Many shippers have fallen victim to seemingly irresistible "ultra-low ocean freight" advertisements, only to discover they've stepped into a carefully designed trap. Unscrupulous freight forwarders exploit shippers' limited knowledge of international shipping processes by offering attractively low origin port rates, then imposing exorbitant destination port charges through various invented fees. This "low origin, high destination" scheme has become one of the most common pitfalls in LCL (Less than Container Load) shipping, often resulting in costs far exceeding initial estimates and potentially leading to cargo abandonment or detention.
Understanding the "Low Origin, High Destination" Scheme
This deceptive practice thrives on information asymmetry. Forwarders deliberately undercut origin port charges—sometimes even operating at a loss—to attract business, while their actual profits come from inflated destination port fees. Upon cargo arrival, numerous unexpected charges emerge, including unpacking fees, handling charges, storage costs, and documentation fees. On certain routes, destination port fees can reach three to five times the origin port costs.
Many shippers focus solely on the origin port's low rates while neglecting to verify destination charges. When confronted with unexpected fees, consignees face a dilemma: pay the inflated costs or risk greater losses through cargo refusal or return shipments.
Three Steps to Identify Deceptive Pricing
Shippers can protect themselves by learning to recognize warning signs:
- Scrutinize quotation completeness: Legitimate quotes detail all origin and destination port fees, including unpacking, handling, and delivery order charges. Suspicious offers often omit destination fees entirely or use vague terms like "actual costs" or "local standards."
- Compare market rates: Origin port quotes significantly below market rates (30% or more) typically indicate a trap. LCL shipping has cost thresholds—unsustainably low origin prices signal forthcoming destination port recoveries.
- Verify destination charges: Request detailed, stamped destination fee schedules from forwarders and cross-check with multiple providers. Disproportionately high fees at any port warrant caution.
Four Protective Measures for Shippers
Proactive strategies can prevent falling victim to these schemes:
- Negotiate "all-inclusive destination agreements": Formal contracts should specify all destination fees, currencies, and a "no additional charges" clause. Stipulate that undisclosed fees become the forwarder's responsibility.
- Select certified primary forwarders: Established forwarders with direct carrier contracts maintain transparent destination port operations through reliable agents, unlike smaller operators who profit from hidden markups.
- Clarify trade terms with consignees: Under FOB terms, while consignees bear destination costs, shippers must provide accurate fee estimates to prevent refusal. For CIF/CFR shipments, shippers assume all risks from undisclosed destination charges.
- Consider alternatives for small shipments: Low-value or sample shipments might benefit from courier services with fixed all-inclusive rates, eliminating unpredictable port fees.
Damage Control When Trapped
If already ensnared in this scheme:
- Immediately request the forwarder to negotiate fee reductions with destination agents
- Present original quotations and agreements as evidence against unauthorized charges
- Escalate through freight forwarding associations or e-commerce platforms if unresolved
- Preserve all documentation for potential legal recourse