Delivery without deposit, be careful of loss of goods
The MDF PLYWOOD manufacturer started production and delivery without even receiving 30% of the deposit, and finally Mexican plywood and MDF customers chose to abandon the goods, and there was no way to cry
What happened:
A plywood manufacturer located in Yitang District, Linyi, has a good scale benefit. Since 2018, the boss wants to switch from domestic trade to foreign trade. At the end of August 2022, two 40HQ containers were shipped to Mexico.
Because it is a plywood and MDF customer for many times, the boss started production without charging 30% deposit in order to open business.
Now, plywood and MDF customers directly announced that they would not pay the balance.
If the guest clearly wants to discard the goods, there are 3 options:
- Quickly find the next Mexican plywood and MDF importer for resale;
- If the next plywood and MDF importer cannot be found at one and a half hours, don’t break face with the consignee for the time being, let the consignee of the bill of lading cooperate in issuing the declaration of abandonment (the declaration of abandonment by the consignee is required for the return of goods to the destination port in most countries), arrange the return, and the goods can be returned to the Hong Kong warehouse or bonded warehouse. If there are next plywood and MDF customers who place an order, they can re send the goods, so that no tax is required, and the procedures are simple and minimize the loss of return;
- The worst plan is to give up the goods, pay the fees and let the customs at the port of destination arrange destruction or auction; The demurrage and over container rent at Mexico’s destination port are very expensive, and should be handled as soon as possible.
We also need to learn to recognize the signals of abandoned goods, and once there are signs, we should “brake” in time:
1、 Delay in payment and malicious abandonment
There was no problem from early orders to product production. When the final payment was to be paid, plywood and MDF customers disappeared directly, and no phone or email was returned; Some plywood and MDF customers directly cry for money.
In this case, the real problem is that the customized products of plywood and MDF customers have no market demand or missed a hot event. They would rather lose the deposit than abandon the products.
2、 When the goods arrive at the port, refuse to bargain
In this case, the importers of plywood and MDF do not want to buy the goods, but just want to get the goods at a low price through certain means. Plywood and MDF importers have decided to return the products, and you are worried that you cannot resell them. For you, they are waste products. Therefore, foreign trade partners can only suffer losses and reduce prices!
3、 Return based on quality/delivery date
If the goods are returned due to quality or delivery time problems, it is necessary to make clear whether it is the reason of the company itself.
4、 Credit survey of plywood and MDF customers
The credit survey of plywood and MDF customers, which is the basic means of foreign trade risk prevention and control, is often ignored by foreign trade enterprises. A credit report can help you to know the payment capacity and credit rating of plywood and MDF customers in advance, which can not only help you determine the credit line for plywood and MDF customers, but also help you to exclude some malicious and fraudulent plywood and MDF customers.
5、 Payment method
The simplest way is to avoid the loss of customized products from the payment method. Either 100% T/T or deposit+balance before delivery, but the proportion of deposit should at least cover your cost, so that even if the goods are abandoned, you will at least have no loss.
6、 Key points of the contract
For customized products, if plywood and MDF customers do not pick up the goods, they will often cause huge losses. If the plywood and MDF customers do not pick up the goods and do not pay for them, there is no way to collect them. You can neither get the money back nor sell the goods. Therefore, we must be careful and add a breach clause to the contract. Once the plywood and MDF customers abandon the goods for no reason, they will bear all the costs of your materials, processing, transportation, etc.
How to avoid abandonment?
- Try to choose plywood with good reputation to cooperate with MDF customers;
- Choosing a regular and professional freight forwarder can provide effective guidance at critical moments, minimize the possibility of abandonment or minimize the loss;
- Trade terms and insurance are also important. For goods to be exported with low value, try not to make DDU or DDP for plywood and MDF customers, and remember to buy abandonment insurance. For goods with high value, the other party must pay 50% – 70% in advance before shipment;
- We should know all the expenses in advance, such as demurrage charges and service charges at the port of destination, to prevent the cost from rising and urge plywood and MDF customers to abandon the goods.
How to deal with abandoned goods in the port of destination?
- The information about the first abandonment is generally obtained from the carrier. Once the foreign plywood and MDF customers confirm the abandonment, we will ask the carrier’s agent in the destination country to send a local abandonment operation process at the first time. Because different countries have different disposal methods and requirements for different products.
- Try to find other plywood and MDF importers in the destination country, and give appropriate discounts to dispose of the goods.
- If we cannot find other plywood and MDF importers to receive the goods, we can only choose whether to return the goods according to the value. We should note that in some countries and regions, even if the consignee abandons the goods, the consignor must obtain the written authorization of the consignee to return the goods. More often, the consignor will not choose to return LCL cargoes with low value.
