Shipping and Logistics Fraud
Question – Destination agent held goods for ransom to collect origin charges when freight was prepaid. Who is responsible?
I will refer to the 4 parties as follows.
Shipper – My Hong Kong registered company
Shenzhen Agent – The booking agent to whom I prepaid the freight
Shanghai Carrier – The Shanghai NVOCC who issued the BL
Panama Agent – The agent named for delivery in the BL (in Panama but place of delivery is Santo Domingo, DR)
Dominican Agent – The local agent at destination (place of delivery specified in BL). I booked ocean freight from Shenzhen to Santo Domingo via Colon Free Zone and prepaid the freight to Shenzhen Agent. Shenzhen Agent gave me a set of original BLs issued by Shanghai Carrier. BLs were marked freight prepaid, port of loading Shenzhen, port of discharge Colon Free Zone (Panama), place of delivery Santo Domingo, F/Agent name for delivery “Panama Agent.”
When the container arrived Dominican Agent held the container for ransom to collect charges in excess of USD $2,200 billed as “Cargo De Origin” in Spanish, which means “charges from origin” in English. This is in addition to the approx USD $800 of actual destination charges. Dominican Agent told the consignee they need to ask Shipper (me) to ask Shenzhen Agent to issue a credit note to Panama Agent who will then issue a credit note to him and he will then refund the origin charges back to consignee. Shenzhen Agent doesn’t admit to asking for any origin charges and I have no proof that these charges were collected on their behalf or the behalf of any other party. Dominican Agent says he is only invoicing what was invoiced to him from Panama Agent although he will not show any proof of this. Shanghai carrier says the problem needs to be solved with Shenzhen Agent, it has nothing to do with them.
This story has some characteristics of the negative freight scam although in this case the charges were billed as origin charges rather than inflated destination charges. Do I have any legal recourse against any of the 4 companies? I’m not a lawyer but I would think that Shanghai Carrier entered into a contract of carriage with me (shipper) and consignee when they issued the BL marked freight prepaid. Given that consignee was unable to collect the container without paying “charges from origin” I would conclude that Shanghai Carrier has violated the contract of carriage and I can sue them in Shanghai. Is showing the invoice from Dominican Agent enough proof to win a case against Shanghai Carrier? I would also think Dominican Agent collected these charges illegally and he could be sued as well. Or is Shenzhen Agent the one who is liable to refund these charges? Or is there in fact no legal recourse that I can take at all? The problem with suing companies in China is that normally you cannot sue for your legal costs so even if you win the case you still need to pay the legal costs out of pocket. I think that these companies are relying on the fact that the fraud is small enough that small companies like mine won’t take legal action. I would love to prove them wrong if I can do so without spending more than the amount of the fraud. Although maybe the consignee suing Dominican Agent is a better option because he can also claim legal fees and other related economic losses (freight delay, etc)?
The evidence available:
– Photo of original BL.
– Stamped invoice for ocean freight from Shenzhen Agent (not official China fapiao tax invoice, just printed invoice in USD issued to my HK company).
– Computer generated PDF invoice from Dominican Agent with charges listed as “charges from origin”
– Proof of payment by the consignee for above invoice.
– Emails from the Dominican Agent claiming they are only acting on behalf of Panama agent who is acting on behalf of the China agent without specifically naming which China agent.
Any advice or comments are appreciated.