The Federal Maritime Commission reports that two ocean common carriers will pay a combined total of $2.65 million in civil penalties to resolve allegations of misconduct.
One carrier entered into a compromise agreement under which it will pay $1.7 million to resolve allegations it assessed detention charges when appointments were unavailable during allocated free time to return equipment. According to the FMC, this agreement incorporates a significant new provision whereby the carrier will also issue refunds and waivers to impacted shippers.
The other carrier reached a settlement agreement under which it will pay $950,000 to address allegations that it failed to observe and enforce just and reasonable practices regarding its charges related to empty container returns. The carrier also refunded all detention charges collected under the invoices at issue to the impacted shippers and has implemented corrective actions to prevent future violations.
The FMC notes that a compromise agreement is reached prior to the initiation of a formal enforcement action against a targeted entity whereas a settlement agreement concludes an ongoing enforcement proceeding.
Under authority provided under the Ocean Shipping Reform Act of 2022, the FMC accepts complaints disputing charges assessed by common carriers – including demurrage and detention fees – that may not comply with the provisions of that law. The complaint process is separate from pursuing a legal case against violative charges, which can result in reparations such as freight costs, unreasonable fees, and lost business and profits. In addition, shippers can seek alternative dispute resolution services through the FMC or through a pre-complaint settlement with the carrier.
ST&R’s team of former FMC and DOJ litigation personnel, freight forwarders, and administration and congressional staffers can help shippers understand, comply with, and take advantage of OSRA 22. For more information, please contact Jason Kenner (at (212) 549-0137 or via email), Andy Margolis (at (305) 894-1021 or via email), or Ned Steiner (at (202) 730-4970 or via email.)
Copyright © 2023 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.