Importers urged to fight Chinese 'surcharges'

SA importers from China have hit back at the punishing extra charges on their imports as kickbacks to the Chinese groupage operators are cunningly inserted in the final freight cost under a number of creative titles. “It has led to serious unhappiness among importers using groupage services, especially from the Far East,” said Mike Walwyn, director of Seaboard and director of the SA Association of Freight Forwarders, “and comes up at every Saaff board meeting. “The basic problem is with importers who purchase goods on a CFR or CIF basis,” he told FTW. “Their supplier is sold what looks like a fantastically cheap freight rate by a groupage operator in the country of origin. “But, when the cargo arrives here, the importer is charged stratospheric prices to get his cargo released. When this is queried with the local agent of that operator, the common refrain is that they have to remit a major proportion of the money back to the overseas principal, to cover the actual freight cost, which was, of course, far higher than what was sold to the exporter.” The problem with this, according to Walwyn, is that apart from the possibility of abuse, all freight on a CFR or CIF shipment should form part of the purchase price. Secondly, the full freight amount paid should be shown to Customs, so that the value for Customs purposes can be assessed on an FOB basis. That might change when the new Customs Acts were promulgated, he added, but for the moment it’s a legal requirement. The operators concerned have come up with a variety of creative ways of extracting money from importers. “We see ‘China surcharges’, ‘foreign exchange fluctuation fees’ (where no foreign currency is involved), grossly inflated unpack and cargo dues charges and many other similar ‘laundry list’ items,” said Walwyn. “The effect is that the importer ends up paying more than he would have if he’d shipped the goods as FCL cargo, even when the parcel size is relatively small.” Indeed, in two particular cases Walwyn looked at, even airfreight would have been cheaper. He also highlighted the possibility of abuse. “I’m dealing with a current case where the local operator is charging the importer storage at the rate of R120 per cubic metre per day,” he said, “when we know that the depot concerned is only charging the operator R2.20 per day. This resulted in a storage bill of R61 000 on a cargo that is only valued at R100 000. And the real cost to the operator was around R1 200!” The real message to importers is to buy FOB or ex-works, according to Walwyn, and establish the costs up front. “Otherwise,” he said, “it’s a bit like playing the lotto – except in this case there’s only one winner.” And one thing he does insist that the importer should do when faced with these extra charges is – “argue like mad”. “Threaten them, and make their life uncomfortable. If you do that there’s a fair chance that attempts to impose these extra charges will be nipped in the bud.” However, this local industry concern appears to be having little impact on the growing incidence of this ‘China import service fee (CISF)’, which surfaces with clockwork regularity in correspondence forwarded to FTW.