Port omission: when the carrier discharges your container at another port

The ship sailed, but it is not coming to your port

A Birmingham auto-parts distributor is tracking two 40-footers from Ningbo, bought CFR Felixstowe. Ten days out, the carrier emails: the vessel will omit Felixstowe because of congestion, UK cargo will be discharged at Rotterdam, and onward carriage will be “for the merchant’s account and risk”. The Chinese supplier says it has done its job. So does the carrier. What is left is the importer, a relay invoice and a question nobody had asked: who pays for a port you never chose?

Port omissions became a routine scheduling tool after 2021 — Felixstowe congestion, the Red Sea diversions from late 2023, repeated pile-ups at US West Coast and South Asian gateways. For an importer, three things decide the outcome: how the carrier classifies the omission, which bill of lading clause it relies on, and how customs treats the new port of arrival.

Schedule omission or end of voyage: the split that decides the bill

A carrier can skip a port to recover its schedule and then feeder the boxes back to their destination. The bill of lading has not changed, so the carrier still owes delivery at the named port. Or it can declare end of voyage at the alternative port, relying on the liberty clause: delivery there counts as complete, and everything after it falls outside the contract.

The first is the common response to delays; the second shows up in crises such as prolonged congestion, conflict or port strikes. It is not abusive in itself: in Renton v Palmyra (1957) the House of Lords upheld discharge at Hamburg of cargo bound for London during a dock strike under such a clause. An omission also differs from a rollover, covered in our guide to rollovers, where the box never left the quay.

Who pays: the “merchant” clause and the Incoterm gap

When a carrier declares end of voyage, it bills on-carriage, transshipment handling and storage to the “merchant”. Bills of lading define that word broadly — shipper, consignee, holder and owner of the goods — and make them jointly and severally liable. In practice the carrier collects from whoever wants the cargo, which is the importer, and holds release until paid.

The Incoterm does not settle it either. Under CFR or CIF, the seller delivered at loading, and costs relating to the goods in transit until arrival at the destination port fall on the buyer unless they were for the seller’s account under the contract of carriage (Incoterms 2020, B9(b)). If the carriage contract itself puts those costs on the merchant, the buyer will struggle to recover them. How carriers stitch relays together is explained in our guide to transshipment and feeder services.

The new port at customs: entry, value, origin

United States. A box for Oakland discharged at Los Angeles can be entered at LA or moved in-bond to Oakland; CBP’s in-bond rules (19 CFR part 18) require delivery within 30 days. International freight is excluded from transaction value when identified separately (19 U.S.C. 1401a(b)(4)(A)), and inland freight after arrival is not dutiable, so the relay costs no duty.

United Kingdom and India. Both value imports on a CIF basis to the place of importation. A Rotterdam–Felixstowe feeder or a Colombo–Chennai relay paid by the importer is transport before arrival, so it enters the dutiable value. India’s Customs Valuation Rules 2007 (rule 10) add freight actually incurred; if it is not documented at all, a notional 20% of FOB value applies instead.

Preferential origin. Most trade agreements require goods passing through a third country to stay under customs control there, with no operation beyond unloading, reloading or preserving them. Keep the alternative port’s documents; without them a preference claim can be refused.

Three worked examples

Relay prices, storage and duty rates below are working assumptions in line with observed ranges; check them for every shipment.

Example 1 — Birmingham, end of voyage at Rotterdam. Feeder Rotterdam–Felixstowe at $600 per 40-footer: $1,200 for two. It is freight before UK arrival, so it is dutiable. At a 4% duty rate (check the UK Global Tariff for the actual line): $48. Import VAT at 20% on $1,248 is $250, accounted for through postponed VAT accounting. Real cost: $1,248, plus about a week.

Example 2 — Oakland cargo discharged at Los Angeles. Two 40-footers, each about 42,000 lb gross, well under the 80,000 lb federal road limit with tractor and chassis. Trucking LA–Oakland at $1,400 per box: $2,800, plus about $150 for the in-bond filing (assumption). Duty effect: $0. The cost is real — over 5,000 units, $0.59 each — but it does not compound.

Example 3 — Chennai cargo ending at Colombo. The carrier declares end of voyage in Colombo. Feeder Colombo–Chennai at $700 per 40-footer: $1,400 for two. Basic customs duty at 7.5%: $105. Social welfare surcharge at 10% of that duty: $10.50. IGST at 18% on $1,515.50: about $273. Total outlay: about $1,788, of which IGST is normally creditable. More on Indian clearance in our guide to importing into India.

Contract, insurance and first moves

In the sales contract. Under CFR or CIF, state that the price covers “carriage to the named port of destination, including any relay made necessary by a port omission”. Silence favours the seller.

In the insurance. Institute Cargo Clauses (A) 2009 keep cover alive after an early end of voyage if you notify the insurer promptly and accept any additional premium (clause 9). Cover then runs until sale at the alternative port, up to 60 days after discharge, or to destination if the cargo is forwarded within that time. Forwarding charges (clause 12) are only paid when the interruption results from an insured risk. Our guide to cargo insurance covers these clauses.

When the notice arrives. Ask in writing whether the carrier is relaying at its cost or declaring end of voyage, the discharge port and date, free days there, and the relay price. Benchmark it with a local forwarder — you are not obliged to buy the carrier’s feeder. Then tell your customs broker, so the manifest, entry or in-bond and declared value follow the new port.