On Friday, April 22, 2022, the Federal Maritime Commission (FMC) issued the first ruling against an ocean carrier for violating the Interpretive Rule on Demurrage and Detention under the Shipping Act (“demurrage and detention rule”) 85 FR 29638 (May 18, 2020).
The case was brought forward in November 2021 by Golden State Logistics (GSL), a drayage company for international ocean containers, after being charged $10,135 in detention fees for 11 empty containers that were returned after free time expired.
Chief Administrative Law Judge, Erin M. Wirth, ruled that Hapag-Lloyd, A.G., a vessel-operating common carrier (“VOCC”) headquartered in Hamburg, Germany, “failed to follow the requirements of the demurrage and detention rule, failed to revise its policies or train its staff, and continued to impose detention when the incentive principle was not met.”
FINAL FMC RULING
- Hapag-Lloyd, A.G. is liable to the United States for the sum of $822,220 as a civil penalty for fourteen willful and knowing violations of section 41102(c) of the Shipping Act of 1984.
- Hapag-Lloyd, A.G. and its agents cease and desist, absent extenuating circumstances, from imposing demurrage or detention when there are insufficient appointments available, including the fourteen days identified above.
- Hapag-Lloyd, A.G. and its agents cease and desist from violating the Shipping Act or Commission regulations, including the demurrage and detention rule.
HOW TO REPORT VIOLATIONS
How Can I Report Unfair Demurrage and Detention to the FMC?
Companies seeking review of unfairly paid demurrage and detention are able to file either a Formal Complaint or Small Claims filing with the FMC. READ THE ARTICLE
The Federal Maritime Commission recently released a video that provides instruction on options the public can use to bring complaints to the agency, ranging from reporting information that may trigger an investigation to initiating formal civil litigation that can provide wronged parties damages and restitution.
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