Overcharged by Shipping Company

From Jonesberries: Has anyone else had this problem?

Hoegh Autoliners was the shipping company that we used to get our camper van to New Zealand. The original quote from Sefco was US 4.798, which we paid on the 12 May, 2012.

All went well. Our camper made it on the boat and sailed for New Zealand. We did it RO-RO.

When I went to pick it up, there was an additional charge for $NZ 676 which I paid and then took possession of my truck which is now stored on a farm. But since that time there has been emails and phone calls regarding further costs that I now need to pay.

I have been requesting an invoice so that I could see what these costs were and it finally arrived today, 3 weeks after my truck arrived in NZ.

This is my first time bringing a vehicle into my country so I am not an expert on this but I am learning a lot as I go along.

Hoegh estimate of what I or somebody owes them is US$6,800.68 for extra costs, in addition to whatever other costs I have already paid them.

Sounds like extortion to me . . .

From what I can see on the invoice,

– Hoegh’s BAF [Bunker Adjustment Factor) rate of 25.24 is not only far higher than any other shipper I have researched, but it is also higher than their stated rates as of July 2011. However, BAF was considered “inclusive” in my original qu0te and initial invoice.

– Hoegh wrongly estimated the size of my camper van and wants to charge extra for the assumed difference. They say its 74.086 but the dimensions are exactly 2.4 x 3.65 x 812 = 7117. This extra cost then upgrades all other costs based on the volume which makes it all balloon into a large and innaccurate sum of money.

– Hoegh will not acknowledge receipt of 438 Euros which I paid them in May as another “extra charges” bill for NZ$$676.89 from invoice #1611 .

So what I will probably do is ask them to refund the NZ$ 676, since they will not acknowledge its receipt. Then I might send them an exact photo of the truck so they can recalculate.

Above that, I dont think there is much I can do, except NOT shipping with Hoegh the next time.

Am I the only one who has run into this problem?



Email sent to Hoegh:

Rosa and Rolf

I am addressing this to you as representatives at Hoegh. Before I respond to Seaway, I would like to hear from you or someone else who can answer my questions.

In my opinion, this whole mess is a joke and one that could reflect poorly on Hoegh when it appears on the internet.

I am referring to the invoice from Hoegh Autoliners BL# HOEGLI37BRAK0001 that arrived June 18th, 3 weeks after we took delivery of the truck.

This is the third invoice: The first was paid in April 2012, the second invoice for extra charges was paid on May 30 (although not acknowledged by Hoegh). This third invoice is for extra-extra charges and it is not valid, nor does it reflect the transactions that have taken place so I therefore refuse to pay it. Read on for more information.

I had not seen this invoice before June18th and had no idea what the “outstanding charges” might be. The invoice but does not represent accurately the previous exchanges of correspondence or monies paid. Hoegh should be embarrassed about presenting it.

Some of these invoice items were included in my original invoice from Sefco (which btw was “inclusive” of charges including BAF) and another from Seaway (invoice #1611) which somehow managed to not be included in this tally. The unexplained increase of charges to Sefco is something I don’t understand but I don’t see it as something that concerns me.

What does concern me, however, is the lack of integrity and transparency that this invoice represents. As a blogger, and social activist, I am interested in Hoegh’s explanation for what appears to be bogus charges, and also interested in what their answers to my following questions would be. My readers would also be interested. If someone representing Hoegh could give their best responses to the questions below, it would be much appreciated. I will be happy to provide links to the various blogs and websites once they are posted.

1. The volume of the cargo was wrongly estimated by Hoegh. I have just had it accurately measured once more and the exact volume is 71.17 and not 74.086. My measurements are as follows 2.4 x 3.65 x  812 = 7117. I will glad submit to a second opinion.

Only a 4% difference from Hoegh’s estimation. Not so much, really,  with a small amount applied to a single vehicle, where the difference is negligible. But applied to larger contracts like Daewoo’s SME or Shell’s FLNG in Australia, it all adds up to some very large numbers.

It also has a knock-on effect. For example, my motorhome was charged $190 to clean at the port, and also incurred a $400 a day demurrage fee, both charges based on Hoegh’s faulty measurement and 4% more expensive than it should have been.

What I am saying is that it’s the principle that counts, not the tiny bit that Hoegh was trying to overcharge me. Scale the 4% to a larger account and the results are exponentially significant.

It is worth noting, also, that if my vehicle was still held in port because of Hoeghs incompetence and greed, the total demurrage cost would be, as of today, over $NZ10,000, which is much more than the original purchase price of the vehicle and a ridiculous amount of money to pay.

2. The 438 Euros itemized on the invoice was already paid last month and deposited to the appropriate Hoegh account  [invoice #1611, paid May 30, 2012]

Did Hoegh expect me to just pay the invoice without checking the details?

It is unethical to charge the same amount twice and I refuse to pay it again. Why should I? Because Hoegh lost their paperwork? If Hoegh cannot acknowledge this transfer into their account, or if they refuse to, can I humbly suggest that someone please return the funds to sender and I will be happy to send it directly to the port at Bremerhaven where it belongs.

But again, I have to ask . . .  is conveniently displacing or forgetting a paid invoice a habit of practice at Hoegh? Because applied on a larger scale to bigger companies, [one has to imagine] this could lead to very expensive oversights to the benefit of Hoegh and to the cost of its business partners.

Hoegh made US$110 million dollars last year, an increase of 15 million from the previous year. Am I to believe that this is all legitimate business profit or would this be naive of me, considering the various oversights that this one particular invoice represents?

3. The BAF on this invoice, at 25.24 w/m,  is far higher than it should be and Sefco should be protesting it. Even at the correct volume of 7117, as opposed to Hoegh’s erroneous estimation of 74.086, the BAF would amount to $1796.33 which is higher than any other shipping company I have researched. And it does not reflect by any means the fluctuations of bunker fuel price that actually worked in Hoegh’s favor since April, the time of shipment.

According to Bunkerindex.com [http://www.bunkerindex.com/] the price of bunker fuel actually decreased over the shipping period and yet Hoegh’s BAF rate, which was originally designed to reflect the fluctuation in bunker fuel prices, actually increased.

Could you explain that increase???

And not only did Hoegh’s BAF increase on this shipment, it increased above their publicly stated BAF rate (released July 1, 2011).

Is it legal to apply a higher BAF than what you publicly declare?
To what extent are BAF charges indiscriminate?
By that question, I mean, if someone at Hoegh was having a bad day, what regulations are currently in place to prevent that person adding an unexplainably high bunker factor adjustment? Or more specifically, do you think the Liner Block Exemption and Regulation 4056/86 is a opportunity for companies like Hoegh to write their own ticket?

If you have the time, your answers to these further questions would be most appreciated:

1. Should ro-ro shippers and cargo exporters trust their shipping company to measure the cargo correctly or must the customer take care of the measurements themselves?

2. In a post-conference liner age where “price fixing” is the norm, should we continue to trust the shipping companies to regulate themselves or should we give greater power to the ELAA [European Liners Affairs Association) to regulate these financial instruments?

3. The European Shippers’ Council have suggested that the way BAFs are determined is “opaque, without uniformity, and involves a significant element of revenue-making.” This is exactly the kind of opaqueness that caused Maersk to switch from BAF to SBF last month. I It appears that shipping companies in general are moving away from fuzzy charges and imbalanced scales towards greater transparency and benefit for all parties. Do you think Hoegh will be following its competitors in the near future to eradicate excessive revenue-making with opaque financial instruments like the BAF, for which Hoegh appears to have the highest rate in the world?

Your response is much anticipated.


Andrew Jones has been blogging since 1997. He is based in San Francisco with his two daughters but also travels the globe to find compelling stories of early stage entrepreneurs changing their world. Sometimes he talks in the third person. Sometimes he even talks to himself and has been heard uttering the name "Precious" :-)

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