Freight forwarders and importers to be warned over potential free hand shipment losses

Recently, the increasing acceptance of  “free hand” container shipments in the freight forwarding industry, have resulted in increased liabilities for independent freight forwarders and potentially their clients (the importer) in certain situations.

In these cases, the receiving forwarder, for a,small fee, takes control of the paperwork at the discharge port for the cargo to be released to the consignee, the benefits being to secure inland delivery or the opportunity to gain new business.  This arrangement is called freight on board, or free on board (FOB), where the exporter delivers the goods to the vessel, arranges loading, securing and protection of the cargo.   However, if the shipment is abandoned upon arrival and the consignee’s name is not on the bill of lading, then the freight forwarder is left to pay demurrage, removal and other costs.  Reasons for abandonment can vary but can include the shipment arriving after it was required, or the goods being illegal.

In some circumstances, there can be flow on effects to importers.  Martin Moyano, Director at Clarke Global Logistics, said that ”if a shipment is organised by an exporter and their agent, they can significantly overcharge the importer, leaving them to decide whether to abandon the cargo or paying more than they budgeted for.  So, for importers, on freight prepaid, always ensure that the supplier is using a reputable freight forwarder, ideally at destination.”

For forwarders, the warning signs for possible abandonment on FOB shipments are low-value cargo, second-hand heavy cargo – taking large risks for a small fee.  It is very important for forwarders to verify a consignee’s credibility.

To read a recent article with more actual cases on this topic, click on  http://theloadstar.co.uk/alert-forwarders-high-financial-risks-accepting-freehand-shipments-small-fee/

In the meantime, for our importers, if you have any questions about your shipment, please feel free to contact the team at Clarke Global on 9854 3000 or send us an email enquiry@clarkeglobal.com.au

Photo by darkday.