In the 14 years I’ve spent working in International Freight, I’ve come across my fair share of dodgy overseas suppliers, but the most common scenario is Importers being slogged with huge charges at port of discharge after being promised “Free Freight” by the supplier.
The world of LCL Seafreight is complex, and often confusing, and I would often be on the receiving end of angry importers who didn’t understand what they had agreed to. After spending time working as a wholesale freight forwarder, I learnt the art of consolidation and discovered the challenge of filling a full container of FAK (Freight all kind) cargo and making a profit. NVOCC’s (Non Vessel Operating Common Carriers) often offer incentives, or kickbacks to customers who ship cargo through their services. In some cases, pre-paid freight rates are even free, and in extreme circumstances the forwarder will pay you for cargo… But there’s a catch.
Nothing in this world is free as I like to say. The cost to move a cubic metre of cargo is still ‘X’, and that doesn’t change because somebody is offering the freight to Port for free. For the service provider there is a cost to pack, ship, and unpack the cargo at the other side, and unfortunately for the Importer, the cost to move this cargo just gets re-allocated/invoiced to you. While your supplier gets a great deal from their mates at origin, you get a raw deal at the other side and end up footing the entire bill for importing. To top it off, CIF/Prepaid shipments get treated badly by the destination agent. There is no incentive for them to keep you in the loop of the whereabouts of your shipment, and often you’re left scrambling to organise the customs clearance/paperwork with little to no notice as well as receiving astronomical charges for the privilege.
So what is my advice?
Take control of your cargo. Demand FOB terms. This way YOU get to dictate the costs, the freight forwarder you use, and the schedule. Often with FOB terms you also get a much better service in terms of order tracking/customer services from your forwarder. You know roughly how much it will cost before it lands, and you can organise pre-clearance with your broker ahead of time. To me it’s a no brainer.
If you are looking for more helpful tips about importing, feel free to check out our ‘Help and Advice’ section.