargo abandonment is a topic that has been on the rise of late, with increasingly frequent regulatory changes often adding additional stress or challenges on importers, leaving them in positions where sometimes hard or impossible choices need to be made. For some importers, not collecting goods at a port of entry can be the only recourse left or a legal necessity if they don’t have the correct documentation. But what happens to unclaimed cargo at ports of entry? What are the rules and processes when an import cannot or will not be picked up at Customs? What is the official process of cargo abandonment through Customs and Border Protection (CBP), and what are the consequences of doing so?

Like so much in the world of international trade, it’s a concept that seems simple in the abstract, but when you get down into the practicalities, the process can bear a weight of significant complication and cost for importers of all shapes and tenures.

What is Cargo Abandonment in Shipping?

It’s easy to think of cargo abandonment as being an importer simply deciding not to pick up their goods at port, but the reasons behind taking this course of action can be varied. Perhaps the cargo’s documentation was missing and it cannot legally be retrieved, or maybe the company has entered insolvency and does not have the funds required to pay the relevant duties and taxes - whatever the reason, goods are often left at CBP’s doorstep, and a legal process of cargo abandonment at Customs is necessary to manage these goods.

General Order

The first step of an abandoned good is to enter what is referred to as ‘General Order’ (GO). It’s easiest to view this as a kind of grace period for goods that are, hopefully, not yet fully abandoned.

The exact timing of when a good arrives at Customs and when it is eventually transferred to a GO warehouse can be a matter of some debate when it comes to the specifics, but generally speaking, importers have 15 calendar days after the goods land to file entry documentation and pay any relevant duties before their goods are sent to the warehouse.

The goods that are entered into the GO warehouses are those that fall into one of a few different categories:

• The entry is not made within the required time period.
• The entry is incomplete due to unpaid duties.
• The entry is incomplete due to missing documentation.
• The merchandise is not legally invoiced.
• Or at the request of the consignee or conveyance owner.

A GO Warehouse is specially bonded to hold goods like this for no longer than six months after the date of the goods’ importation. From that point, there are three ways out of that warehouse:

1. Exportation: The goods can be sent back to where they came from at the request of the importer. Notably, this does not require a new examination or appraisement if done within this six-month window.
2. Importation: If the challenges surrounding its current stay at the GO warehouse are resolved within this six-month window, the goods are free to enter the country as usual.
3. Designation as ‘unclaimed’: After the six-month period, CBP is free to destroy, sell, or otherwise dispose of the goods as they see fit.

Importantly, your goods stay in these warehouses is not free, which leads us nicely into our next section - 

Potential Consequences of Abandonment

There are three different ways that a good can end up ‘abandoned,’ and it’s important to understand them because the consequences are often tied to the nature of how this came about.

1. Unclaimed: These are the goods that were simply left to expire in the GO Warehouse without the relevant duties and storage charges paid.
2. Involuntary Abandonment: These goods are for those goods that are left behind in a bonded warehouse for over five years. There are other versions of this that exist on a case-by-case basis, including goods for trade fairs that are left behind three months after the fair’s closing date.
3. Voluntary Abandonment: Importers can request that goods be considered abandoned.

Essentially, any goods that run out their time at the GO warehouse, generally speaking, six months, are considered abandoned and, as a result, are free to be retained for official use, destroyed, or disposed of by the CBP. They also may be sold at auction, which brings us to the largest single consequence of abandoning your goods at Customs: fees.

Regardless of how an importer goes about abandoning their goods or for what reason, there is likely to be a significant bill attached covering the cost of the goods’ stay at the GO warehouse. The proceeds from the sale of these abandoned goods, if there are any, go to those fees first, then lien holders, and then any remaining cost is extended to the owner or consignee of the goods.

In most cases, it is the importer who is responsible for the storage, drayage, and warehousing fees associated with keeping their goods during their time in a GO warehouse. The longer the goods stay there, the larger the bill that accrues (typically more than a standard warehouse), which is why voluntary abandonment is often the better route if you can manage it. In doing so, you reduce the time goods spend in the warehouse waiting for an outcome.

You can voluntarily abandon your goods any time within three years from the date of importation, and you’ll still need to pay for the time you spent in the GO warehouse or the fees associated with the disposal of the goods, but it is almost always a cheaper route in the long run.

Cargo Liens

Another element related to abandoning cargo is the cargo lien. These are legal claims against the imported cargo, preventing its release until the necessary unpaid freight or charges are settled. They are often established as part of an importer’s contract with freight companies or brokers as a means of protecting those organizations against a business that defaults on its financial obligations.

It can get a bit complicated, but essentially, lienholders are given the opportunity to have a say in how abandoned goods they have a lien over can be handled at this point. The lienholder may provide the importer with written notice of its intention to exercise the lien, and if the amount owed is not paid in full, the holder may sell or auction the goods themselves. With any revenue from the sale, CBP covers its costs, then the lien holder’s costs, then, if there is anything left, the remainder goes back to the importer.

Abandonment Issues

Generally speaking, no importer wants to abandon cargo, and it is always best to try to avoid this situation whenever possible. With that in mind, there are a few things you can consider to help avoid abandoning imported goods.

The first is to work closely with your broker, maintaining communication and being up to date with the latest in terms of regulations and changes affecting your imports. Even something as simple as signing up for the PCB Trading Post newsletter can go a long way towards keeping you in the know about what is happening as it’s happening.

Second, be sure to prioritize documentation and financial obligations, leaving plenty of time to gather what you need before your goods arrive. In the same vein as the above, a skilled broker can help you know what you’ll need before you discover too late that you needed it.

Diligence and an abundance of care can go a long way towards helping you avoid and potentially deal with abandoned cargo, so be sure to do everything you can to stay informed when importing.