20 Insurance


Trust – the most valuable commodity of all


Trust in business partners in the far flung reaches of the globe is a commercial necessity for small and middle-sized freight forwarders. Michael Yarwood, senior claims executive at freight insurance specialist, TT Club gives some guidance in how to secure it.


International trade involves multiple stakeholders in different


parts of the globe.


Fraud has always been a factor and the legitimate operator needs to be aware of the risks and erect defences. Due diligence should be a fundamental component of any business’ risk management strategy, but in fast paced globalised markets, it can all too easily be overlooked, resulting in significant financial and reputational losses. Adept in the art of deceit, perpetrators prey on those who carry out insufficient checks. Where their own network of


offices is not sufficient, freight forwarders have always relied upon the services and support of other freight forwarders and agents for local expertise and presence. Many such relationships are long standing and oſten reciprocal, but issues may arise where arrangements need to be extended. Then, effective due diligence is critical. A number of cases of


fraudulent activity have recently arisen, particularly involving Chinese freight operators. A common scam follows this pattern: the fraudulent freight operator gains control of original bills of lading, refuses to release


them, and holds the receiving freight forwarder to ransom for several thousand dollars. Where language, jurisdiction,


time zone and distance separate the stakeholders, resolving issues quickly in such circumstances can be challenging and expensive. Typically, it will involve a new


agency agreement, either where forwarders are exploring new geographical opportunities or simply changing their current agent. Once a signed agency


agreement is in place between the parties, business oſten appears to operate normally for a period. When arranging shipments, the sending freight operator will invariably name itself as the shipper under the bill of lading to maintain control over the documents. The trigger point is when the cargo arrives at the destination port and nobody has received the original bill of lading. The fraud comes to light when


the receiving forwarder contacts the sending freight operator and requests the release of the bill of lading, and is advised that the documents cannot be released without a further payment being made. The reasoning behind


BIFA urges freight youngsters to go for gold


BIFA is to add a new Apprentice of the Year in Logistics category to its annual Freight Service Awards. The winner of the new


award, sponsored by Outsource Training and Development, will be the apprentice – or new recruit undergoing similar training with a member company – who has added the most to their employer’s business; who has taken a proactive and innovative approach to their career and are making a significant contribution in their workplace; and has shown a dedication to excel in their professional development and learning.


BIFA director general, Robert


Keen asks: “Is there a young apprentice in your company who went for gold and delivered a medal-winning performance for your business? If so, we strongly urge you to put them forward to form part of the starting line-up for the new award.” Judges will look for entries


that showcase the difference the named apprentice has made to the organisation. They will want to see hard evidence on which to base their decisions and will be looking for examples that highlight the apprentice’s inspirational qualities, commitment to personal


Issue 7 2018 - Freight Business Journal


the additional payments may differ; a late payment to a third party, a penalty or unexpected fees due to a third party. The demands typically run into tens of thousands of dollars. This type of fraud has been


used on single shipments and multiple containers; whilst higher value consignments may be more susceptible, the fraudsters appear to be indiscriminate. The process can be more onerous and complex where the fraudulent freight agent elects to spread multiple shipments across a number of shipping lines. The receiving freight


forwarder now faces the dilemma of whether to pay or not. Payment carries no guarantee that the unscrupulous freight operator will actually release the bill of lading, since these are not necessarily legitimate businesses. Electing not to pay the demand could lead to a series of financially and commercially damaging discussions with customers and lawyers. Invariably, when faced


with this situation, it will be necessary to appoint a local law firm to engage with the fraudster to try to reach an amicable solution, obtaining the original bills of lading and facilitating the release of the cargo at destination. Such cases demonstrate the


importance of performing due diligence through


the initial


selection process. Where the decision to change


or use an alternative agent is as a result of an unsolicited approach, determining its legitimacy can be challenging,


development and the contribution they have made. In a year in which freight


apprenticeships have come to the fore, BIFA anticipates that there will be keen interest in the new award. The Association was instrumental in helping to establish an employer’s ‘Trailblazer’ group, which has seen the launch of a new Level 3 Freight Forwarding Apprenticeship earlier this year. Candidates must either be


currently undertaking, or have completed in the past two years, a professionally recognised apprenticeship framework, or standard in logistics, or freight forwarding. Entries can be at any


apprenticeship level. If undertaking an apprenticeship,


but this in itself should raise red flags.


Similarly when searching


for local agents online, proceed with caution. For example, if the low rates being offered seem too good to be true, they probably are. Performing due diligence on


a prospective freight agent in another jurisdiction can appear daunting; in an age where every conceivable document can be manipulated and forged, relying on electronic documentation is no longer a satisfactory means of verifying the legitimacy of a business. There exist several options


for a foreign entity to search for and screen reliable candidates. Following the experiences with Chinese entities, here are pointers for that jurisdiction. Consult with the China


International Freight Forwarders Association (CIFA) www.cifa.org.cn. CIFA have a number of dedicated departments such as ‘Membership affairs’ (email: wangxy@cifa.org.cn) and ‘Credit Risk Evaluation’ (email: linzhong@cifa.org.cn). Consult the Chinese Shipping


official website, http://www. chineseshipping.com.cn/bl/ blzcd01.asp. This site enables a search against all freight forwarders who have duly registered as an NVOCC with the authorities. If still unsure, appoint a


local lawyer to conduct an independent investigation into the freight forwarder’s background. There will be a modest upfront cost, but it will undoubtedly reduce the risk of becoming a fraud victim.


the candidate must have completed at least eight months within the last 12 months (since February 1st 2018). Nominations must be made


by BIFA members who have an apprentice on a recognised apprenticeship framework or standard. (Entries will not be accepted from individual apprentices themselves.) A nomination form is available


at: https://bifa.org/enter-now/ apprentice-of-the-year-award). Entries to the Freight Service


Awards, which are now in their 30th year, are currently open and will be hosted by double Olympic champion Dame Kelly Holmes at The Brewery in London on Thursday 17 January next year - https://bifa.org/awards/


News Roundup Forwarding & Logistics


Maersk Group’s Twill digital forwarder is now operating in Denmark and Sweden. It is now present in 19 countries around the world.


Digital forwarder Zencargo has launched a procurement service for retailers based on virtual local offices. It provides procurement teams with a local presence, close to their suppliers, enabling businesses to get the level of detail that would normally require a remote team. They use automated messaging and artificial intelligence to communicate with suppliers and obtaining regular production updates. The system flags issues so teams can review problems before they arise and focus efforts on minimising disturbances. Currently supply chain teams manage their suppliers through emails, phone calls and shared spreadsheets.


Heathrow based aerospace logistics provider B&H Worldwide is to open new offices in Frankfurt and Prague and will be launching a Europe-wide road freight network to provide an alternative to airfreight. The Frankfurt office will be located at the Cargo City site at the airport and will include a high security warehouse, allowing customers to position inventory in the heart of Europe. The new Prague office will be located at Václav Havel Airport and will focus on providing frontline customer service and will facilitate further market development in Central Europe. The company added that the new locations would help its customers plan their way through the uncertainties created by Brexit.


B&H Worldwide has appointed Mark Hollis to the newly created position of head of commercial – Oceania. He has an extensive track record companies such as Toll Global Forwarding and Kuehne Nagel.


The Carbon Trust has validated the methodology and processes that Agility uses to generate carbon footprint reports for logistics customers. It demonstrates that the freight forwarder’s


reporting methodology and processes comply


with the organization’s reporting guidance for transparency and accuracy. Agility has been providing free carbon footprint reports to customers since 2009.


Kuehne + Nagel has acquired the logistics operations of Indonesian firm Wira Logistics. It aims to set up a fully integrated end-to-end logistics solutions across the country. It says that Indonesia is arguably the most important internet market in South East Asia with a burgeoning middle class driving


increased purchasing power and making important consumer market for many companies.


DSV has opened a 20,000sq m warehouse in Monterrey, Mexico a few miles from the International Airport. The first of three warehouse consolidation projects the forwarder is working on in Mexico, it replaces two older, smaller buildings.


CEVA Logistics has appointed Serge Corbel as new chief financial officer, replacing Peter Waller, who is to pursue opportunities outside the company.


Corbel has been at


shipping line CMA-CGM for over 25 years. CEVA has also appointed Guillaume Sauzedde managing director of its Central & Eastern Europe cluster. Prior to joining CEVA Logistics, he was managing director for Kuehne & Nagel in Poland. He succeeds Piotr Zborowski who is leaving CEVA to pursue other career opportunities.


Ceva Logistics has teamed up with Varidesk and JJ Barea Foundation to deliver school desks to Puerto Rico, one year after the island was hit by a hurricane. It has delivered nearly 500 desks and seating to four schools across Puerto Rico in three 40-foot containers from Dallas, Texas along with final delivery.


it an


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