The melons in the freight forwarding circle come one after another. The sequelae of the problem of fake accounts are gradually emerging. As the capital of cross-border e-commerce, Shenzhen has concentrated a large number of freight forwarders. Some freight forwarders were investigated for using fake accounts, resulting in a large number of goods suspected of violating regulations being seized in the United States, and related personnel were even detained. The local authorities took him away for investigation.

Recently, an international logistics company in Shenzhen also announced that it would suspend the receipt of goods due to problems with overseas accounts that cannot be solved in the short term. It can only resume receiving goods after they are resolved. Business has stagnated, and sellers who have cooperated with it can only choose another freight forwarder.

01

Another freight forwarder announced to stop receiving goods

Hugo Cross-border found that among multiple seller groups and freight forwarding groups, a “Notice on Suspension of Receipts of Goods” attracted much attention. The full text of the notice is as follows:

“Dear customers: Thank you for your recognition, trust and support for our company. We would like to express our sincere gratitude! Recently, there have been problems with our overseas UPS, DHL, and DPD accounts, which will take a certain amount of time to resolve. Now our company has decided to suspend Receipt of goods will be resumed after the account is resolved. The specific time for resumption of delivery will be notified in due course. We hope that all new and old customers will understand and support us!”

It can be seen from the above notice that the main reason why the freight forwarding company involved suspended the receipt of goods was that there were problems with overseas UPS, DHL, and DPD accounts that could not be solved in the short term.

Tianyancha information shows that the above-mentioned freight forwarder was established in 2015 and has a certain reputation in Shenzhen, and many sellers have cooperated with it. The freight forwarder involved originally had branches in Shanghai, Xiamen and other places, but some branches have been cancelled. The reason for the cancellation is unknown.

From a risk perspective, the case disputes of this freight forwarding company are concentrated in 2021-2023, mainly freight forwarding contract disputes. In 70% of the cases, it is the defendant, but the number of cases is not large, with a total of 6 cases. Hugo Cross-Border found that since 2020, freight forwarding companies have applied for a large number of trademarks, and the categories involve transportation and storage, advertising and sales, scientific instruments, transportation tools, etc., such as “**Lu Airlines”, “**Express”, “** “Quick Qatar Airways” etc., but 91% of the trademarks it applied for were invalid, and only 4.35% of the trademarks were successfully registered.

According to a person in the freight forwarding industry, the news he learned is that an important factor in the suspension of goods collection by the above-mentioned freight forwarders is that something happened to the Belgian customs clearance house, and the goods involved have to be locked in a bonded warehouse and can only be released after a period of time. According to his analysis, if there is a large-scale inspection and deduction of goods, coupled with the current market situation, it will be difficult to survive. The most common items that are inspected are warehouse rental fees and inspection fees, which may be covered by millions of dollars of funds. But if sensitive goods are inspected, the fines and fines may cost tens of millions of dollars, which is a huge pressure.

There is also news that some freight forwarders quote prices for balancing scooters that are lower than ordinary goods. Once found out, they cannot afford to pay for the taxes.

02

The second round of rigorous investigation continues

Fake accounts are also called “fake orders”. They take advantage of UPS loopholes, open a UPS account in the name of a trading company, promise the volume of goods, get discounts, and then go to the market to collect or sell goods at cost price or a slightly lower price. When placing orders for others, because the payment method with UPS is monthly, it means there is no business to receive the goods in the early stage until the payment is delayed until UPS closes the account.

Beginning in May this year, UPS, the United States Postal Service and many other U.S. express delivery companies have introduced strict measures to strictly investigate issues such as stealing areas, stealing weight, and fraudulent account numbers.

According to industry sources, although the number of fake accounts has dropped significantly after the first round of rigorous inspections, some freight forwarders still take risks and use fake accounts. Therefore, UPS, the United States Postal Service and other express delivery companies have launched a second round of rigorous investigations.

In addition to the issue of fraudulent accounts, airlines have recently stepped up shipments of goods from China to overseas. An airline sent an email to agents and relevant airline departments stating that the U.S. CBP suspects that illegal items have recently been transferred from China to the United States via a certain place, with LAX, NYC, and CHI as the arrival centers. It is suspected that these goods originate from Shenzhen. The center is showing a growing trend, and most of the submitted documents do not match the goods. If illegal items are discovered, CBP will impose fines on airlines. The airline stated that it will resolutely prevent the loading of corresponding illegal goods. If the submitted documents do not match the actual weight, volume, number of pieces, etc. of the goods, they will not ship them. When suspected illegal items are found during security inspection, security inspection will be strengthened.

It is understood that an airline received a fine from the U.S. CBP. A shipment of goods departing from Shanghai to the United States in July was declared as hats, but was actually medicine. CBP imposed a fine of US$5,000 on the cargo and warned that if it happens again in the future, If this happens, more severe penalties (more fines and other additional measures) will be taken. The airline said that in order to comply with the regulatory requirements of the U.S. Customs, it will also take punitive measures including suspending orders on the violating agents in the future to strengthen management.

After investigation, it was found that the actual owner of the cargo was a Chinese logistics company. The Shanghai office of the above-mentioned airline decided to add it to the embargo list, and required the logistics company to check the customer list, eliminate potential risks in a timely manner, and at the same time inform the sales and operations staff again It is emphasized that goods shipped to the United States must be checked to see if the goods are consistent with the declared content. If there are suspicious goods, they will be rejected immediately.

Non-compliant products, incomplete documents, delayed customs clearance of offshore tax numbers, etc. are called the “original sins” of e-commerce goods. Many export goods face the situation of failing to pass inspection at overseas ports. Last year’s Belgian incident is a heavy example. Lessons learned. At that time, 18 domestic freight forwarding companies, more than 200 customer groups, and 43,085 boxes of goods were involved. Customs determined that the fine was equivalent to tens of millions of yuan, involving the entire link of air transport, Qatar Airways, sea transport, and railway.

All in all, overseas logistics companies and customs are becoming more and more strict about the relevant procedures and inspections of cross-border goods, which also forces sellers to find logistics service providers that can help them become legal and compliant. For freight forwarders involved in the scandal of fake accounts and teetering on the edge of rules, this is both a challenge and an opportunity for transformation. A new round of elimination in the freight forwarding industry has also begun.