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HomeDocumentationWhat is a High Seas Sale..??

What is a High Seas Sale..??

A High Seas Sale (HSS) is a process that occurs often in global shipping and trade and as the name implies, this happens when goods are sold in transit when it is en route from the port of loading to the port of discharge..

These sales are executed between the original parties (shipper or consignee) listed in the Bill of Lading and a new buyer while the goods are still en route..

High Seas Sales significantly contribute to the agility of global trade operations as it reduces the need for additional storage, handling, and transportation..

This provides a cost-effective solution for businesses looking to adapt quickly to changing market demands driven by geopolitical tensions situations which may necessitate changes in trading partners etc..

This process can also lead to tax efficiencies and maybe tariff implications, as the sale occurs outside the territorial jurisdiction of certain countries, thus not incurring local sales taxes under specific conditions..

HSS underscores the versatility and economic efficiency that it brings to international trade, enabling goods to be redirected as market conditions dictate without the constraints of geographical boundaries..

Logistical and Regulatory Considerations

The execution of a High Seas Sale however requires meticulous planning and adherence to logistical and regulatory requirements..

From a regulatory perspective, the laws governing high seas sales vary from one country to another, making it imperative for the parties involved to be well-versed with the legal requirements of the countries of origin, transit, and destination..

From a documentary perspective, due care and diligence must be taken as all documentation must be redrafted to reflect the latest sale transaction and parties involved..

Critical trade documents such as Commercial Invoices, Packing Lists, Bills of Lading, Test Certificates, etc will need to be changed to the name of the new buyer, and in the case of a bill of lading, it may require the issuance of a switch bill of lading to reflect the new buyer or ensure that the endorsements on the bill of lading are validated as required depending on the type of bill of lading issued..

From a logistical standpoint, the carrier must be promptly informed about the change in party details following the HSS agreement as they may need to send arrival notifications to the correct parties and also ensure the proper manifestation of the goods with customs at the destination to facilitate smooth customs clearance..

It is also essential for all parties involved in High Seas Sales to maintain a clear record of the transaction, including any previous title transfers if the goods have been sold multiple times during transit..

This audit trail is crucial for customs verification and for establishing the chain of ownership, especially for the final buyer aiming to clear the goods upon arrival..

Challenges and Best Practices in High Seas Sale

Navigating HSS can be complex and requires a deep understanding of international trade laws and customs regulations.. Parties engaging in HSS must ensure that all contractual and documentation aspects are meticulously handled to avoid customs delays, penalties, or other logistical hurdles..

Furthermore, transparency between parties, along with the proper endorsement and handling of shipping documents, is crucial for the smooth execution of High Seas Sales..

Sellers and buyers must ensure that all agreements and endorsements are correctly dated and executed to reflect the transfer of ownership and to comply with customs regulations in the destination port..

Another significant challenge is the risk of fraud and misrepresentation.. Since the transactions occur while the goods are in transit, there is a heightened risk of fraud due to the lack of physical verification of the goods by the new buyer..

This underscores the importance of due diligence and the need for buyers to work with reputable sellers and shipping companies..

Conclusion

High Seas Sales represent a dynamic and strategic element of global trade, offering businesses the flexibility to respond to changing market demands while goods are in transit..

By understanding and leveraging the mechanisms of HSS, companies can enhance their supply chain efficiencies, reduce operational costs, and navigate the complexities of international trade with greater agility..

As global trade continues to evolve, the role of High Seas Sales in facilitating efficient and adaptable supply chains will undoubtedly grow, reinforcing its importance in the international business landscape..


Article republished after critical updates

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Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..

44 COMMENTS

  1. Dear Team,

    Kindly support to clear below,
    * Hope BL endorsement enough by consignee ( On BL) to the HSS buyer
    * Can we use the same invoice for the CUSTOMS clearance?
    * In case BL consignee don’t like to disclose that value , what is the next option? Can he issue the new invoice under his letterhead for the clearance?
    * What are the advantages and disadvantaged from the both of them point of view?

    Thanks.
    tharaka1008@gmail.com

  2. Dear all thanks very much for the inputs I have a query in case of high sea sales of the importer dont want to share the original price or the import invoice what is the alternate document to be issued. Is that possible in the 1st place

  3. Is it allowed to close a deal by concluding price and finance terms before shipment and make it high sea sales after shipment. Means, the buyer arranges delivery order to local dealer in January, shipment happens in February and the goods are sold to the buyer in February. Is this allowed under HSS

  4. Hello, Sir! In the case where the shipping company bill is issued in the name of the original importer but the BoE and HSS agreement is in the name of the HSS buyer, will the HSS be valid? Kindly answer

    • If the bill is issued in the name of someone, it is a STRAIGHT BILL OF LADING which is non-negotiable and non-transferable, so it cannot be endorsed to the HSS buyer.. If there is such plans then it is better to issue as a TO ORDER Negotiable bill so that it can be transferred..

    • Yes. Bill of Lading should be endorsed in favour of H.S.Buyer well before receipt of the goods at destination to fall in HSS.

  5. Dear Sir.,,
    If the buyer changed after HSS & IGM filed on on first buyer but container not discharged at POD. Is there any chance to transfer the same HSS to another buyer? Like transferred High Sea Sale agreement?

    • Yes. But the same to be done well before the goods arrival at port of destination. Port of destination includes both sea port and airport.

    • Simple answer is ‘NO’ HSS Agreement must be done prior to flight landing at destination. Otherwise it will not be HSS at all. Original sellers Invoice, Bill of Lading, Packing List etc should be ‘ENDORSED’ in favour of HSS Buyer and IGM should be filed by the carrier in the name of HSS Buyer well before arrival of the goods at destination port or Airport to make it a HSS.

  6. dear sir

    i am parveen yadav from haryana , i am working in company my issue is that our company do high sea sale . can we raise invoice in sale invoice series or raise other series

  7. In respect of High Seas Sale, can there be different countries involved? e.g. Original shipment from India to Singapore, can this be diverted high seas to Myanmar? Would the shippling line object to the COD(change of destination) request, if we disclose such high seas sale prior to the original shipment?

  8. I am trying to know about HSS risk, insurance, ownership are transferred from seller to final buyer? Who should carries the costs of overheads till completion of dealing of HSS.

  9. by reading of the nature of high sea sales, I presume it can be done only if it is an FOB IMPORT. SINCE IN CASE OF CIF IMPORTS PROPERTY IN GOODS PASS TO BUYER ONOY AT PORT OF LANDING, HENC HE HAS NO OWNERSHIP OF THE SHIPMENT FOR SELLING IT HIGH SEAS. PLS. CONFIRM this view!

  10. Can we give and commercial invoice before the ship sails.
    Can I do HSS on same day the ship sails.
    Can HSS be disallowed if date of issuence of B/L is later than date of shipping.

  11. here i would like to clear that high seas sales are considered only if goods have not crossed the custom barrier of the country and before the custom clearance of the goods are transferred to buyer and buyer will clear the shipment from the custom no matter goods has come through air of seas, for that both party will sign a agreement of high sea sale and on the basis of that buyer can clear the shipment from customs of the country. format of the agreement of high sea sale can be obtained from internet and need to be filled in the a stamp paper and stamp paper.

  12. Good Day All,

    I am trying to understand everything on a HSS. I am however not sure when risk, insurance, ownership are transferred between initial seller and buyer, and next final buyer? Who carries which costs till which point?

    Any help will be much appreciated.
    Kind regards,
    Tenille

    • Hi Abhishek, i have limited knowledge of Air cargo.. But irrespective of the mode of carriage, i suppose this should be a possibility.. Maybe one of the other readers with a bit more experience with air cargo can assist..

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