Who owes what to whom?
Many freight forwarding companies and customs brokers engage “freelancers” to attract new clients and expand their customer base in the fields of international freight forwarding and customs brokerage. In practice, the freelancers perform a marketing and business development role, while the professional services are provided to the clients by the freight forwarding company or customs broker. Accounts are then settled between the company and the freelancer in accordance with the terms agreed between them.
When the relationship comes to an end, disputes sometimes arise concerning the manner in which the accounts should be settled and the amounts due to each party. This is primarily a contractual matter, to be determined in accordance with the agreement and the parties’ course of conduct. In many cases, the parties agree that the freelancer will be entitled to 50% of the net profit generated from the activities of the clients introduced by that freelancer. Even then, however, complex questions may arise: which sources of income should be included in the calculation; which expenses should be deducted; how income and expenses denominated in foreign currencies should be calculated; how bad debts should be treated; and how any other financial components generated through the business activities should be allocated.
Financial disputes may also arise between importers and freight forwarding companies or customs brokers, including in relation to storage charges, demurrage and other associated costs. For example, where a consignment is delayed for an extended period and is released only after substantial costs have accrued, a dispute may arise as to who was responsible for the delay and who should bear the resulting expenses.