Economic pressures brought on by a shrinking cargo market appear to have cost a Hong Kong shipper more than US$300,000 after a forwarder apparently spurned procedure to keep a customer happy. Fledgling operator Comet (HK) had been supplying Bitways Global Sourcing, a German buyer, with aluminium scooters sourced in Taiwan. Comet had shipped between 100 and 150 container-loads of the toys with the Hong Kong arm of United States-based forwarder Geo-Logistics with little problem - until January, when Bitways failed to pay the balance owing on the latest shipment. Comet director Bimal Selarka looked into the matter and was told Bitways had filed for bankruptcy a month earlier. Moreover, when he tried to reclaim the goods from the port of Hamburg, where they had been shipped, he was told the goods had been released to the consignee, even though Bitways had no original bill of lading - effectively the receipt. 'It is already very hard to do business in this market without these kinds of problems,' Mr Selarka said. Industry insiders said Mr Selarka's case highlighted the influence buyers wielded when the global economy faltered and the risks of cutting procedural corners. Mr Selarka said he was not informed the containers were released, and had in the past four months contacted Geo-Logistics' head office in the US, and its branch offices in Germany, Britain and Hong Kong for compensation. There has been no response. One thing Mr Selarka was able to find out, however, was that the practice of forwarders releasing shipments to the consignee was not uncommon. Other forwarders he had used claimed to have at times taken the same short-cut with his goods, particularly when dealing with important, familiar buyers. It was a way of maintaining a 'good relationship', they said. An official with the port of Hamburg did not deny shipments might be released without a bill of lading, but stressed the practice was not unique to Hamburg. Nor was it unique to Geo-Logistics. Depending on the trading conditions, the practice could be considered perfectly legal, even if outside recommended procedure. 'It does not go wrong very often. And it is beyond the port's influence how shipping companies and consignees conduct their business,' the Hamburg official said. One European Union-based forwarder confirmed it happened and everyone knew it was outside procedural guidelines, but not without risk. 'We are not supposed to release any goods without the bill of lading,' the forwarder said. 'If we do, and there is a problem, the forwarder is usually responsible.' Asked if it was the same in Hong Kong, director of Hong Kong Association of Freight Forwarding Agents Alice Lui said: 'We strongly promote the use of the bill of lading. Forwarders should never release anything to anyone who is unauthorised. It is not the required practice, and we do not endorse this type of practice.' Mr Selarka is pursuing compensation through legal channels, but pointed out this was not a good result, especially if the goods were of low value. The process would take a year and could cost US$30,000. As such, he said, most shippers negotiated a compromise settlement, allowing the practice to continue. Even if Mr Selarka recovered the goods through the courts, he said, the scooter craze had passed. What was worth US$30 a unit in October when the bills of lading were signed was now worth less than US$10. Geo-Logistics (HK) general manager Tang Hon-nam did not know the specifics of the case. 'We have passed the case to our insurers, who have appointed a lawyer to investigate,' he said. The lawyer did not return South China Morning Post calls.
