Abba Logistics, a subsidiary of Chinese forwarder Amass Freight, charged an importer for fabricated and inflated destination charges. The Disputes Tribunal has now ordered Abba to refund all charges - fabricated, inflated and real.
Abba charged the importer a total of $6,535.07 over four shipments. The charges included a port service charge of $100 per cubic metre, a delivery order fee of $55 per shipment and an assortment of fabricated destination fees variously described as 'carrier security fee', 'document fee', 'port security fee', 'handling fee' and 'MAF handling fee'.
Abba also charged the importer US$25 per m3 for 'origin terminal handling charges' on two of the shipments. The terms were CFR (Cost and Freight), with all freight costs to be paid by the exporter.
The importer took the issue to the Disputes Tribunal and submitted that the only charges that Abba was entitled to collect were the delivery order fee of $55 per shipment plus a destination terminal handling charge of $65 per m3. It claimed for the return of the difference of $3,676.79.
Abba came up with two main lines of defence. The first was that when the freight was prepaid by the exporter, they would charge freight of US$25 and destination charges of NZ$100, but when the freight was payable by the importer, then they would charge US$85/NZ$65. They attempted to explain this by saying that "The market seafreight rates are always combined with a reflection ratio of destination port charges rates".
The second line of defence was that Abba was merely an agent for Amass and, if the importer had a problem with the charges it should take the matter up with Amass direct. We have since established that Abba is a New Zealand company, member of CBAFF (Freight Forwarders Federation) and based in Auckland. It has one sole director: Ms Emily SHIH. It has three shareholders, Messrs Shang Gen GE, Rong LING and Zheng Yi WU who all share the same address: 248 Yangshupu Road, Shanghai. That address is also the head office of Amass Freight International.
Nevertheless, the Tribunal took Abba at its word. It found that there was no contractual relationship between the importer and Abba. It ordered Abba to refund the total amount that it had received from the importer within ten days. It will now be up to Amass of Shanghai to pursue any proper destination charges directly with the importer.
The Importers Institute continues to receive a steady stream of complaints against forwarders who fabricate and inflate destination charges. In addition to Abba, an outfit called POTA Global Freight has come to our attention on several occasions. Our advice to importers is that they have no option but to pay the extortionate amounts demanded (or face demurrage charges) but should then refer the matter to the Disputes Tribunal.
Unlike Abba, POTA have refunded importers for the overcharges, when threatened with Court action. The Importers Institute sent a courtesy email to POTA's head office in Australia helpfully pointing out in the subject line that the "New Zealand Office of POTA is disgrace to your company's name". We said we "can't believe that a company with the history and international reputation of P&O has lent its name to [...]". We were surprised to receive an email from a Mr Steven Hussey saying "You rude asshole. I look forward to meeting you face to face real soon!"
Mr Hussey of Melbourne calls himself "Director - International" of POTA Global Management Pty Ltd (a division of P&O Trans Australia). We suspected that there was some sort of cultural misunderstanding so decided to consult with a specialist in these matters. We have now been assured that Mr Hussey's response is considered to be perfectly acceptable business etiquette in some parts of the docks in Melbourne.
The Importers Institute believes that it is high time that the Commerce Commission had a closer look at the totally unregulated forwarding sector. Importers should not have to put up with these rip-offs.
UPDATE: 17 Aug 2011. Abba Logistics have appealed to the District Court against the decision of the Disputes Tribunal. We will report on the outcome.
UPDATE 2: 19 Dec 2011. The District Court cancelled the Disputes Tribunal decision and ordered the matter to the District Court for a new hearing.
UPDATE 3: Abba and the importer settled. There will be no hearing in the District Court.