Not for FMC qualification on the freight forwarding enterprises will have many adverse effects, as follows:
1. Legal compliance risk
Face huge fines: according to the relevant U.S. regulations, not registered FMC NVOCC in the U.S. solicitation of goods is illegal, once reported and confirmed, will face the FMC's rigorous investigation, the amount of fines can easily be tens of thousands or even hundreds of thousands of U.S. dollars, and the ceiling is not capped, enough to make many forwarding companies into financial difficulties, and even face the risk of closure.
Can not legally issue a bill of lading: no FMC qualified enterprises can not legally comply with the identity of the carrier for the shipper to issue a legally binding bill of lading, which means that the enterprise can not be directly responsible for the owner of the goods, the lack of effective legal proof of the transportation of goods and protection.
2.Restricted business development
Difficult to cooperate with shipowners and U.S. freight forwarders: Cannot directly carry out business with shipowners and U.S. freight forwarders, must pass through the intermediate links such as shipping agency or generation, which increases the communication cost and business complexity, and restricts the space for business expansion, difficult to obtain first-hand space resources of shipowners, and also unable to work closely with U.S. local freight forwarders to expand business channels.
Loss of independent pricing rights: can not directly to the shipowner inquiry to obtain more favorable tariffs, only accept the price of the intermediary, can not independently develop and adjust the tariff strategy, difficult to attract customers with more competitive prices in the market, profit margins are limited.
3. Cost and Profit Impact
Increase in operating costs: When making AMS/ISF declaration, it can only be done through shipowners or first-class forwarders, and the cost of each declaration information is as high as US$25-40, while enterprises with FMC qualification can make declaration on their own, which greatly saves costs.
Reduced profitability: profitability is further limited by the inability to bargain directly with shipowners, purchase space, and enjoy tax incentives and subsidies from the U.S. government.
4. Unable to have a 24-hour declaration service system: Unable to have a 24-hour declaration service system to submit declaration information such as AMS/ISF, the cargo declaration, customs clearance status and cargo information are not timely and flexible enough, and the declaration time cannot be reasonably arranged according to the actual situation of the cargo, which may easily lead to problems such as cargo detention and reduce customer satisfaction.