How to Define the Responsible Entity and Process for Goods Damage During Transit Trade
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I am a trader engaged in Southeast Asian transit trade. Last month, a batch of hardware accessories shipped to the Netherlands was wetted due to improper operation by port staff during unloading and container transshipment at the Singapore transshipment port. 30% of the goods were rusted and could not be delivered.
The foreign buyer has filed a claim. I only have the ocean bill of lading and the goods damage record from the transshipment port. I don't know whether to handle customs declaration first or contact the insurance company. I also don't know if the tax refund for the damaged goods can be processed normally, or if it will affect the compliance of subsequent transit business. I'm completely confused now.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
First，it is necessary to fix core evidence immediately: the official goods damage inspection report from the transshipment port，original packing list，full set of ocean bill of lading copies，and insurance claim filing receipt. These are the core basis for subsequent liability pursuit，customs declaration adjustment，and tax handling. For goods damage liability in transit trade，it is necessary to first distinguish between the carrier，warehousing party，and ownership of goods. If the damage is caused by port operation errors，a claim letter should be submitted to the maritime authority of the transshipment port and the acceptance receipt should be retained. If cargo insurance has been purchased，online claim filing should be completed within 48 hours to obtain the claim acceptance number.
Next，adjust the customs declaration process: The electronic declaration system for transit trade at Shanghai Port was upgraded in 2026. If the damaged goods have not entered domestic circulation，log into the system to submit the "Statement of Transit Goods Damage" and inspection report，apply to modify the original declaration data，and mark the damaged part as "Disposal as Waste" or "Buyer's Self-handling" to avoid triggering customs control due to inconsistent goods status. If the damaged goods need to be returned to China，return customs declaration procedures should be handled in advance，and a written statement of the buyer's waiver of goods ownership should be provided to avoid additional import duties.
Regarding tax refund handling: According to the new cross-border tax refund regulations in 2026，if transit trade goods are damaged and foreign exchange collection is not completed，there is no need to directly void the original tax refund declaration. You can submit the "Application Form for Extension of Export Tax Refund (Exemption) Declaration" to the competent tax authority，keep the goods damage certificate and insurance claim settlement voucher，and complete verification after subsequent foreign exchange collection or claim payment arrives. If the proportion of damaged goods exceeds 20%，you can apply for partial tax refund adjustment and only process the tax refund for the intact delivered goods.
Finally，it is necessary to complete the compliance closed loop: Sign a supplementary agreement with the buyer in a timely manner to clarify the liability division and disposal method of the damaged goods. Simultaneously update the packaging scheme for the transshipment link，add moisture-proof cushioning materials and moisture absorbers. In 2026，international maritime transport has mandatory requirements for transshipment goods packaging to have breathable and moisture-proof design to avoid similar problems from happening again. All communication records and documents should be retained throughout the process to ensure every operation is traceable.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
For customs declaration adjustment of damaged transit goods, it is necessary to first confirm whether the originally declared transit trade has completed customs filing. If the goods have not actually exited the country, you can directly apply to cancel and re-declare through the Shanghai Port transit electronic declaration system, with the remark "Partial Goods Damage", no additional approval is required.
If the transshipment declaration has been completed, submit the "Statement of Goods Damage" and third-party inspection report to the customs, apply to modify the declaration data, and adjust the status of the damaged goods to "Waste".
In 2026, the customs has launched the electronic verification linkage mechanism for transit goods. If return disposal is involved, a temporary disposal application must be submitted to the transshipment port customs in advance, and container unloading or destruction can be arranged only after obtaining permission.
At the same time, check the damage endorsement on the bill of lading to ensure it is completely consistent with the declaration data, otherwise you may face customs valuation queries or even be identified as false declaration. If the damaged goods need to be handled by the buyer themselves, a statement of the buyer's confirmation of waiving goods ownership must be provided to avoid subsequent ownership disputes.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
After transit goods are damaged, first confirm whether the container seal is intact. If the seal is damaged, contact the carrier and transshipment port authorities immediately to confirm whether the goods damage involves the carrier's liability.
If the seal is intact, check whether the goods packaging complies with the new regulations for transshipment packaging in international maritime transport in 2026. If the goods damage is caused by non-compliant packaging, you need to bear the responsibility yourself.
Next, adjust the transportation plan. If the proportion of damaged goods is not high, you can prioritize the shipment of intact goods, and leave the damaged goods in temporary storage with the transshipment port warehousing party. At the same time, apply to the carrier for an extension of the free storage period, which can be extended up to 14 days to reduce container detention costs.
If you need to replace the container, contact the transshipment port container yard in advance to confirm available containers and replacement costs, and apply to the carrier for modifying the bill of lading information to ensure the goods ownership is consistent with the declaration data. In addition, calculate all additional costs and retain vouchers for subsequent claims.
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
For tax handling after transit trade goods damage, two core scenarios need to be distinguished: If the goods have not entered the domestic market and are only damaged in the transshipment link, according to the new cross-border tax regulations in 2026, you can apply for exemption from VAT and additional taxes by submitting the goods damage certificate and insurance claim settlement voucher to the competent tax authority. If the goods have been returned to China, you need to pay duties and VAT as imported goods, and you can apply for import VAT deduction at the same time.
If you have purchased export credit insurance, the claim payment can be regarded as non-operating income and must be truthfully reported in the corporate income tax declaration. Note that the tax refund declaration for transit trade must be completed within 90 days after the goods actually exit the country.
If you cannot declare on time due to goods damage, you need to apply to the tax authority for an extension in advance, which can be extended up to 180 days. In addition, retain all tax documents related to goods damage for subsequent inspection to avoid tax risks.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
For foreign exchange collection and payment compliance after transit trade goods damage, first confirm the liability division clauses in the contract. If the contract clearly specifies the responsible party for the transshipment link, provide relevant certificates to the payer in a timely manner and adjust the foreign exchange collection amount.
If insurance claims are involved, ensure that the collection and payment of claim funds comply with CIPS or SWIFT compliance requirements to avoid abnormal capital flowback.
In 2026, China's cross-border foreign exchange collection and payment supervision system has been upgraded. If there is a delay in foreign exchange collection due to goods damage, submit the "Statement of Goods Damage" and inspection report to the bank in advance to explain the reason for the delay and avoid being classified as an abnormal transaction.
In addition, check the title transfer time of the bill of lading endorsement to ensure that the foreign exchange collection and payment time is consistent with the title transfer time to avoid compliance risks. If third-party claims are involved, make payments through compliant channels and retain payment vouchers for verification.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
For legal risk prevention after transit goods damage, first check the liability division clauses in the trade contract. If the goods damage is caused by port operation errors and does not fall into the category of force majeure, you can file a claim against the carrier or warehousing party.
If the liability division is not clearly specified in the contract, negotiate with the buyer to sign a supplementary agreement to clarify the handling method and liability bearing of the damaged goods.
If the buyer files a claim, provide the goods damage inspection report and liability certificate to avoid being identified as a breach of contract. If title transfer is involved, ensure that the endorsement of the bill of lading complies with the requirements of the Hague Rules to avoid ownership disputes.
In addition, consult a professional lawyer to draft the claim letter and supplementary agreement to ensure all legal documents comply with the latest requirements of international trade law in 2026 and avoid subsequent legal litigation risks.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
For on-site inspection response after transit goods damage, first confirm the inspection notice from the transshipment port. If the customs requires inspection of the damaged goods, arrange a freight forwarder or customs broker to accompany in advance to ensure the inspection process complies with norms.
If the goods are severely rusted, provide a laboratory report from a third-party inspection agency to prove that the goods have lost their use value to avoid being required to return or pay back duties.
If container unloading inspection is involved, take protective measures in advance to avoid further damage to the goods. If the seal is found to be damaged, explain the situation to the inspection personnel in a timely manner and provide the seal damage certificate issued by the carrier.
In addition, check whether the quantity of goods after inspection is consistent with the declaration data. If there is a discrepancy, explain the reason to the customs in a timely manner to avoid customs detention or administrative penalty.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
For packaging rectification after transit goods damage, first analyze the cause of the goods damage. If rust is caused by moisture, replace the moisture-proof packaging materials, such as using vapor-phase rust inhibitor film and food-grade desiccant, and add a cushioning layer to avoid collisions during loading and unloading.
In 2026, international maritime transport has added ventilation hole standards to the packaging requirements for transshipment goods. Ensure the packaging has sufficient ventilation holes to avoid internal condensation.
If the goods are metal products such as hardware accessories, use galvanized iron sheet packaging and add a moisture-proof coating, and install moisture absorbers in the container. In addition, prepare an MSDS for the packaging to ensure it complies with the requirements of international maritime dangerous goods packaging (if applicable).
If you need to replace the container, choose a new container that meets ISO standards to avoid goods damage caused by the container's own damage. At the same time, conduct sampling inspection on the rectified packaging to ensure it complies with the new regulations.