Is Your Freight Forwarder Legit? Steer Clear of These 5 Common Freight Forwarding Scams.
Freight Forwarding Scams.
A freight forwarder is a company that receives and ships goods on behalf of other companies. The freight forwarder has options to ship a consignment by road, or by rail, or by sea. Companies looking for such services often plunge into freight forwarding scams that can threaten to bring down a business. The criminals behind these schemes pose as a freight forwarder. They pretend to organize shipments for corporations or individuals looking to get goods from the manufacturer to a customer or a final distribution point.
The Importance of Freight Forwarders.
Having a reliable Freight Forwarder is an essential part of your supply chain. Forwarders must communicate clearly and accurately the services they offer to customers. A good freight forwarder is held responsible for the freight and ensures relevant information is communicated to appropriate parties in good time. Freight forwarders make your supply chain flexible and allow firms to respond quickly with minimal labor requirements as regards to logistics They should keep you updated about your goods, discuss deals with the carrier move the items to the pickup area. Keeping customers notified of the whereabouts of shipments is an active way to prevent fraud. Freight forwarding scams can be easily detected when communication hiccups kick in, and the forwarder is no longer giving direct answers.
Types of Freight Forwarding Scams
So what are some of the scams to watch out for when searching for a freight forwarding service?
1.Bill of landing retained till you pay.
Here, a scammer will pose a freight forwarder on well-known online shopping websites. These scammers are easily identified since they tend to offer a very low rate than the real freight forwarders. Freight forwarding scams happens after the goods are packed and shipped from the port of loading. As normal, the freight forwarder issues a bill of landing because it is a mandatory legal document. Without this document, you won't be able to recover your shipment from the port. In the case of a scam, you will receive an email telling you to pay a particular amount or may never receive your product at all.
These scammers pretend to be freight forwarders with extremely cheap rates but secretly prepare to steal your shipment. It is advisable to move your valuable goods via air freight or a respected and well-known forwarder.
3.Updated Bank Account Email.
This comes in the form of an email from a supplier asking for shipment payment to a new "allegedly updated" bank account. These people will pose as your service provider and talk you to convincing levels. They use techniques that can trick one into making the payment, such as reading out all your details to win your trust. Always confirm any changes in address and billing information with your freight forwarding service. Don't fall for traps and strange emails even if they read out all your details. They probably hacked your service provider's site and stole the data.
4.Fees that don't apply.
Some freight forwarders and shipping companies may include fees that do not apply to inflate the cost of shipping for their selfish gains. Some shipping charges that do not apply include;
• 2001 Security Surcharge Agreement
• 2002 Fuel Surcharges Agreement
• 2002 New Export System Fee Agreement
• U.S Customs Air "AMS" Charge Agreement (Japanese Defendants' Conspiracy)
• 2005 Chinese Currency Adjustment Factor Agreement
• 2005, 2006, and 2007 Peak Season Rate Increase Agreement
• 2006 Security and Explosive Examination Surcharges Agreement
• U.S Customs Air "AMS" Charge Agreement (European Defendants' Conspiracy)
• U.s Customs Ocean "AMS" Charge Agreement (Japanese Defendants' Conspiracy) Always watch out for any of the above charges.
5.Hidden Fees & Charges.
At the initial stage, when hammering out shipping rates, you may get seemingly low prices. After the shipment reaches its destination, you may face more charges than what you had agreed on. Phony freight forwarders hide some charges to look cheap in the customer's eye, leaving them with hefty costs afterward.
How to Avoid Plunging into Freight Forwarding Scams.
Freight scams are common, but we can avoid them by searching carefully and taking some security measures.
1.Understand the role of freight forwarder and the specific functions they are to carry out.
Once you know the exact role they are supposed to play, you can never be a victim. A freight forwarder can be a person or a company that organizes and plans your shipment. This includes getting your cargo from the original point to the final destination. Forwarders may not move your cargo physically, but they do process by communicating with all the people and moving all the parts involved. It's a process involving people and parts, making it a little more complicated for an average person or company with limited knowledge. It's advisable always to do research on this and seek recommendations from business associates, friends, and family who may have used reliable freight forwarders.
2.Understand the mode of transport your goods require.
The various modes of transport include;
• Air-freight It is an expensive but a quicker mode of transport for international or domestic shipping. It is usually preferred for smaller volumes of cargo.
• Ocean freight You can use ocean freight for a cheaper and most eco-friendly transport mode at the international or domestic level. It is the best approach for large volumes of cargo.
• Road freight For a quicker doorstep delivery either locally, regionally, or between various countries within a Trade Union, road freight is the most common mode of shipping. It's cheaper on short distances.
• Railway freight Excellent for long-distance deliveries where we need to carry large volumes of cargo either locally, regionally within a trade union, or these days, even between continents.
3.Know your trading terms.
Before approaching a forwarding company, research more about it, and have an overview of how activities are carried out there. Understand what shipping charges will apply when transporting through various ports. This will protect you from freight forwarding scams that may cost you extra.
4.Check the normal shipping cost.
To familiarize yourself well with the shipping charge and costs, get multiple quotes from multiple freight forwarders, and estimate the average amount you will be expected to pay. If prices seem too good to be true, then it is probably a scam. Too low or too high prices are the first sign of fraud. 5.
Watch out for fake addresses, websites, emails, and phone calls.
Study the validity of your freight forwarding service keenly. You can check their website for their legitimacy while being wary of fake sites. Also, watch out for fake emails and phone calls asking you to make payments or give out any personal banking details.
How to Identify a Legitimate Freight Forwarding Service
There are a few ways to identify legitimate freight forwarders. You should, therefore, pay attention to the below points to avoid freight forwarding scams.
• Social media Look for links, use twitter, and other platforms to boost credibility.
• Photos of people You can check people's photos on their websites, including managing director and other management teams and board members.
• Pictures of shipment Look for pictures showing people workingand check for the company logo.
• Contact Us This section on the website allows visitors can ask any question, leave comments, or find important phone numbers and email addresses.
• Visit If your freight forwarder is in the same city as you, you can decide to pay a visit to prove their legitimacy.
• Photos from meetings Many forwarders have Annual General Meetings of their networks. If they were part of it, then they post pictures to prove it.
• Video A YouTube video is a great proof of validity, no matter how short it is. It should answer some frequently asked questions that should prove the firm's validity.
• Brochure All legitimate freight forwarders have brochures, either on paper or online.
• Customer reviews You can also view customer reviews and other reviews on sites that rank and rate freight services.
5 Tips on How to Choose a Freight Forwarder.
1. Make sure the freight forwarder has experience. This means that your freight forwarder will help you avoid customs, warehousing, and routing problems.
2. Ask about the freight forwarder's network of agents and business partners in the country you are exporting to.
3. Ensure that the freight forwarder offers the services you need for your shipment.
4. Make sure the freight forwarder has good references.
5. Understand the shipping charges involved Lastly, ensure that the freight forwarder has good customer service that won't leave you dark.
In a nutshell
As time passes, scammers and those involved in fraud come up with more cunning ways to manipulate individuals or companies. Businesses must be extra careful to avoid these common freight forwarding scams.