LARGEST RISK FREIGHT FORWARD AVOID

    A very strong foreign company (hereinafter referred to as A) as middlemen, buying the goods from China. In the FOB price, then A signed contract with foreign clients for the sale of the goods to foreign customers. Then, A send a Tianjin freight forwarding company (hereinafter referred to as B) letter, asking them to help the goods of FOB shipping from the port of Tianjin to foreign ports. because of the container cargo, it need deliveried as soon as possible , so B have issued its own bill of lading; when the the goods transport to POD, B delivery the goods to the agent of A, after A pay for fee and freight, he can get goods and give B/O to B.

    View of the large volume, B agreed A company requirements, and at the beginning of time, A has always been a trustworthy company. When B company receiving the goods and issued the bill of lading, as B without ship, so he give the goods to the actual carrier (hereinafter referred to as C)  to transport. Meanwhile, B issue a Guarantee to waiver bill of lading issued by C, and delivery the goods.

    Therefore, the transportation process is that, domestic shippers (hereinafter referred to as D) give the goods to B, B issue bill of lading to D, then B deliver the goods to C, but does not require C issue bill of lading, and C delivery the goods to the agent of A in POD, then the agent of A send the goods to the foreign buyer of A. and A recover the bill of lading from D Department to give it to B, then the transportation process is complete.

    However, due to the Asian financial crisis, A meet difficult in the operation. So A sell all goods  at low prices to its foreign customers to recover the funds, but not to meet its sales contract signed with the D (do not pay ransom note). resulting D has neither received the money, nor the goods which has been taken away by buyer of foreign, and D’s loss is very heavy.

    In this case, D, after taking the bill of lading from the bank, had inn the domestic maritime court proceeded on the B (some cargo owner also proceeded on B and C ) Finally, Tianjin High Court and the Tianjin Maritime Court judge B compensate the loss of the goods by the reason of B delivery of goods without the B/O. meanwhile C does not issue bills of lading, is not at fault to the goods delivered without B/O.

    However, while the owner was in favor of domestic judgments, losses are not fully recovered. It is reported that due to a freight forwarding company had closed, D although get th successful e decision, it has not been implemented. Although another forwarding company has relatively strong  capabilities, but because of large amount of the the value of cases,the cargo owners fear domestic forwarding company is closed too, he had signed a conciliation agreement with the forwarding company in a very low settlement amount, the owner's loss is also considerable.u9

    Analysis:

    This type of case, whether for domestic shippers, forwarder or the actual carrier are left with a profound lesson, in order to avoid suffering a similar loss, the author of the Acting experience of dozen of such cases and put forward views for all parties under reference;

    1, For the domestic cargo owner, do not easily accept the F 0 B, which the is difference between FOB and CIF or C&F. Because as the FOB, carrier is designated by the foreign. And once a foreign make agreement with freight forwarders to call on foreign goods, the cargo owner can not control the goods , but also claim damages from freight forwarding company. And it is large risk. If freight forwarding company is not strong,, the domestic owner's loss is very heavy.

    If cargo owner have to accept FOB price, it should strive to contract with larger shipping companies as carrier to avoid risk. Because, as shipping companies, such as COSCO, China Shipping, shipping companies and others, all have strong strength and more strict management system, and it is generally not prone to problems. Even if there is a problem, they are relatively easy to solve it.

    2, As freight forwarding company, who issued their own bills of lading to actual carrier and  entrusted to call on, we must be careful. If the commission customer is not strength, and good reputation, we must not accept this kind of operation method. Because when issued its own bill of lading, it is necessary to bear their own risk. Once the goods are released to the Client's agent in the foreign POD. the forwarding will completely out of control on goods. And the few hundred dollars freight, compare with ten thousand dollars or hundred thousand dollars is so small.

    If you have to do this operation, the freight forwarding, we must appoint our own agents on foreign POD but not the agent of Client. If freight forwarding agent is appointed, he will naturally want to hear forwarding instructions. If there are problems, forward can order the agent not to delivery the goods, or require foreign customers to guarantee. If forward use the commissioning party's agent, the goods is completely out of control. In addition, developing several years, the forwarders already have a considerable scale, and if they are closed by several cases, it will be a pity. So freight forwarding company should have the concept of risk transfer. According to the author to understand, Tianjin people insurance cover the liability risk of non-vessel carrier. Although, it can increase the cost, when the company reaches a certain scale, risk transferring must be considered. Take the liability risk increase the costs, but it is useful for the image of the company.

    3, although in the present case, as far as I know the actual carrier (that is, assume the task of shipping cargo company) are not liable, but I still think that the actual carrier should still be vigilant. Because, in practice, when the forwarding book space, they general pass booking note to  the actual carrier directly, and ask them follow this note issue B/L. Then forwarding send a copy  B/L changing consignee and consignor to carried to make bill, then cover chapter of “shipped on board on copy B/L, and send it to agent of forwarding to take goods from the agent of carried.

    Therefore, the actual carrier should be noted that:

    First, ask the forwarding can not used forwarding order as booking note, and order the forwarding change the consignor as forwarding. Because under Chinese law, the trustee must service the client. So the forwarding must be sign on booking note, and seal on it. If the cargo owner is sign on booking note, the carried must accept the order of owner to call on delivery goods, and in fact it is not done.

    Second, carried must require forwarding provide electronic release notification.In this notice, the freight announce giving up the rights of the original B/L, and should indicate consignee details name who the goods released to. Because if there are no detail name on the electronic release notice, and set the booking note is not written a freight forwarding, the carrier may cause the delivery of goods improperly. because at this time, the actual carrier received instruction from who will became a problem.

    Third, carrier must pay attention to the consignee consistent with the name signed on copy B/L, and keep the record of delivery goods. Because as the actual carried, the ship owner is obliged to prove that he delivery the goods to the consignee ordered by forwarding. while in court, if the freight said the consignee don’t receive the goods, the actual carrier must prove that the goods have been received, or could be sentenced to bear the responsibility.