Even as the world of shipping and trade continues to battle with exceptionally high freight rates, cargo rollovers, container and space shortages, fraudulent freight forwarders and their scams seems to be raging on..
Below is a live case study from the USA which I received from a reader, which I am opening up to my readers to comment on..
I am dealing with an issue which isn’t within my normal purview and was hoping you had some quick and easy insight for me.
I have a client that was utilizing a freight forwarder (licensed as NVOCC in the U.S.) to bring goods over from Korea to Mississippi.
As I understand the situation, the forwarder was arranging for transport at all points and retained an over the road carrier to haul the goods from a rail yard in Memphis, TN to the ultimate location in Mississippi.
After 22 shipments it came to light that the forwarder never paid the carrier and now the carrier has sued both my client (the consignee/buyer) and the forwarder who appears to have flaked.
My client has paid the forwarder for the shipments including the road haul costs.
The questions are
- Assuming a contract which dictates that the forwarder would be responsible for payment to all intermediary carriers, is the forwarder still the liable party or is there exposure for the consignee?
- If there is exposure for the consignee then is there recourse against the forwarder’s bond?
We all know that there are certain risks and liabilities faced by a freight forwarder in this business but we also know that the liability of a freight forwarder is an extremely complex issue to discuss purely on paper as each case could be different..
The liability of a freight forwarder is intrinsically related to the role of the freight forwarder towards their principal and the third party in the obligation..
What is your opinion of the above case and how should this be handled..