Two freight forwarders went bankrupt within a month

Within a month, news of two freight forwarding companies going bankrupt came out in succession, shocking many people in the industry . According to incomplete statistics, more than five cross-border logistics companies have gone bankrupt this year. As we all know, Europe and the United States are currently conducting strict inspections, and the inspections are becoming more and more stringent. Under this circumstance, it is conceivable that the number of freight forwarding companies that have gone bankrupt this year will not be limited to these few. And this is exactly what many sellers are worried about.

September is the peak sales season for cross-border e-commerce. Sellers should be more cautious when choosing freight forwarders. Missing the peak sales season due to freight forwarding issues will result in a huge loss.

Yiwu freight forwarder went bankrupt, the person in charge ran away with the money

A few days ago, many freight forwarders came to Zhejiang Xinheng International Freight Forwarding Co., Ltd. (hereinafter referred to as "Xinheng") to block the door . Why did this happen? People with a keen sense of smell should quickly realize that this is another "explosion".

It is reported that Xinheng is a US-bound freight forwarder located in Yiwu, Zhejiang . The company is very "young" and was only established in August 2021, less than 4 years ago. According to reports, the company encountered inspections in the United States, 17 containers were detained, with a value of 200 million yuan, and many sellers and freight forwarders were affected.

However, when the cargo owner came to seek an explanation, he found that the person in charge had absconded with the money ( 14 million yuan) .

A freight forwarder complained that he had just been hit once last year and now he has been hit again this year. He said that he was really unlucky. At the same time, he said that in the future, all payments for goods will be made according to the contract when they are due, and the goods will be withheld if they are not paid within the time limit .

In fact, there were signs of Xinheng's bankruptcy as early as April 27 this year . Qichacha showed that it had been listed in the "abnormal operation" list by the Yiwu Municipal Market Supervision Administration because it could not be contacted through the registered residence or business premises.

In addition, a freight forwarder said that not long ago, Xinheng only paid 70% of the payment for two containers shipped through it, and the remaining 30% was still unsuccessful after two months of pursuit. This shows that there was a problem with its funds at the time, or the person in charge was ready to run away.

Some people believe that the reason for the explosion is that freight rates have skyrocketed, and the freight forwarders are under too much pressure, so they can't bear it anymore and just run away. More people think that it is caused by low-price cargo collection.

It is understood that Xinheng uses low prices to buy large quantities of goods in the market, and then distributes them to downstream buyers at high prices. This mode of operation hides great risks. Once inspected by customs, the funds cannot be transferred and a financial crisis will occur.

For the cargo owner, it may seem that the goods are shipped at a cheaper price than others, but once something goes wrong, the losses are often very large.

In the industry, the issue of low-price cargo solicitation has always been discussed. Now that the logistics industry is highly competitive, a large number of freight forwarders have chosen to use low prices to attract customers and maintain the company's operations. However, this operation method has many hazards:

The first is financial risk. Too low a price may cause the freight forwarding company to have difficulty in capital turnover, affecting its ability to pay freight, customs clearance fees, etc., which may lead to a break in the capital chain and make it impossible to perform contractual obligations normally.

The second is vicious competition in the industry, which destroys the normal price system of the market, forces other freight forwarding companies to lower their prices to compete, and compresses the profit margin of the entire industry, which is not conducive to the healthy development of the industry.

Third, business stability is affected. Long-term low-price cargo collection makes it difficult to maintain the normal operation and development of the company, which may lead to the company's bankruptcy or running away, bringing great uncertainty to the customer's cargo transportation.

Fourth, service quality declines. In order to make up for the profit loss caused by low prices, freight forwarders may cut investment in service links, such as reducing monitoring and safeguards during transportation, resulting in the inability to guarantee the safety and timeliness of cargo transportation.

From the seller's perspective, for cost considerations, many people are more willing to choose a freight forwarder with lower prices and longer payment terms. It is understandable that sellers want to reduce logistics costs, but they must choose a freight forwarder within the reasonable market price range and cannot blindly demand a low price, otherwise the risk will be great.

Both sellers and freight forwarders must remember: only reasonable freight rates can support a virtuous cycle in the logistics industry.

Shanghai freight forwarder also encountered problems and all operations were suspended

In fact, not long before the Yiwu freight forwarder went bankrupt, a freight forwarder in Shanghai also ran into trouble.

The message released by the company shows that due to operational difficulties of its headquarters and problems with its capital chain, all its branches and businesses have been ( completely) suspended. They have ( currently ) entered the audit stage in accordance with laws and regulations. Regarding compensation for goods, further processing will be carried out after the audit is completed .

It is reported that this is a freight forwarding company serving the European market, which has been encountering problems in the past two years. Insiders reported that the company had compensated cargo owners tens of millions of yuan at the beginning of last year. However, at the end of last year and in February and March of this year, the company encountered problems again, so the funds could not keep up.

Some people may have noticed a problem. This freight forwarder serves the European market . As we all know, the European market is very complicated and the inspections have become increasingly strict in the past two years.

Complex laws and regulations, strict customs supervision, diverse tax systems, environmental protection and safety standards and other factors have brought many challenges and complexities to logistics companies when handling European business. In addition, the inspection has become more and more stringent in the past two years, and the pressure on freight forwarders has become even greater. Not long ago, a Shenzhen freight forwarding company shared the latest European customs clearance news, which can give us a glimpse of it.

According to him, since the outbreak of strict inspections at Hungarian customs clearance points in early April, the goods of many companies at these customs clearance points have been affected. Whether it is Qatar Airways, railways or sea transportation channels, many European dealers have cleared goods in Hungary. The company also had 7 containers affected.

After the inspection broke out at the Hungarian customs clearance point, major European dealers transferred the goods that were originally sent to Hungary for customs clearance to other customs clearance points. The pressure on Poland, as the preferred alternative customs clearance point, increased sharply, resulting in a decrease in efficiency.

At the same time, ( May 6), the Polish Customs suddenly issued a notice to inspect imported goods. If there is a waybill attached to the outer box of the goods or the goods products, as long as there is any waybill, no matter how many boxes of goods are inspected, the whole truck (full container) of goods will be required to pay value-added tax.

Affected by this new policy, all major customs clearance agencies in Poland have suspended container pick-up and customs clearance, and freight forwarders waiting for customs clearance in Poland have to urgently transfer to other customs clearance points.

Freight forwarders often lament: "If you want to survive long, stay away from the European market", which shows how difficult this market is. Some freight forwarders said that they have given up the European market this year.

In addition, the freight forwarder also provides "tax-inclusive" services , which increases the risk by several levels.

When freight forwarding companies conduct tax-inclusive business in Europe, they may reduce taxes by under-reporting, missing or under-reporting to make profits. This behavior violates European tax regulations and once discovered by customs, they will face high fines and back taxes.

Europe's legal and tax regulations are relatively strict, and the inspection intensity of each of the 27 EU countries is different. Compared with the US customs, the customs clearance process in Europe is more complicated, and once a logistics company is found to have under-declared, the customs will trace its previous violations and impose heavy penalties.

The "Liege" incident in Belgium in March last year was caused by tax evasion by freight forwarders. This incident triggered great turmoil in the logistics industry and many freight forwarders were hit hard.