Too good to be true
Fakes, forgeries and misleading claims: ports and shippers would do well to question things more often. Felicity Landon reports
From fake websites to ferry services that evaporate, from undervalued imports to fraudulent goods — it seems that there are plenty of things not to be believed.
Earlier this year, the Port of Rotterdam Authority warned that criminals regularly set up fake copies of its website to lure existing or potential clients into disclosing confidential information or paying fraudulent invoices. It also warned of websites set up for 'storage spoofing' — the sale of non-existent storage capacity, raw materials or other stocks, which the criminal claims to hold at terminals in the port area.
Philosopher and author Professor Anthony Grayling says that accepting things at face value is partly laziness and partly because we all have so much going on in our lives. Think of the 'mad cow map': doing the rounds a few months ago, it was drawn up to suggest that mad cow disease was most prevalent in areas of the UK that voted to leave the EU. It was a claim believed by many.
“People sit down for a few minutes with the paper, have a quick read and don't question things. We really need to sharpen up, be prepared to dig into things and ask more questions generally,” says Prof Grayling.
A controversial example of untruths can be found in some campaigns against port developments.
“Developers must have back-up evidence and studies for their planning applications, but the fact is that certain stakeholders don't have this requirement in the same way,” says British Ports Association chief executive Richard Ballantyne. “There is the ability for campaigners to make claims that are not substantiated, that may inform consent bodies and cause delays. And sometimes it is a case of whoever shouts loudest.”
He refers to more than one case where campaigners used unsubstantiated claims and untruths, and pursued them aggressively to the point where the entire debate became so highly politicised that the plans were scaled down. Other objectors have been “quite adaptable” in their campaigns, switching the reason for their objection from one topic to another quite different one. Added to this, social media campaigns are so instant and easy, he points out. “You can just put things up on social media — of course, a lot would be well-researched and backed by evidence, but there isn't any kind of safety net to ensure that these claims are corroborated.”
Add to this the fact that coastal communities often include retired professionals or people with experience in campaigning or technical issues — and if they come on board, it can be quite a formidable group of stakeholders.
“We can whinge about it and say it's not fair but the challenge is to take stakeholder relations and communication to the next level,” says Mr Ballantyne. “Traditionally trust ports have been very good at this because of their public accountability and their requirement to be open to key stakeholders. But gone are the days when a purely commercial chief executive is needed. Now chief executives are more adaptable and balancing commercial experience with political and stakeholder management skills.”
Customs authorities seeking to crack down on fraud in the supply chain carried out a trial in which containers were selected and taken for inspection at an inland pre-clearance facility in the UK. The result: high levels of non-compliance were found, including undervalued, mis-described and misclassified goods. The inspection system is now part of HMRC's business-as-usual activity.
According to one source in the industry, the trial found non-compliant loads ranging from £30,000 to £80,000 undervalued. “We are talking about goods coming into the UK, so being cleared for the UK and the European Union and then going out to Spain, Italy, France, and so on,” he says.
Customs may try to prevent it but it continues to happen, he says. Bizarrely, it seems quite open in some ways. For example, a trailer parked up had its curtain-side slashed and goods were stolen. The value of the contents of the trailer had been declared at $10,000. The agent involved said they wanted to claim for the lost goods – to a total value of $50,000.
After the inspection trial, HMRC wrote to businesses offering Customs brokerage or shipping services to importers, warning them that they may be targeted by fraudsters simply to carry their goods into the UK. “It is in your own interests to take appropriate steps to protect yourself from potential fraudsters to avoid the risk of becoming jointly and severally liable for any debt accruing from a false declaration,” said the letter.
It added: “We strongly advise you not to ignore this advice. We realise that you will already have a range of controls in place, which will include risk management checks when you do business with a new customer or supplier. Given this new threat, we advise you to review your existing processes to ensure they can protect you against this risk and, if necessary, update your compliance and risk systems.”
The source says: “Of course we have due diligence in place but we are warehouse operators. We don't have the value of everything – what can we do?”
False claims of origin are also an issue. A recent tribunal decision relating to the origin of some garlic was outlined in the HMRC's international trade newsletter. The garlic had been declared as having originated in India rather than China. The reason for this falsification was because it breached the quota from China and would have been liable to an amount of €1,200 per tonne in addition to the 9.6% duty.
The appellants, required to pay the higher amount, appealed against this ruling. “There were a number of innocent parties caught up in this deliberate scam,” says the newsletter. “The fact that they relied on documents subsequently found to have been falsified or inaccurate was not in itself a reason for their import duties to be repaid. Their appeal was dismissed.”
HMRC concluded: “This case highlights the risk of lack of due diligence or failure to ask yourself 'does this look too good to be true?'.”
The mysterious tale of Seaborne Freight in the UK demonstrated that not everything is necessarily what it seems.
In December 2018 the UK's Department for Transport (DfT) awarded a £13.8m contract to Seaborne Freight to run a ro-ro freight service between Ramsgate and Ostend in the event of a no-deal Brexit, to take the pressure off Dover. However, it emerged that the company, formed in 2017, had never run a service and did not have any ferries. In February the UK government ended the contract, after Arklow apparently withdrew its funding; but in March, it emerged that the DfT had not held any face-to-face meetings with Arklow.
Less publicised but equally baffling was an email sent to shippers earlier this year advertising a freight-only 'Brexit-relief shipping route service'. The email, from Sea Freight Europe GmbH, based in Amsterdam but also with office addresses in London and Harwich, invited people to 'purchase [slots] in advance either for safeguarding or investment purposes'.
The email announced that for 180 days from March 30, the company would be running services between Ipswich and Moerdijk – a ro-ro service for up to 70 vehicles per vessel and a container service for up to 750 teu.
The email gave details of prices and stated “initial purchasing is in advance”, inviting potential customers to submit details of journey route, date, number of vehicles/containers and booking name, so that an invoice could be raised.
Shortly afterwards, a notification appeared on the company's website “apologising for any confusion” and stating that: “The journey route planned for Moerdijk to Ipswich region was only ever a provisional option, designed to engage with industry professionals to determine the interest in a Holland/Belgium to East Anglia route during a period immediately after a 'no deal' Brexit'.”
The website stated: “Both Ipswich and Moerdijk were locations that were strategically positioned to allow us to enter into negotiations with a variety of port providers simultaneously, negotiations that were designed to be supported with evidence of interest in the route. At no time however did we enter into a commercial contract with either port provider (ABP or Moerdijk Port Authority).
“Gauging the interest level in this service was designed to enable us to bring leverage in our discussions with said port providers, both to persuade them to accept a new market entrant, and also to negotiate better terms for hauliers during the 'no deal' period.”
A call to ABP Ipswich revealed that there had been no approach to the port. One warehousing and transport company director locally received an email from the same email address offering up to 7m square feet of warehousing in Suffolk and Norfolk. “I'd certainly like to know where that is,” he says.
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