How to avoid freight forwarding scams

Don’t be a victim of freight forwarding scams. Be alert and knowledgeable. Learn more about the various frauds surrounding the shipping and freight forwarding.

How to avoid freight forwarding scamsHow to avoid freight forwarding scams

Types of freight forwarding scams

Do-it-yourself (DIY) importers are prone to shipping and freight forwarding scams mainly due to their inexperience. To help you avoid these, we have listed some of the most common shipping and freight fraud:

Bill of lading held on ransom

In this scenario, a scammer will pose as a freight forwarder on popular online shopping websites.

How do you spot them?

They offer a ridiculously low rate compared to legitimate freight forwarders.

When does the freight forwarding scam happen?

It happens after the goods are packed and shipped from the port of loading. It is expected for the freight forwarder to issue a bill of lading because this is a mandatory legal document. Without this, the port of destination will not allow you to take possession of your shipment.

Rather than being sent this important document, you will receive an email ransom letter telling you to pay a certain amount or never receive your product at all.

Freight forwarding scams BoL ransomFreight forwarding scams – BoL held ransom

Cargo theft

High-value cargo have become the target of some fraudulent freight forwarders and hauliers. They may pose as freight forwarder with very cheap rates with only one goal in mind – steal your shipment. Thus it is always best to move your valuable goods via reputable forwarder, if possible via air freight. Talk to us.

Freight forwarding scams and cargo theftFreight forwarding scams and cargo theft

Change of bank details

This is one of the latest scams victimizing DIY importers. It comes in a form of an email from a supplier asking for payment for a shipment where they advise of new bank details to deposit payment.

You’ll think that this is legitimate, since they know everything about your shipment. But don’t be deceived that easily. It is best to confirm any changes of address and billing information with your freight forwarding.

Remember, it is very possible for these scammers to hack your supplier’s account. Thus the reason they have your shipment’s information.

Freight forwarding scams and change of bank detailsFreight forwarding scams and change of bank details

Fake costing items

Although not a scam, we have decided to include this in the list so you’ll be aware of possible fake costing items that might be added by some freight forwarders and shipping companies. This includes the following:

  • 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 Explosives Examination Surcharges Agreement
  • U.S. Customs Air “AMS” Charge Agreement (European Defendants’ Conspiracy)
  • U.S. Customs Ocean “AMS” Charge Agreement (Japanese Defendants’ Conspiracy)

How to avoid being a victim of freight forwarding scams

There are many ways you can avoid being a victim of freight forwarding scams. This includes:

Know your trading terms

Knowledge is power and as a first time or DIY importer, knowing your INCOTERMS is one thing you should know. This will protect you from fraudulent companies who start charging you with illegitimate fees such as:

  • FOB Origin
  • Freight prepaid and charged back
  • FOB Origin, freight prepaid and Add

All these terms are not defined in any manner with the Uniform Commercial Code (UCC) or the National Motor Freight Classification (NMFC).

Know the normal shipping costs

It matters very much to know the normal shipping costs of your shipment. This gives you an idea if the amount offered by the freight forwarder is legitimate or not. Of course, if it goes too low then you have to investigate further if they do have the capacity to deliver such a service.

The next best thing is to check for online reviews about this company.

Always perform due diligence

“There’s the temptation to sit back and smile… but there’s so much at stake, we have to do our due diligence.” – Ralph Neas

Most of the time DIY importers are also first time importers who have limited resources. Due to this, they can get easily attracted with super low and discounted offers.

True, these discounts can be deceiving but a responsible business owner should never ever forget to perform due diligence, especially for first-time transactions.

Watch for fake numbers and addresses

Websites are supposed to be a representation of an organization. However, for these fraudulent forwarders, they use this as an avenue to fool DIY importers.

How do you spot these?

Look closely at their websites. You’ll notice that they only offer very basic information, free email accounts, mobile phone and skype contact details.

Freight forwarding scams and fake websitesFreight forwarding scams and fake websites

How to verify the legitimacy of a freight forwarder’s address

Check the shipping and billing address

Orders with a different shipping address other than the billing address is a sign that it may be a phony. It is possible to have two different shipping and billing address, if and only if, the distance between these two are reasonable as shown in the image below:

Freight forwarding scams and fake shipping addressFreight forwarding scams and fake shipping address

Contact us if you think you have found any freight forwarding scams

If you think you being tricked into on of the many freight forwarding scams, contact us for help. Stay informed. Read more news and articles related to the freight forwarding industry. Follow us on LinkedIn.