Source: The Maritime Executive
Date: 7th April 2023
The Federal Maritime Commission is continuing to move aggressively against what it sees as unreasonable charges and business practices of the major carriers. In a filing dated last week, the Office of Enforcement is recommending that the commission review the tariffs of Mediterranean Shipping Company (MSC) for a possible civil penalty related to its insistence on continuing to maintain an “ambiguous surcharge” in its tariff for congestion.
The effort seeking to impose a civil penalty comes from what appeared to be an innocuous case over a $1,000 congestion fee issued by MSC to a shipper. The carrier recently refunded the charge, but the FMC’s Office of Enforcement found that the carrier continues to have a questionable clause within its tariff which it sees as a possible violation of the Ocean Shipping Reform Act of 2022.
SOFi Paper Products had filed a complaint with the FMC when it was unable to resolve a $1,000 “congestion surcharge,” issued by MSC on a shipment delivered to the Port of Seattle in July 2022. The shipper contended that “MSC neither justified the charge nor explained why the charge was applied.” The FMC reviewed data for the port finding that at that time there were often no vessels waiting and never more than two vessels waiting for a berth. The FMC says that it believes the number of vessels at anchor serves as a “key congestion indicator…Therefore, MSC’s claims of ‘congestion’ as justification for the surcharge appear contrary to facts.”
After the FMC issued an “Order to Show Cause,” MSC sent a check refunding the charges in full to SOFi. The company cashed the check on March 6, 2023. The Office of Enforcement considers this matter closed saying it does not propose any further relief for the complainant.
Reviewing MSC tariffs, however, they are recommending that the commission determine whether the charge was noncompliant and where a civil penalty should be issued. They raise the possibility that similar surcharges may have been levied on other customers. “MSC’s insistence on actively maintaining in its tariff the congestion surcharge is at the heart of this proceeding.”
The FMC has recently taken an aggressive stance against a series of tariffs and fees historically charged by the carriers and which the reform act specifically targeted. As part of its efforts to implement the elements of the act, the FMC last month sent a request for information to large carriers to confirm that they had amended the policies for detention and demurrage (D&D) fees. The FMC is contacting the 11 largest ocean carriers calling the United States to confirm these shipping lines are adjusting their D&D practices after it ordered Evergreen to “cease and desist from imposing per diem charges when the imposition of per diem charges does not serve its incentivizing purposes, such as when empty equipment cannot be returned on weekends, holidays, and port closures.”