Things You Should Know When Sending A Balikbayan Box

   By: Alma-Luna Reyes

The U.S. Federal Maritime Commission requested the Philippine Consulate of Los Angeles to advise the Filipino American community to use lawfully licensed international cargo moving companies. Such a request from a federal agency is not surprising, after all, Filipinos are among the most frequent sender of goods and other personal via ocean transportation using a corrugated container known as "balikbayan box". In the past year alone, several millions of dollars were generated from consumers who regularly send "balikbayan box" to the Philippines.

The entities who transport these "balikbayan boxes" are known in the shipping industry as Non Vessel Operating Common Carriers(NVOCC). These NVOCC's are licensed as Ocean Transport Intermediaries (OTI's). These OTI's in turn use ocean cargo containers. The ocean cargo containers are then filled up with balikbayan boxes from several individual shippers and are dispatched at an average of one or two per week depending on the volume. To the consumers, these OTI's are known as "door to door" cargo service. It is the OTI or the "door to door" service provider that picks up the package from the sender's home and delivers it right by the beneficiary's doorstep in the Philippines. This "door to door" service is pretty convenient for an average consumer. It allows consumers to send packages regularly without going out of their way. A consumer can just call the OTI of his choice and schedule a pickup.

Moreover, the cost of renting an ocean container is significantly reduced for an individual shipper because the cost is distributed among all senders. It also saves senders the trouble of having to deal tediously with custom officials.

With such convenient way of sending 'balikbayan boxes', why are things not perfect? it is because there were instances of packages being lost or undelivered. There can be several reasons for delivery failures or package losses. Among the more common reasons are: lost at sea, lost in warehouse during custom clearance or pilferage.

If a package is lost at sea, the Carriage of Goods by Sea Act of 1936 (also known as COGSA) provides that a package does not exceed $500.00 in the absence of a declaration value. "Door to door" companies usually say that a free insurance is provided as part of their service; in reality however, they are required by law to cover each package up to $500.00 in the event of loss.

If the value of the goods sent exceeds $500.00, recovery of the actual cost follows if the shipment is covered with a valued inventory or packing list.

Another reason for undelivered packages is the intentional "holding" by OTI's or "door to door" companies. These "door to door" companies claim that they held the packages because of unpaid shipping cost. Consumers on the other hand insist that payment had rendered. In the midst of such controversy, it was found out by this writer that there are several types of Ocean Cargo Service Providers that an ordinary consumer will not be able to distinguish on the outset. In addition to the OTI, there are co-loaders, sub-agents and there are non-licensed operators.

The OTI is usually the legitimate lessee of the ocean vessel container that will be used to load the packages. The co-loaders are independent companies with their own licenses. The co-loaders operate exactly like the OTI's before the eyes of the consumers. They advertise exactly the same service.

The difference is, shipment with a co-loader sometimes takes a longer period because co-loaders can load packages if the OTI cannot fill up the vessel container. Priority is given to packages sent directly to the OTI.

The sub-agents on the other hand, are entities or individuals who pick-up packages, issues invoices using an OTI's or a co-loader's receipt but are independent from both. These sub-agents present themselves to consumers as authorized representatives.

Unknown to consumers, there are usually agreements between these sub-agents and the OTI or co-loaders, both known as principals, regarding independence and limitation of liabilities.

Therefore, when these sub-agents fail to remit the money paid by sender which is not uncommon, the Principals will not ship the goods and will hold those goods in their warehouses until payment is rendered. More often than not, consumer have to make another payment to have the goods shipped.

Those who cannot swallow the idea of having to pay twice leave their packages to rot in the warehouse. In the meantime, the sub-agent who collected the money but did not remit the payment to the Principal is nowhere to be found.

If you are one of those who use "door to door cargo" service, it might help for you to know that those "door to door" companies are regulated by the Federal Maritime Commission.

Applicable regulations are provided by the Shipping Act of 1988 and the Coast Guard Authorization Act of 1998.

Under those provisions, the Federal Maritime Commission requires cargo companies to be duly licensed, to post a $75,000 bond to cover judgment awards in the event of insolvency or dissolution. Cargo companies are also required to publish tariff rates in order to operate legitimately. The disadvantage of shipping with a cargo company that is not legitimately operating is the difficulty of seeking recovery in the event of loss or wrongdoing. A legitimate cargo company posted a bond, thus recovery remains possible even after dissolution or insolvency.

On the other hand, the unlicensed illegitimate cargo companies who never posted a bond can just dissolve their existing company, open a new cargo service under a new name and get away with their liabilities yet remaining in operation. In the meantime, consumers who lost packages or whose payments were never remitted are left without any remedy.

Unfortunately, not all entities or individuals who are actively providing "door to door" service are operating in accordance with the regulations of the Federal Maritime Commission. A number of them do not have the necessary license. Some of them have their own corporate names and city permits but are operating illegally as far as the licensing and bonding requirements of the Federal Maritime Commission.

Some have the license but failed to post the required bond making their license invalid. Others are bonded and licensed but failed to publish tariff rates. Publication of a tariff rate does not affect the consumer directly, but in the event that the entity is audited by the FMC, the erring entity may be subjected to severe penalties which could ultimately lead to a closure. Upon closure, it becomes difficult to recover packages, demand proper delivery or seek recovery.

To make sure that a cargo service provider is duly licensed and bonded, a listing is provided by the Federal Maritime Commission web site at www.fmc.gov and selecting the "view carrier" list. In the absence of an access to a website, it is good to know that 46 CFR Section 515.31 requires "door to door" companies to have their names and license number imprinted on their stationeries and billing forms or receipts that are issued to customers. If you are from Los Angeles, you may also contact Mr. Oliver Clark, the FMC Los Angeles Area representative or Mr. Michael Moneck at (206) 553-0221 if you are from the Seattle area.

So, next time you send your "balikbayan box" through a "door to door" company, it may be a good idea to look at your receipt and see if there is a license number printed. If there is, it may be worth checking the status of that number just to make sure that it is active , not suspended or revoked.

Better yet, ask the provider whether they are licensed and bonded. By dealing with legitimate cargo companies, you can be assured that a remedy is feasible in the event the "balikbayan box" you've work so hard for does not reach the doors of your relatives who are eagerly waiting back home.