Eight carriers to face prosecution over exorbitant loadings

An inquiry launched after hordes of complaints about improper surcharges

Under intense scrutiny

Eight shipping heavyweights are now taken to task over their absurd surcharges imposed on consignments, by furnishing details to the Federal Maritime Commission’s (FMC) Bureau of Enforcement (BoE). The companies contacted are CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line; and Zim. Each ocean carrier was identified as having recently implemented or announced congestion or related surcharges. All parties are to submit their loading justifications before 13 August 2021.

The BoE is FMC’s prosecution arm that initiates inquiries or prosecution proceedings after receiving substantial complaints about parties allegedly violating the Shipping Act or the Foreign Shipping Practices Act (FSPA). Ocean carriers are subject to specific requirements related to tariff changes or rate increases, including providing a 30-day notice to shippers and ensuring that published tariffs are clear and definite.

Subject to the “defendants”’ responses, the Commission will deliberate on the loadings’ legitimacy. The considerations are if proper notices were issued before imposing the surcharges, if the purpose of the surcharge was explicit, and clarity on the event or condition which triggered, as well as the conditions that warrant the loading’s termination. Thereafter, the Commission will subsequently initiate enforcement actions for improperly established tariffs where applicable.

Enforcing proper practices

FMC’s Chairman, Daniel B. Maffei said: “The COVID-19 related spike in demand for imports has pushed cargo rates to record highs. We hear increasing reports of ocean carriers assessing new additional fees, such as ‘congestion surcharges,’ with little notice or explanation. The congestion is due mostly to the tremendous volume of traffic coming from ocean carriers and through ports to satisfy the record demand for imports.

“Far from being a sudden occurrence or isolated to a port or geographical area, congestion of the freight transportation system is everywhere and has been going on for many months. It seems to me that these factors would already have been included into the record high rates charged by the carriers.”

He concluded, “As Chairman, I want to know the carriers’ justifications for additional fees and I strongly support FMC’s Bureau of Enforcement’s close scrutiny aimed at stopping any instances where these add-on fees may not fully comply with the law or regulation.”

Marine Online News Team
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