$22.7 Million Penalty for Shipping Charge Violations

The Federal Maritime Commission reports that it has assessed $22.7 million in civil penalties against an ocean carrier for three types of Shipping Act violations.

– billing customs agents for demurrage and detention charges through the merchant clause found in its bills of lading even though such parties were not involved in moving the cargo ($65,000 penalty)

– failing to include in its published tariff a statement of what demurrage and detention charges were for non-operating reefers ($9.5 million penalty)

– overcharging customers demurrage and detention fees for use of its NORs ($13.1 million penalty)

Regarding the last of these violations, the FMC reversed a determination by the administrative law judge and concluded that the carrier’s NOR billing system was not merely the result of a mistake but rather constituted an unreasonable practice, pointing specifically to the fact that the overcharging happened in about 23 percent of all the carrier’s NOR bills during the entire year of 2021.

ST&R’s team of former FMC and DOJ litigation personnel, freight forwarders, and former administration and congressional staffers can help shippers facing higher costs from carriers. For more information, please contact Andy Margolis at (305) 894-1021 or via email.