21 September 2010

Forwarding and Honesty

The Importers Institute receives a regular stream of complaints about freight forwarders. Sadly, they are often justified. Some forwarders' charges are outrageous.

Take the case of POTA Global Management NZ Ltd, a division of P&O Trans Australia. We have earlier reported a scam operated by POTA's agents in China, where freight ends up being collected at both ends. When threatened with Court action, POTA promptly refunded an importer for a fictitious "China Surcharge" but continues to charge it to other importers.

That is not the end of it. A recent invoice from POTA included a "bio-security fee" of $18, a "compliance fee" of $36 and a "port security fee" of $36. These fees all have something in common: they are a figment of POTA's imagination. They don’t exist. They are made up. They are devices to extract money from importers under false pretences.

Those fees apply in addition to delivery order and administration fees of $50 and "port service charges" of $70 per m3.

Another forwarder, Agility, recently agreed to pay a fine of US$600 million to the U.S. government for overcharging the military on supply contracts in the Middle East. The Arab-owned company (with a subsidiary in New Zealand) was black-listed from future US government contracts.

The Commerce Commission has filed proceedings in the High Court in Auckland against a number of prominent local forwarders, alleging price collusion. The forwarders involved are Schenkers, BAX Group, Kuehne & Nagel, Panalpina, EGL and Geologistics. The Commission said, "Agreements between competitors to fix, control or maintain prices distort the normal forces of competition and keep prices artificially high".

Our advice to importers is that they should always seek a full quote from forwarders, including destination charges. If you have been ripped off by a forwarder, we suggest that you take the matter to the Disputes Tribunal and forward copies of the invoices to the Importers Institute (in confidence). We will continue to expose dubious practises to the disinfectant of sunlight.

6 comments:

  1. I know the folks at Pota quite well, and that sort of behaviour doesn't suprise me.

    I was astounded to hear that Agility are the logistics providers to the NZ Commonwealth Games team.

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  2. its about time someone that controls lcl boxes of their own took a stand an these charges , especially on the transtasman where I have seen charges triple what they charge to their big forwarder customers charged to importers brokers

    the real cost is only about 20 dollars a meter not 50!!!!!

    ReplyDelete
  3. Hi, the problem with lcl/fak groupage is that we have to pay a rebate per m3 to our agents and that can range from USD 50 to USD 75 per m3.

    So, just in case you think that the local forwarder is getting rich at youe expense, that is not the case.

    As a suggestion, NEVER let your suppliers send you LCL on a CIF basis, as you will get stung here in NZ with horrible local charges, Always buy FOB, then you can negotiate with your forwarder as to the local charges here in NZ.

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  4. You don't *have to* pay rebates to Chinese forwarders, swindling New Zealand importers by charging for freight at both ends. As a forwarder, you are free to refuse to participate in the swindle (many do) but, if you decide to cash in on it, don't be surprised with the consequences.

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  5. Just received an invoice for a free hand shipment coming thru Ecu line for one of my customers :

    PSC NZD 98.50 per w/m

    D/O Fee NZD 75.00

    Forestry NZD 25.00

    Admin Fee NZD 30.00

    Security Fee NZD 25.00

    Shipping Lin Doc fee NZD 55.00

    VBS NZD 6.00

    Security Surcharge NZD 25.00

    For 1.2m3/366kg !

    ReplyDelete
  6. well if you were any good at what you do daniel silva why dont you rout the cargo for your consigness yourself and set up for own FAK service ex China, why dont you??

    question for you....

    if this is a rip off why does the consignee in New Zealand pay for it.

    Are you sure you know what your talking about????

    ReplyDelete

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