Page 15: of Marine News Magazine (September 2026)

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custody of cargo also assumes liability for loss, damage, or delay while the car- go is in its care, which is distinct from the NVOCC’s carrier liability under its bill of lading. Agents should model cash-? ow exposure, establish consignee credit limits, negotiate contractual pro- tections allocating non-payment and ancillary charge risk, con? rm cargo le- gal liability insurance covers destination agent activities across all custody modes, verify adequate policy limits, and estab- lish clear indemni? cation provisions and claims-handling protocols.

Transition Planning.

When a foreign NVOCC seeks a new destination agent, the timeline is fre- quently compressed, with active service commitments for cargo that is in tran- sit. This urgency creates compounding risks, including incomplete due dili- gence on the principal’s regulatory status and ? nancial health, ambiguous con- tract terms, insurance gaps, inadequate systems for tracking receivables and payments, and tariff compliance errors.

Best practice dictates that agents resist timeline pressure and insist on adequate diligence, proper documentation, and system readiness before accepting such responsibilities. A phased transition be- ginning only with new bookings can signi? cantly reduce risk.

Conclusion.

Destination agent arrangements can be commercially attractive, but companies should approach them with structured diligence that address agent-principal status, FMC registra- tion veri? cation, tariff and service contract compliance, freight collection economics, ancillary charge allocation, cargo insurance adequacy, and transi- tion planning. With a clear-eyed view of the regulatory landscape, these ar- rangements can be structured to ben- e? t all parties while maintaining com- pliance with the Shipping Act.

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