Bribery for over-reporting freight rates! Senior executive sentenced to 15 months

During Amazon Prime Day , many sellers saw a surge in orders, especially on the US site, which performed beyond expectations. Some sellers sold out on the first day of the promotion, and in addition to preparing for the fourth quarter peak season, the demand for shipments has increased recently. However, there is a wave of logistics strikes on the horizon, and delays may be inevitable. In addition, some logistics companies often use illegal operations, so sellers need to be extra vigilant.

A freight forwarding boss was sentenced to 15 months in prison for bribing 120,000 yuan

The day before yesterday , Liao XX, the sole director and shareholder of Fengrong Logistics Co., Ltd. (hereinafter referred to as Fengrong), was sentenced to 15 months in prison. The reason for the sentence was bribery and corruption, which affected fair competition in the logistics industry.

Previously, Fengrong was prosecuted by the Hong Kong Independent Commission Against Corruption for overreporting freight costs in the process of cooperating with upstream companies and bribing the difference in freight costs to the logistics company manager in order to maintain a good relationship. The case involved multiple logistics orders, involving costs including freight costs of about HK$1.7 million.

It is understood that since April 2018, Fengrong has been commissioned by Datong International Land Transport Co., Ltd. (Datong) to provide cross-border logistics services to customers of Datong's parent company Kerry Logistics Network Co., Ltd. (hereinafter referred to as Kerry Logistics).

From April 2018 to April 2021, Tatung arranged multiple orders for Fengrong, involving a total amount of approximately HK$1.7 million. In order to obtain more logistics orders from Tatung, Liao XX conspired with Fengrong's business partner and a manager of Kerry Logistics' subsidiary to exaggerate the freight charges on the payment slips, and "bribed" the manager with the difference of more than HK$120,000.

In the end, the freight forwarder who obtained the order by bribery was sentenced, which was a well-deserved punishment! Perhaps in the eyes of some logistics practitioners in the industry, this is just a common way to acquire customers in the industry, and will give customers a certain amount of "kickbacks" or "commissions", but this behavior has seriously affected fair competition in the logistics industry. Only by uncovering unfair competition and imposing heavy penalties can the healthy development of the industry be beneficial.

In recent years, vicious competition has emerged in the logistics industry. In order to obtain more orders, freight forwarders receive goods at ultra-low prices, and then change channels, replacing the promised air freight with sea freight, which seriously affects the seller's delivery time. Some unscrupulous freight forwarders embezzle customers' goods and sell them in order to make profits. Some freight forwarders even run away after collecting the payment and continue to cheat under a different company name ...

These behaviors have caused cross-border sellers to gradually lose trust in some logistics companies, and have also depressed the entire cross-border freight industry. Nowadays, cross-border people must carefully investigate before choosing a logistics company before shipping, and they are particularly vigilant when they hear some quotations that are lower than the market price. However, the freight rates of many routes have indeed dropped recently, and sellers need to pay attention to the market price in a timely manner.

Freight rates on many routes are falling

As cross-border sellers prepare for the peak season in the fourth quarter, freight rates on many routes have fallen. According to the news from the Shipping Network, due to the large decline in freight rates on European and Mediterranean routes, the Shanghai Export Container Freight Index (SCFI) fell again in the first week of July, down 2.29% to 931.73 points, following the previous three consecutive declines and a weekly increase of 3.17%.

According to the latest SCFI quotation, the freight rate from Shanghai to the West Coast of the United States is 1,404 US dollars/FEU, down 4 US dollars, a decrease of 0.28% ; the freight rate from Shanghai to the East Coast of the United States is 2,368 US dollars/FEU, the same as the previous period. The freight rate from Shanghai to Europe is 740 US dollars/TEU, down 23 US dollars, a decrease of 3.01%; the freight rate from Shanghai to the Mediterranean is 1,413 US dollars/TEU, down 53 US dollars, a decrease of 3.62%. The South American line increased by 3.31%; the Southeast Asian line (Singapore) decreased by 9.47%; the Persian Gulf route decreased by 6.6%; the Australia and New Zealand route decreased by 4.2%.

Except for the relatively strong US route, freight rates on other routes are falling. Recently, the US cargo volume has rebounded slightly, while the European cargo volume has continued to be sluggish, but both are lower than the traditional peak season shipment expectations. Many shipping companies and freight forwarders said that the actual cargo volume in the European and American markets is not large at present, and the support for the increase in freight rates is limited.

At present, freight rates are falling or flat or have become a general trend. The US economy is slowing down, and there is uncertainty about the future economic growth prospects; consumption in the Eurozone is stagnant and the economic outlook is not optimistic. Maybe there will be no peak season for freight this year.

Previously, Maersk, CMA CGM and other shipping companies announced price increases, and the US route was the third increase on July 1. In fact, freight rates depend on supply and demand. If the market is still sluggish at the end of July, the shipping company's price increase strategy will inevitably fail. Some large freight forwarding companies believe that it is not easy to increase freight rates. A senior executive of an Asian shipping company said it is very difficult and that freight rates may fall instead of rise during the effective period.

Shipping lines will raise freight rates through various operations, such as cutting capacity. As demand slows, shipping lines have cut capacity on the trans-Pacific trade route by nearly a quarter over the past year.

A freight forwarder in the industry said that the reduction in capacity, lines and ships by shipping companies has led to rising costs. Currently, ordinary ships on the US route are seriously overloaded, and the probability of shipping companies limiting their loads and dropping containers has increased. Dropping containers may cause shipment delays, and the possible UPS strike has sounded the alarm for delays in terminal deliveries in the United States.

FedEx's shipping capacity is overloaded, and a large number of goods at the end of the United States will be delayed

Since June, the UPS strike has caused a lot of controversy, and the United States is about to face a wave of logistics strikes.

At midnight on July 31, the five-year contract between UPS and the union expired, and the union began negotiations with UPS to ensure that UPS employees could get higher wages. In addition to wages, the union also insisted on removing surveillance cameras from delivery trucks and requiring workers doing the same job to receive equal wages regardless of working hours.

In early July, negotiations between the two sides reached an impasse. The union said UPS withdrew from the bargaining table and their proposal failed to meet the needs of its members and was unanimously rejected by the UPS Truckers National Bargaining Committee. A UPS spokesman said it was the truckers who gave up the negotiations.

As the contract deadline approaches, about 97% of UPS members have voted to approve a strike if a contract is not reached by July 31. 340,000 UPS truck drivers may carry out the largest strike in the United States in 10 years.

UPS delivers about 21 million packages across the United States every day, and its transportation volume accounts for about 6% of the U.S. GDP. This also means that the UPS strike may have a significant impact on American consumers and global e-commerce companies, and the strike may paralyze the supply chain across the United States.

Because they are worried that the strike will affect delivery, many local American companies have turned their cargo transportation to logistics companies such as FedEx, USPS and DHL. As the volume of packages increases, FedEx's transportation capacity has been overloaded . Some domestic logistics companies have issued urgent messages:

"Because UPS truck drivers abroad have confirmed that they will start a strike on August 1, the ships receiving goods starting from this week and the subsequent UPS goods arriving at the port will be affected by time delays; the federal transport capacity is also overloaded, so the time delay compensation for time-limited delivery will not be resumed for the time being!"

The problem of delivery delays in the United States will continue, and since the transportation capacity cannot be guaranteed, e-commerce sales will also be affected to a certain extent. In order to reduce waiting time, American consumers may turn to offline shopping or order pickup.

freight

bribery

Freight Forwarding