This article serves as a reminder to ISSA members of the considerations that should be made, when it is agreed to handle customers own goods. “Handle” may mean simply undertaking the last mile delivery, or undertaking a period of storage, or even undertaking some element of work to the goods. It might also involve customs clearance work. In all such cases, this work is outside the traditional scope of a ship supplier, and historically would have been undertaken by ships’ agents or freight forwarders. ISSA members are often perfectly positioned in the supply chain to undertake that work, and to do so more efficiently. ISSA members may charge less than an agent or a freight forwarder for the same task and can efficiently combine deliveries with the delivery of their own stores, reducing the costs of the “last mile”.

This work is becoming a core part of the service that some chandlers provide, and in some cases we have seen businesses pivot away from traditional ship supply and focus more generally on logistics services. However, it is important to understand that different risks arise out of what are essentially logistics services, and different expectations can arise from customers. Those risks must be carefully managed and correctly insured. It may be that in your country, different business licences are required before you can undertake such work. When you accept the task of receiving, storing and delivering goods (and possibly the task of arranging customs clearance) you do so as a professional, and are expected to discharge your duties with due “skill and care”. The precise extent of your obligation will depend upon the law of the contract and/or the law of the country in which you reside. However, in all cases you will be required to act professionally, and you may be liable for losses that arise from a failure to do so.

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"ISSA members may charge less than an agent or a freight forwarder for the same task and can efficiently combine deliveries with the delivery of their own stores, reducing the costs of the “last mile”."

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This will include the risks that the goods may be lost or damaged whilst in your care, or the risk of losses from a failure to deliver as instructed. Consider the situation where you are late with a delivery and miss the vessel or cause a delay in the vessel’s departure. Perhaps you take on the role of customs clearance but make an error that causes the goods to be seized, delayed or additional import duties or taxes imposed then a claim may be made against you. Claims arising out of customs clearance errors can be very large, and difficult to handle. In such cases, your customer is likely to turn to you with a claim for the losses that they have incurred. This may include “off hire” time for the vessel. As you will appreciate, these can quickly run to hundreds of thousands of dollars for the largest and most costly vessels. It is highly unlikely that the insurance arrangements that you may have had in place for your traditional work as a ship chandler will also cover you for the risks that arise when you provide logistics services and handle your customers own goods. It is crucial that you advise your insurance broker of the changing nature of your business activities and identify any gaps that may exist in your insurance coverage.

ISSA’s Conditions of Sale were updated, to include some important provisions that will serve to offer some protections and limits to your liability when undertaking such tasks. However, you should review the ISSA Conditions of Sale in the context of your own activities and consider whether they adequately protect you for the activities that you undertake. It is possible that if “logistics services” form a significant part of your business that you consider whether specialist logistics conditions should be incorporated, perhaps with the assistance of membership of your national logistics association. ISSA members who do not have their own “T&Cs” should ensure that they contract on the basis of the ISSA Conditions of Sale. To do so, it is ESSENTIAL that your customers are told, when the contract is formed, that the ISSA Conditions of Sale will apply. The easiest way to do this is to ensure that on every QUOTATION and on every email issued by your company that you state clearly:

All business and contracts undertaken or entered into by us is subject to the ISSA Conditions of Sale, available at https://shipsupply.org/services/conditions-of-sale/. It would be good practice to make a similar reference on your invoice and delivery notes. The protection afforded by the ISSA Conditions extend beyond the handling of third-party goods and provide many important provisions including those that will assist in cases of delayed or evaded payment. This column has repeatedly stressed their importance and will continue to do so.

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