A freight hold refers to a pause placed on a shipment for a variety of potential reasons and by a number of possible parties. In many circumstances, the hold is instituted due to unpaid fees, but in some, it may relate to a customs inspection or document issue. A few top reasons for a freight hold include:
- Unpaid terminal fees
- Demurrage
- Incomplete or illegible documentation
- Statistical validation
- Customs commercial enforcement
- Customs vehicle and cargo inspection system (VACIS)
The goal of every shipper and freight broker is to get loads to their destinations on time, so it's important to understand why freight holds can occur and address potential issues before a hold takes place.
Why is cargo on hold?
Often, cargo is on hold due to unpaid fees. Sometimes that freight hold can be cleared through the carrier or freight broker, other times, fees must be paid directly to a terminal. For instance, demurrage - a charge assessed when cargo is left at the terminal beyond the allotted free time - in most cases should be paid to a steamship line. Other fees, like TMF - traffic mitigation fees - when cargo travels through the Ports of Los Angeles or Long Beach, or gate fees - assessed for cargo traveling through locations such as the Port of Oakland - may need to involve the terminal. Known/expected fees are typically built into BOLs (bills of lading), but other unexpected fees could arise relating to delivery issues, congestion, storage, etc.
Another reason cargo is on hold relates to documentation. If cargo is not traveling with its manifest or BOL - or these documents are incomplete or unreadable in some way, a hold is likely to occur. If those documents are not properly endorsed and all charges not paid, the carrier may place a hold as well. Even if no documentation is actually missing, a freight hold may be instituted if there appear to be discrepancies between the amount/type/weight of cargo listed on shipping documents versus what's actually being transported. Any missing documentation can then lead to unanticipated fees such as demurrage noted above, so this can have a snowball effect.
What is a customs hold?
A customs hold refers to a hold placed on international freight by Customs and Border Protection. Customs may institute a hold on cargo based on incomplete or missing documentation, discrepancies in documentation, random inspection, and when freight is flagged through the vehicle and cargo inspection system (VACIS). As mentioned above, having complete and correct documentation is important for any freight, but especially when it comes to clearing customs. Any issues relating to the manifest or bill of lading can cause a customs hold. Additionally, if there is incomplete documentation regarding product safety, copyright, or trademark issues, customs may institute a commercial enforcement hold until this information can be verified. Other examples of key documentation include detailed content descriptions and correct product tariff codes.
In a VACIS hold, customs runs cargo through an X-ray to catch contraband. This will both take time for the scan itself, and can lead to longer hold time if anything suspicious is identified. Somewhat relatedly, the Food and Drug Administration (FDA) or U.S. Department of Agriculture (USDA) may place holds on certain types cargo to verify their standards are met. For instance, the USDA's Agriculture and Quarantine Inspection Service (AQIS) is on the lookout for invasive animals, plants and diseases.
As mentioned throughout, one freight hold issue often leads to another, so to keep your freight moving smoothly along the supply chain, it helps to have experts involved. At InTek, we can help. Let us know your shipping needs, and we'll be happy to discuss how our knowledge and connections can ensure a worry-free cargo movement.
Interested in learning more about this and other freight & logistics topics? Check out our Learning Center for more definitions of logistics terms and in-depth information about all things freight and shipping. Or you can start with these links below:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions
