Shipper vs Agent – A case study

Dear readers, I received below message from one of the readers of this blog which I am re-posting as a case study..

This makes for interesting reading and also an eye opener for several other people who maybe in this predicament or situation and need to know these intimate details of shipping..

Shipper vs Agent - Case StudyI have given my opinion at the bottom of this post.. Like to hear yours..

Hi. I was in Dubai, UAE about 2 weeks ago. Bought a sport car from there. The car dealer found a freight forwarder agency to ship the car via 20ft container. Paid the dealer the charge of $2000. But since I was about to board a flight out of Dubai, only took shipping receipt from dealer.

Dealer promised and in fact did pay that money to the shipping agency. Yet as I found out in an email copied to me by error! That the actual charge for shipping was $1500, not 2000!

This is one point, which made me feel like a fool, but was excited about the car, so thought, no need to pursue.

Then came another point, that really I couldn’t bear: the shipping agency gave “specific” date of a certain vessel departure (5 February 2013), which was exactly what I wanted. Fast shipping as I was on way to airport!

As things transpired: that specific vessel had no scheduled date of departure on 05 Feb, but 10 Feb. He deceived me, knowing that I wanted fast shipping, and gave false info on vessel departure. So I will accept his high fee.

Container ShippingNow I been asking since 07 Feb, please send me detailed bill of shipping charges. Refused. Saying that he is dealing with the dealer not me, hence I have no privileges to see that bill of charges!

I kept requesting disclosure of bill and what the charges include, exclude. I am the shipper! have every right under all relevant laws to see and know what the details of the bill. No answer!

I asked  for bill of lading. he said, that he will send it to the local agent in my area, but not to me.

Waited for BL, nothing, till today, when local agent called me and said he has copy of it, but no original available!! I asked for copy to be sent by email, and upon viewing it, all columns where amount should be typed, was blank, redacted.

This Dubai shipping and forwarding agent is – I would think – such a lousy crook/fool!

How can he deny me the owner of the shipment, the consignee, such essential docs as: original BL, and detailed invoice of charges/payment received for my shipment.

Its a long story, but that’s the short of it. Now I do not know how to teach this %$# a lesson in ethical business dealing. The last thing I want to do is litigation and courts.

Carl , here’s my take on this :

Part 1

1) Firstly, you were given a price for shipping your cargo (Usd.2000/-) to your destination, which you agreed and paid the dealer for the service and instructed him to ship your cargo..

So you authorised him to act on your behalf which made him your agent..

2) Not sure if you got some comparative quotes to check whether the pricing is reasonable and market related, maybe you didn’t because of your travel schedule.. THIS IS A MUST and should have been done..

3) This agent used the same technique anyone in the retail industry would use, which is BUYING & SELLING.. He bought freight from a freight forwarder or a shipping line @ Usd.1500/- and sold it to you for Usd.2000/- and the balance was his profit..

I don’t think there is any regulation governing how much profit can be made like this..




Part 2

1) As far as the shipping agency or forwarders not providing you with the information on the basis of you being the shipper, I wouldn’t call it fraudulent or crookish behaviour, because there are conditions attached to it..

2) You employed the services of your agent to arrange to ship the car to you.. The agent employed the services of the shipping line directly or via a forwarder which then made him the client of the shipping line or the forwarder..

3) So even if you were the shipper on the bill of lading, if there was a contract (an email also could be considered a contract depending on what is written) between the agent and the shipping line to carry your cargo, the shipping line or the freight forwarder can take the stand to not divulge any information relating to the shipment to anyone else without the permission of the booking party..

Car packed in container4) Regarding your question of vessel departure, before the ship arrives, the date you would have been advised is called ETD = EXPECTED or ESTIMATED Time of Departure..

5) No shipping line will guarantee you that a vessel will sail on the date advised or arrive on the date advised.. They simply cannot, as there are several things that could go wrong between Point A & Point B, which no one can foresee..

6) So the time difference in sailing dates COULD BE circumstantial, but it could very well be how you mentioned it..

7) Regarding your question about the bill of lading not displaying any freight details, it is NOT mandatory for a bill of lading to display the freight charges with the exception of a few countries like Brazil where it is mandatory.. In most of the cases of day to day shipping, the bills are NOT freighted..

8) You also mention that you were not given an Original Bill of Lading.. Did you ask for an Original Bill of Lading to be issued or did you leave it all in the hands of the agent who used the services of a freight forwarder and shipping line..?? Did you give them any specific instructions with regards to the documentation..??

In my opinion and based on the facts available, even if you think that there has been unethical dealing, you will have a tough time proving it because most of what has been said above will fall under normal functions within their business framework.. 

If you feel like it, you can lodge a complaint with the Freight Forwarders association or the Shipping Lines or Agents association in your relevant country, but not sure how much that will help..

I would strongly encourage anyone who is planning on exporting or importing anything for the first time to really do their homework and do some research on the modalities involved and then start..

You can read my Beginner’s Guide to Importing or other articles like below that can assist newcomers to the business of shipping and freight..

Image of car in container does not relate to this shipment.. Its a stock image (source unknown)..

Shipper vs Agent

 

Hariesh Manaadiar

Hey all, this is me Hariesh Manaadiar - your friendly neighborhood shipping blogger.. After having been in the shipping industry for around quarter of a century, I thought it was time that I shared some of what I have learnt over the years.. There you go, now you know something about me.. :) You can get to know more about me and what I know by following my blog for free.. :)

23 thoughts on “Shipper vs Agent – A case study”..

Be part of the discussion and share your views about the article here..

  1. One should first know the credibility and market reputation of any company whom they want to deal … otherwise they make stories and professional always be very transparent and customer must also make check list of questions whatever and wherever he has doubt or specific answer or clarity…….

  2. I fully endorse your analysis Hariesh. Only one point I would like to make that if the ff assured or promised him to ship by a specific vessel with departure date as 5 Feb, he could easily check the vessel’s shipment schedule online. If there was no such vessel with ETD 5 Feb, then the ff had cheated him, otherwise there can be hundred reasons to cancel the vessel or postpone the departure/arrival dates.

  3. Can I say what the shipper decided and required were similar to the items of CIF price? If the shipper contacted and asked the import agent in the country of destination to help to import, the procedure would be easier and cheaper. Is it like that?

  4. It is obvious this chap is ignorant of the difference between a shipping agent and a freight forwarder; wherein the shipping agent is working for the Carrier (Shipping Line) which only provide the sea transportation which was reportedly $1500/-. However the freight forwarder provides a package service to export of the car i.e. all the paperworks to facilitate booking of shipping space, customs declaration & inspection, transportation to the port terminal container yard to await vessel’s arrival for loading and another round of paprwork for the BL. The diffrence of $500/- constitute the freight forwarder’s bread & butter for the tedious work for this work facilitation. So there was absolutely no cheating involved. Even if the freight forwarder had provided a freighted BL indicating $1500/- that was only the sea transportation cost charged by the Shipping Line. So what?!!! Does he expect the freight forwarder to provide services for free?!!!

  5. it is all about the ignorance and lack of information of the buyer of Car. above mentioned are normal procedures of freight forwarder, it is not a cheating.
    I like the bloger’s comments also.

  6. This importer could have wasted his time and money by taking this matter to court.
    It is unfortunate that many importers especially from developing countries do not understand how international trade operates.
    I faced a challenge where one of my customer approached me and requested that I import a car for her from Sbt Japan. I was to act as her agent.

    After finding a good car from Sbt Japan, I took her through all the processes and informed her that she had to be patient since it would take time for the car to be inspected and shipped. The vessel takes at least three and half weeks to arrive in Kenya.

    The car was bought on a Cost and Freight term with the method of payment beng Cash with order. When I received the proforma invoice after negotiating the price on her behalf I forwarded the same to her so that she could transfer cash to Sbt bank account in Japan. She did exactly that. I also requested for all her details which I forwarded to the seller. The seller updated the consignee details and I was to appear as a notify party.

    One day after payment, she started doubting whether the information I was giving her was true. She started consulting many people who didn’t know the process and this left her more confused. She was even told that she had lost her money.

    When she told me that she wanted to sue me, I asked him why. Her reply was that I had stolen money from her and she believed that the car should have been shipped the same day she transferred money to Sbt account.

    My question to her was simple; How much money did you send in my personal bank account? Are you aware that the government requires imports to be taken for pre-export inspection before they are shipped? Do you know that liner vessels use a well organized timetable and follow a schedule while sailing?

    She couldn’t answer me?

    It is good for a consignee to seek proper information from qualified people whenever he is seeking service of a freight forwarder.

    1. Thanks for the contribution of your case Stephen.. A lot of it is due to lack of awareness from many of the people involved.. But then there are also a lot of fraudsters roaming among the good ones.. 🙁

  7. I agree with your summation, Hariesh. As long as the car actually arrived more or less in the time the shipper / buyer expected it, and he paid what was quoted to him, there can be no complaint.

  8. There’s nobody to blame but the shipper… He has no knowledge on how the cargo shall be shipped… He should study it first…
    First, when he paid the freight charges to the dealer it can be said that he allows him to negotiate in his behalf. It is different if he pays it directly to the freight forwarder means there’s no dealer in between.
    For ETA, as the word suggests, it’s only estimated time of arrival.

  9. With respect, you seem to ignore an important point. If “the shipping agency gave “specific” date of a certain vessel departure (5 February 2013)”, then this constitutes an agreement on time. In this case the forwarder enters a into a specific contractual undertaking to ensure the cargo is loaded to the vessel scheduled to leave on 5th. If he does that and the vessel departs on 10th then that’s fine. But if ff enters into contract quoting 5th as etd but there is no vessel estimated to depart on 5th then he will be liable. (under English law) While we don’t have access to full facts, the shipper states that he wanted a specific date. There is a difference between booking a space on the next available vessel and booking space on a ship with a certain etd.

  10. BY MISTAKE IF U WILL GET TO KNOW THE DISTURBER VALUE OF THE CAR THEN WILL U ASK THE DEALER THE EXTRA PRICE HE CHARGED FOR THE CAR…ITS AS SIMPLE AS THAT MAN….

  11. Considering that the shipper had not made any comparison before committing and paying to the dealer and considering that a forwarder has a right to a profit in a transaction, this case seems very normal and as long as the car has reached in ship shape, there isn’t very much to pick on.

    Yes, the rate could have been negotiated at the very onset and if the final billing/payment was different from what was agreed upon, that would have been unacceptable and questionable. Which wasn’t the case here.

  12. I work for a prominent freight forwarder. We are not required to share the actual sell cost between ourselves and the carrier with the shipper. In fact, it’s strictly forbidden. We quote the shipper a rate that our company is willing perform the needs of our shipper to get cargo from point A to point Z. Any additional cost that is assessed to the actual sell cost we provide to our customers is considered profit for managing the logistics of shipping the cargo.

  13. I don’t see anything wrong with the transaction at all from a forwarder’s point of view. What I see here is the “buyer from hell”. The buyer has no right to demand anything from anybody. He pays the agreed price for the shipping and the car arrives. It is simple as that. What’s he complaining about?