Empty buildings! Freight forwarding industry is hit by many scandals

Another freight forwarding company has been deserted. This is not the first time I have heard such news in the past month!

"So many freight forwarders have run away this year. If you go there today, they are still working normally, but if you go there tomorrow, the place may be empty," lamented an industry insider. Since the second half of this year, there have been frequent incidents of freight forwarders going bankrupt. According to incomplete statistics, in less than six months, as many as eight freight forwarders have been reported to have gone bankrupt.

Logistics services are an important part of cross-border e-commerce. However, once problems arise, the first choice of many freight forwarders is often to "run away", causing huge losses to sellers and other logistics peers. Now all logistics companies are competing on prices, and as competition gradually intensifies, the risk of bankruptcy is further increased.

All these freight forwarders that have gone bankrupt point to one problem : changing their names. This phenomenon is not uncommon. Instead of taking responsibility and actively solving problems after something goes wrong, some freight forwarders act like idiots and then, when the industry has forgotten about the incident, they start a new company to start selling goods again.

This kind of company has a very bad influence in the industry, because seeing this way of making quick money, it is hard to guarantee that more freight forwarders will not follow suit. Eventually, the whole industry will become bad. Even now, there are some such freight forwarders in the industry. They set up companies not to move goods and do business, but to cheat money. Some people are angry and say: "Is there no way to punish them?" Indeed, some freight forwarders have been punished, and six main offenders have been sentenced to life imprisonment.

Another freight forwarder is deserted, and peers are complaining bitterly

The sellers are not the only ones hurt by the freight forwarder’s failure. There are also many cases where logistics peers have been cheated. Recently, a freight forwarder complained to Ennet that he had been cheated by a cooperating peer. Now the cooperating peer has left and cannot be contacted. He also cannot get back the hundreds of thousands of freight charges.

The freight forwarder is a big player in the US line , so it usually cooperates with peers. Guangzhou Huaxunyun Supply Chain Management Co., Ltd. is a new customer they connected with this year. However, something unexpected happened in July. They found that the monthly payment of this customer had been interrupted since May. Even if they stopped accepting goods immediately, it was too late. At this time, 650,000 yuan of freight had been accumulated and not recovered.

In the process of asking for the freight, they discovered that this competitor actually had a long history of bad deeds.

Although Fang Song is the legal representative of Huaxunyun , Xu Hongcheng is the actual controller behind the scenes . According to Qichacha, Shenzhen Shunqiu Yiyun Freight Forwarding Co., Ltd. (formerly known as Shenzhen Xunjietong Supply Chain Logistics Co., Ltd., established in 2017), which Xu Hongcheng invested in , has now reached the maximum risk level. Currently, the company is the defendant in 15 cases, and the amount involved in the case exceeds 4 million yuan.

This is just the tip of the iceberg. According to the above freight forwarder, Shunqiu Yiyun owes tens of millions of yuan. Although Xu Hongcheng only holds 0.1% of the company's shares (originally 30%) and is not a legal person of the company, he is the guarantor of repayment for part of the debt, which has not been repaid for many years.

Perhaps he felt that the Shunqiu Yiyun account was useless, so Xu Hongcheng kept creating new accounts over the years . " He used the identity information of relatives and friends to open new companies, and then used new names to defraud one company after another." The freight forwarder who broke the news said that they would first issue a small amount of freight invoices for settlement, and then stop paying immediately after defrauding the monthly settlement.

The whistleblower said that the freight forwarder had contacted three companies: Guangzhou Huaxunyun International Freight Forwarding Co., Ltd., Shenzhen Huaxunyun Supply Chain Management Co., Ltd., and Guangzhou Hengtong Supply Chain Co., Ltd. Among them, in August this year, Hengtong Supply Chain was listed in the list of abnormal operations by the Guangzhou Baiyun District Market Supervision and Administration Bureau because it could not be contacted through the registered residence or business premises.

In addition, other freight forwarders reported that Shenzhen Shun *yun International Freight Forwarding and Shenzhen Tong*yunjie Freight Forwarding were also related to Xu Hongcheng . "Their methods of deceiving people are exactly the same, and the IOUs are all signed with Xu Hongcheng 's name, " the freight forwarder who broke the news told Ennet.

If you have also fallen into Xu Hongcheng's trap, you are welcome to leave a message to discuss, or you can add the community operation WeChat to join the group.

The entire scam was completed through "teamwork". In this process, the first thing they needed to do was to select the right "partners".

"They would first arrange for people to interview route business at various logistics companies." The freight forwarder who broke the news said: "It was during the interview that the other party knew that we had first-hand transportation capacity, and then after the interview, the other party gave the contact information of our salesperson to Xu Hongcheng, so the subsequent cooperation was possible. "

In the industry, many freight forwarders fell into the trap set by Xu Hongcheng and suffered heavy losses. Among them, a domestic logistics giant lost up to 3 million yuan, while the losses of other freight forwarders ranged from tens of thousands to hundreds of thousands.

But it is difficult for them to find anyone to ask for the unpaid freight. In August this year , Huaxunyun was listed on the list of abnormal operations by the Guangzhou Baiyun District Market Supervision and Administration Bureau, on the grounds that "it could not be contacted through the registered residence or business premises."

The freight forwarder who broke the news also said: “We went to their office address and found that the office had been vacated. Now they are not answering calls or replying WeChat messages. We have completely lost contact with them.”

Such companies are not isolated cases. Industry insiders said that in the cross-border logistics circle, there are many freight forwarding companies that specialize in making quick money by delaying the payment of freight to their peers. Once there are too many debt collectors, they will run away. It is useless to sue them because their property has long been transferred. Even if they win the lawsuit, they have no executable assets under their names.

The logistics company that brought Xu Hongcheng to court encountered such an embarrassing situation. In July this year, Shenzhen Wutongbao International Logistics Co., Ltd. applied to the Shenzhen Court for compulsory execution because Xu Hongcheng did not perform the contents of the effective legal documents. However, after the court verified his bank deposits, stocks, industrial and commercial equity, real estate, land use rights, vehicles, Alipay and Tenpay account balances and other properties under his name and took control measures, the results were shocking.

The court froze Xu Hongcheng's Tenpay, Alipay and seven bank accounts, but the total balance of these accounts was only over 34 yuan. It was obvious that the property had been transferred.  

The freight forwarder who divulged the information is frustrated by the fruitless debt collection for months. He hopes that his peers can learn lessons from his experience, recognize some of the new companies in the market, add them through group chats, or be cautious when accepting cooperation recommendations from unfamiliar friends, keep a close eye on the financial accounts, and conduct risk assessments.

The second half of the year is the golden peak season for cross-border e-commerce, and any mistake in this link may bring heavy losses. But this year, many freight forwarders have run into problems at this time, and news of failures has been reported one after another, making sellers nervous.

Warehouses and offices were emptied, and freight forwarders collapsed during the peak season

On the same day when the above information was disclosed, Yien.com saw another similar complaint. A freight forwarder said that in October, he sent 12 shipments in two batches through Shenzhen Hui* International Freight Forwarding Co., Ltd. , with a total weight of 500KG. Later, all of them were inspected. However, when they contacted the company to solve the problem, they found that the company had lost contact and did not respond to messages or phone calls. They went to the office address and found that the office had been empty and the warehouse had been emptied.

Qichacha shows that Hui * International was established not long ago (established in 2020, formerly known as: Shenzhen You*tongda International Freight Forwarding Co., Ltd.), and its business scope includes sea, land and air freight forwarding, logistics solution design, logistics information consulting, etc.

In order to verify the above content, Yien.com contacted the other party through WeChat. However, when we asked him whether he was Hui * International, we not only got a negative answer, but also said that he was from another freight forwarding company. When Yien.com was ready to make further inquiries, we found that he had blocked us. We also received no response to subsequent text messages.

There is still no definite news about the reason for the company's bankruptcy, but we can get a glimpse of it from the accusation of the above freight forwarder. It is reported that the company mainly deals with air delivery of sensitive goods to the United States and receives the goods at a price lower than the market price.

Accepting goods at low prices has always been a red flag in the freight forwarding industry. The competition among freight forwarders has obviously become fierce. In order to grab customers, many companies will choose to sacrifice profits and accept goods at low prices. However, this is a high-risk behavior. Once a link goes wrong, the capital chain may be broken. In addition, if the goods are sensitive, the risk level rises to another level.

In fact, the freight forwarding circle has not been peaceful in the past month. Just a few days before the news about Xu Hongcheng and Hui * International came out, two bombs had exploded one after another - Shenzhen Bai* International Supply Chain Co., Ltd. and Yiwu Jia* Supply Chain Management Co., Ltd.

The bomb of Bai * International was triggered by a notice letter. A logistics company in Shenzhen said in the notice that Bai* International booked cargo through the company, but after the cargo arrived at the port, the company claimed that it had no money to pay the freight. Finally, they signed a payment commitment letter with the other party, promising to release the cargo after paying the balance within the specified time. However, when the promised repayment date came, the other party suddenly could not be contacted, and when they went to the door, they found that the company had been vacated.

A few days after this mine exploded, another mine exploded in Yiwu. It is reported that Jia * Supply Chain closed the warehouse within one day, the boss deleted and blacklisted all customers, ran away with 20 million yuan, and many freight forwarders were cheated. Qichacha shows that the company was established in early 2022 and is very young, but the legal person controls multiple companies.

This kind of backstabbing is not uncommon in the cross-border circle. These bad goods agents collect the goods and freight from customers, but do not pay the next buyer. Then they use the excuse of broken capital chain to go bankrupt, or simply lose contact and let things rot. After the limelight has passed, they change their shells and start to pick up goods again. For example, after the collapse of Bai* International, someone broke the news that its legal person and "team" controlled as many as 8 logistics companies. An industry insider said that some companies even opened a new one next door less than a month after the collapse.

These bad freight forwarders have deviated from the essence of business, and to put it bluntly, they are committing fraud. After being hit by the news of the freight forwarders going bankrupt, a seller said helplessly: "In the future, I will not ask for timeliness or price when shipping, but only for not running away."

Bad freight forwarders have seriously disrupted the cross-border logistics market. They are a "knife" hanging over the heads of other normal freight forwarders and cross-border e-commerce sellers. Many people want to eradicate them and purify the industry environment, but this is not easy. The main difficulties include: first, for such cases, the public security organs usually refuse to file a case on the grounds of economic disputes; second, due to the different places of the victims, the cases are scattered, and the amount of each case is small, it is difficult to attract the attention of the police.

Finally, the victim can only sue through the court, but this process is very long, and from many cases, it is difficult to get the money even if the case is won. Is it really impossible to punish these bad freight forwarders and let them go unpunished? Not really.

As early as 2009, Yiwu police cracked a freight forwarding case in which a criminal group took advantage of legal loopholes to register more than 20 freight forwarding companies and defrauded more than 20 million yuan. In the case, 16 suspects were found guilty, of which 6 were sentenced to life imprisonment, deprived of political rights for life, and all personal property was confiscated. The rest were sentenced to fixed-term imprisonment ranging from 6 to 14 years.

Although the incident happened more than ten years ago, their modus operandi is no different from today. The police investigation found that the gang first registered more than 20 freight forwarding companies in Shanghai, Hangzhou, Ningbo and other places in the name of others, then went to the market to collect goods, and then entrusted a regular first-class freight forwarding company to ship the goods on their behalf. At the beginning, they would pay the freight in time, but after a period of cooperation, they would negotiate monthly settlement with the first-class freight forwarding company. Finally, when the agreed payment time was approaching, they would shirk their responsibilities with various reasons such as difficulty in capital turnover.

In general, the modus operandi of this type of scam can be roughly divided into five steps: the first step is to register a shell company and undertake freight business at a low price; the second step is to induce the first-tier freight forwarding company (downstream party) to sign a monthly settlement agreement; the third step is to delay the payment of freight for various reasons when the agreed payment date is approaching, and even close the company and communication tools and abscond with the money; the fourth step is that once the payment is in arrears and the bill of lading is withheld, the real owner of the goods or the fake owner of the goods will be arranged to apply to the court for compulsory execution to avoid paying the freight; the fifth step is to use "economic disputes" to cover up the fact of fraud.

There are many logistics companies in the cross-border circle that have been cheated by such bad freight forwarders, but it is rare to see anyone come forward to expose them. They think more about not damaging their brand and affecting the receipt of goods, so most of them keep silent. However, this practice will instead contribute to the formation of unhealthy trends.

Regarding this issue, some people claim that it can be avoided by not giving credit period. This is indeed a method, but in the long run, it is not very realistic. Regarding this issue, a freight forwarder sees it this way: "It is OK to settle the first one or two bills, but if there is no credit period in the future, customers will run away, and if there is not enough goods, the price will easily lose its advantage. Not to mention individual customers, but for customers with large cargoes, the issue of credit period is always unavoidable."

Be careful when cooperating with others and avoid bad freight forwarders

There is no permanent solution to this type of scam. Whether you are a seller or a freight forwarder, all you can do is be more careful. Here are some preventive measures compiled by Ennet:

1. Carefully choose a freight forwarding company: When choosing a freight forwarding company, you should carefully investigate and screen it. You can check the company's registration information, business scope, business experience, etc. You can also learn about the reputation and strength of the freight forwarding company by asking other customers for their evaluation or the evaluation report of a third-party evaluation agency.

2. Observe the company's operating conditions: You can judge the authenticity and operating conditions of the freight forwarding company by observing its office environment, employee size, equipment and facilities, etc. If the company has only a few employees, simple facilities, and no actual operating process, there may be problems.

3. Require a formal contract: Before cooperating with a freight forwarding company, you must sign a contract that specifies the rights and obligations of both parties. The contract should include detailed information about the company, including registered address, registered capital, business scope, etc. Ensure the legality and validity of the contract.

4. Be cautious when paying for goods: Ask the freight forwarding company to provide a formal collection account and legal invoices. Do not deposit the payment directly into your personal account. It is best to pay through bank transfer or a third-party payment platform, and verify the authenticity and legality of the account before payment.

5. Establish long-term cooperative relationship: Establish long-term cooperative relationship with freight forwarding companies, and conduct timely communication and supervision. Regularly check freight records and transportation conditions to ensure safe delivery and compliance of goods.

6. Pay attention to online information: Pay attention to the authenticity of the freight forwarding company's official website and social media accounts. Do not blindly believe in online promotional information and word-of-mouth reviews. Verify the company's true situation through multiple sources of information.

In short, to prevent freight forwarders from using shell companies to commit fraud, you need to carefully select freight forwarding companies, sign formal contracts, pay for goods carefully, and establish long-term cooperative relationships with freight forwarding companies, while paying attention to online information and timely supervision.

From the current perspective, there are several reasons why cross-border e-commerce freight forwarders are prone to changing their shells after bankruptcy:

1. Imperfect laws: At present, the regulatory legal system of the cross-border e-commerce industry is relatively imperfect, especially for the freight forwarding service, the relevant laws and regulations are often vague and the supervision is relatively weak. This provides space for some bad companies to operate in a shell company.

Second, insufficient supervision: Since cross-border e-commerce involves many entities, including overseas suppliers, domestic freight forwarders, e-commerce platforms, etc., there are problems such as information asymmetry in the supervision process, which makes supervision more difficult. Some bad companies can take advantage of this loophole to conduct business under a different name.

3. Funding issues: When some cross-border e-commerce freight forwarders are faced with difficulties such as a broken capital chain, they often choose to change their shells to save their reputation. They will re-register the company by changing the company name and legal person to avoid being held accountable.

4. Information asymmetry: There is a problem of information asymmetry in the cross-border e-commerce freight forwarding industry. It is difficult for customers to fully understand the actual situation of the freight forwarding company, including qualifications, reputation, etc. Some bad companies can continue to attract customers and commit fraud by changing their shells.

It should be pointed out that although there are cases of shell-changing business in the cross-border e-commerce freight forwarding industry, the government's crackdown on such behavior is gradually increasing. With the improvement of relevant laws and regulations, the improvement of supervision, and the establishment of industry credibility, the phenomenon of shell-changing business is expected to be effectively curbed.