Freight v Haulage Debt Collection

In the world of freight and haulage, subcontracting is nothing new. However, one of the pitfalls is that both sides know very well how logistics should work, creating a double standard for when things go wrong. Our client, in this case, is the British arm of a global freight forwarding business, which provided transport and storage services to a London-based haulier.

That haulier and our debtor had just published accounts showing it was haemorrhaging eight-figure losses for the second consecutive trading period. Our client’s concerns were alleviated to a degree by the credit insurance still in place. A sustained lack of response from the debtor prompted escalation to Advocate to recover the £5k overdue compromising of 15 invoices.

What a load of pallets!

Having gone 100 days without responding to our client, Advocate obtained an update from the debtor within 24 hours. We recovered £3.5k in undisputed invoices 48 hours after being instructed. As for the balance involving the remaining invoices, the debtor came up with a list of industry-typical reasons for nonpayment. These included using the wrong submission email address, incorrect PO numbers, absence of hardcopy invoices, and missing docket numbers. The dispute later expanded to requiring copy emails, which outlined why specific consignments had been credited and why some had not. Although relatively small in value, itemised invoices can still reach a hundred or more lines.

Freight-ful

In this particular industry, resolving disputes is often a painstaking process requiring copious amounts of supporting data. This case was no different. Over the next few days, everything from spreadsheets to emails and scanned dockets were provided, reviewed, and responded to. With the debtor familiar with the ins and outs of industry-specific data, the number of documents provided was akin to a much larger balance. Soon enough, the debtor concurred they had no grounds to withhold the remaining principal sums and cleared the £1.5k balance plus statutory late payment charges.

Tempting Freight

To their credit, and for a business haemorrhaging money, the disputes raised were surprisingly coherent and pointed more towards there being a lack of administrative skills in accounts payable. However, the level of detail and ease at which the copy documents were accepted reaffirmed the intention of one haulier to kick the can as far down the road as possible against a global freight forwarder. A critical factor in the debtor’s quick turnaround was realising they only had seven days to settle up before incurring additional statutory charges. This motivation ensured the haulier paid up with time to spare!

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