Does a Contract Mean Anything Today?
10-12-2008
In past recessions, scheduled order shipments are either deferred, reduced and given an export allocation, and prices were renegotiated for new supply. This recession is very different:
 
- Firm contracts have been cancelled.
- Transit tonnage prices have been negotiated down as much as seventy percent after shipment.
- Shipments have just been abandoned at the port of destination, meaning carriers could not be in a position to recover Demurrage 
   and Detention charges.
- Commercial claims have re-emerged to gain an additional discount.
 
The consequences of these actions is that shipping lines have been forced to place an immediate embargo on scrap materials to India, Thailand, Malaysia and Vietnam. Shippers can be held responsible and the consignee waits for containers contents to become available at auction and/or the consignee then stipulates that the future seller does not use these same suffering shipping lines again, who they owe money to, even when the supplier sells Cost and Freight and requires the most competitive freight rates to compete.
 
Recent press statements that some overseas consignees wish to be paid to receive materials, just adds salt to the wound, and highlights the risk for exporters, who must take not only high claim risk with inferior qualities from residential comingling processing, or lack thereof, but also from mobile shredders, which is resulting in overseas mills not accepting shredded Office Papers due to high contamination, and not being able to manually resort.
 
What happened to commercial ethics and respect for global industry standards? They must be somewhere with greed.