Schenker Cargo China Reaction

     China transportation reacted to the exclusive FlyingTypers report last Friday that Schenkers Non Vessel Operating Common Carrier (NVOCC), has been accused by Ministry of Commerce (MOC) here for operating with a “forged NVOCC license,” according to MOC complaint.
     As from Thursday August 9, all shipping lines have been ordered by MOC to stop working with Schenker, meaning no sales contract, no booking, no bill of lading can legally be drawn with the company.
     China authorities reportedly are examining the matter that could lead to further action.
     Nick Coverdale, Managing Director Piff Shipping Ltd., Hong Kong sees some useful purpose served, as the matter of operating above and below the line is made public.
     But the transportation specialist also emphasizes that the Schenker case may just be one more example of business as usual in China.
     “There are other companies that do not comply with Article 27 of the China Ministry Of Commerce (MOC) regulations.
     “For example there is one company that has made the MOC Blacklist for the past six weeks, but still accepts cargo, issues bills and trades.
     “How they manage to book the cargo—who knows?
     “The company is Awards Agency.
     “A visit to their website and visit to the MOC website shows that they are clearly stopped from being an NVO in China.”
     Among other things the MOC complaint against (BAX) Global International Freight Forwarders (China) Limited -(Registration Shanghai, Schenker China Ltd.) with offices in Ningbo, Xiamen, Guangzhou cites:
     “Illegal conduct NVOCC operations, serious violations of the People’s Republic of China international maritime regulations, rules and disrupting international shipping market order.”
     But Nick Coverdale has another take.
     While not specifically commenting on possible fraud and forgery of legal document charges that may be leveled against Schenkers, he did indicate that others operate without various legal documents as mandated by MOC.
     “Seems MOC has not made clear that a legal NVO cannot accept cargo from an illegal NVO.
     “As I said there are plenty more examples.
     “A Spanish company has an office in Hong Kong, but has registered their bill of lading in China.
     “They have three offices in China without license to even trade in China let alone as an NVO.
     “But they are accepting cargo booking and shipping.
     “I don't understand how the shipping lines can let them do this.”
     For their part, so far Schenkers has been mum on the subject.
     Repeated calls to Schenker's headquarters in Essen, Germany did not yield a confirmation of the reports surfacing in China, nor any comment regarding the matter.
     A person answering the phones said no spokesmen were available, and that none could be reached at nearly 9 p.m. Friday evening August 10.
     Emails sent to the company requesting comment up to press time also went unanswered.
     Schenker, which is a unit of Deutsche Bahn, the German national rail service, saw revenues in Asia almost triple in 2006, compared to 2005, to over EUR2.1 billion, according to a Schenker Web page.
     The company also more than doubled the number of employees in Asia in 2006 to nearly 11,000.
     All of this comes at a time when Schenker China Limited is the official freight forwarding and customs clearance “exclusive supplier” for the Beijing 2008 Olympic Games.
     What impact this latest dust up might have on that situation, if any, is unclear.
     Expanding further on the role of NVOCC in China today, Nick Coverdale notes that the Schenker situation might just be the tip of an iceberg that is much bigger and more troublesome than many outside of China had imagined
     “Conditions here are similar to the FMC when exporting from USA, in as much as if you appoint an agent in China to issue your bill, he must be in his own right an NVO.
     “But looking at adherence to Article 27, my view is that there are a lot of famous companies who have not complied.
     “Schenker (HK) Limited holds a license but that is not good enough to make bookings in China.
     “According to MOC, Schenker China (the company trading in China) does not have a license.
     “Not for me to say who is right, who is wrong, but to book freight out of China as an NVO these days, the law is that the company in China who contracts with the shipper, books with the shipping line etc., must be a registered NVO.
     “Things are heating up in China.
     “This situation is not going to go away.”
Geoffrey