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Lots of shipping / forwarding companies follow this blog !!! Your thoughts on this one please
A FREIGHT forwarder was charged $859 after making a typo-error on a pre-receival advice form on the Verified Gross Mass form for a box sent to DP World Australia at West Swanson Dock.
On or about July 18, the freight forwarder accidentally dropped a zero, resulting in the weight being incorrectly declared as 1,800kg instead of its true weight of 18,000kg.
A very big bill for a typo
DP World Australia then, on or about July 20, sent a bill with four charges totaling $859 as follows:
$220 – box received, but not shipped
$98 – two yard moves
$231 – for two storage days (day 1 box into terminal; day 2 box out of terminal)
$210 – for truck to take the box out of the terminal again
Tom Pinder of Australian Coastal Shipping, who was acting on behalf of a client (identity not supplied) decried the charges:
“For what? For something that could have been corrected by charging the typo within the terminal? It’s absolute usury! Received but not shipped?! That’s nonsense!”
“My customer had to pay over $800 extra for something that could have been fixed at the stroke of a pen? What’s the point of having computers if you can’t fix things like this? Even if they had to pay $200 for it? I was formerly a terminal manager for what was then National Terminals in the late 80s, so I do understand the situation. It is completely beyond me why this couldn’t be fixed,” Mr Pinder inveighed.
Lloyd’s List Australia contacted the Australian Federation of International Forwarders for a response. Brian Lovell, CEO, commented, “naturally, this seems outrageous, but we would have to know the full details.”
Stevedores won’t amend declared box weights
DP World Australia provided a response (see below for the response in full). In summary, the stevedore asserted that the law puts the onus of weight verification on the shipper, packer or freight forwarder; that the stevedore is not in a position to change the stated weight as, among other things, it has no way to verify the weight, and, accordingly for legal and practical reasons, DP World Australia personnel cannot correct the error.
Incidentally, it appears that the two stevedores are of one mind on this particular point. Patrick released a statement in May this year asserted that no box will be shipped without a VGM as part of the Pre Receival Advice; that the shipper is responsible for obtaining, documenting and providing the VGM.
Asciano then adds: “Patrick Container Terminals will not amend any container weights. If a shipper wishes to amend a weight after the container has been received at the terminal, the container will be placed on hold and moved into storage. The container must then be taken out of the terminal via B959 Customs Release process, and a new PRA is to be submitted with the new VGM.”
Fees, fees, fees
In respect of the fees charged, DP World Australia said: “the charges applied to containers that are received in to the terminal and subsequently removed are part of our contractual arrangements with shipping lines.”
When asked whether the charges were being applied simply to boost profits, the stevedore said: “Not at all. There is actually both a cost to DP World Australia for removing containers from our terminal plus a missed revenue opportunity to load that container, which is why we charge our shipping lines accordingly.”
Lloyd’s List Australia sought comment from two lawyers both of whom pointed out that the situation will be governed by the terms and conditions of the contract. However, it was pointed out to Lloyd’s List Australia that the issue of penalty charges may be a factor.
Penalties, penalties, penalties
In deciding whether or not the stevedore fees are penalty charges, a court would have to decide one of two things –
- Whether the fees were agreed between the forwarder and the stevedore as the price for the performance of a contract; or if not,
- Whether the stevedore charges were applied because of a breach of the breach of agreement.
If the charge is applied because of breach, then the further question arises as to whether:
- the charges are a genuine pre-estimate by the stevedore of losses incurred; or
- whether the charges are in excess of the cost that the stevedore suffers.
To put this in context, while DPWA charged $859 to not put a container on a ship, Mr Pinder of Australian Coastal Shipping says that it costs $250 to put a container on a ship. He also queried the validity of the storage fee on the grounds that the number of boxes did not alter and the ship was alongside in free time. And while accepting the storage fee, he did not accept the ‘received but not shipped’ fee.
“DP World Australia had no more boxes there than they would have had, had it gone. The numbers of boxes didn’t change one iota. ‘Yard moves fees’, something is moved so there is a cost, I understand that. But I don’t understand ‘received, not shipped’. I don’t understand,” Mr Pinder said.
One of the lawyers also added that, in his view, the “received but not shipped” fee is very like a storage fee and he added that he would like to see the justification for that fee.
The lawyers also pointed out that any court decision would, as always, turn on its facts.
DP WORLD AUSTRALIA’S FULL RESPONSE TO LLOYD’S LIST AUSTRALIA
The onus on weight verification is the responsibility of the shipper, packer or freight forwarder of the goods. This is standard across all terminals, and was advertised widely prior to the commencement of new SOLAS regulations.
DP World Australia is not in a position to make a change to the stated weight of a container on behalf of any party. The unit had to be removed, and the weight rectified, prior to re-entry and loading under new SOLAS requirements.
We take our role and responsibility as a loader of containers and the safety of our employees — and anyone else within our terminal — very, very seriously. The fact that the container was declared as 1,800 kgs when the actual weight of the container was 18,000 kgs presents a real safety risk. The omission of one lazy digit represents an unaccounted 16,200 kgs of freight.
Questions & Answers with DPWA
LLA: Please explain the justification for the fees – why does it cost so much?
DPWA: The charges applied to containers that are received in to the terminal and subsequently removed are part of our contractual arrangements with shipping lines.
LLA: Does DPWA have the capability to correct this error?
DPWA: No. The legislation places the onus on weight verification with the shipper, packer or freight forwarder of the goods. DP World Australia personnel cannot correct the error.
LLA: If DPWA had the capability to correct, why it did not?
DPWA: DP World Australia cannot correct the stated weight as we have no means of verifying the weight of the container.
LLA: Why should these fees not be regarded as penalty fees?
DPWA: The charges applied to containers that are received in to the terminal and subsequently removed are part of our contractual arrangements with shipping lines.
LLA: Was this was good customer service on behalf of DPWA or not?
DPWA: Per the above, we are not in a position to make any weight changes to a PRA. We take our role and responsibility as a loader of containers and the safety of our employees — and anyone else within our terminal — very, very seriously. The fact that the container was declared as 1,800 kgs when the actual weight of the container was 18,000 kgs presents a real safety risk.
Not only are should we be concerned for the safety of our employees and the vessel’s crew, but also the general public as this container would have travelled on our local roads with a mis-declared weight, which was out by over 16 tonnes.
DP World Australia can assist to facilitate the correction by coordinating the release of the container with the shipping line in a timely manner.
LLA: Is DPWA is using incorrect PRAs for VGM purposes as an opportunity to charge fees so as to improve profitability?
DPWA: Not at all. There is actually both a cost to DP World Australia for removing containers from our terminal plus a missed revenue opportunity to load that container, which is why we charge our shipping lines accordingly. The legislation is clear: we must not load a container without a correct VGM. Over and above this, safety is non-negotiable and we are very thankful and lucky that no one was seriously harmed.
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That's nothing. Why not investigate the charging schedules for towage by Svitzer Australia in the Port of Melbourne? You will see some serious price gouging there.
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