Hapag-Lloyd has been fined USD 822,000 by the FMC for violating US shipping law. The German container line is mulling its next move, the carrier informs WPO.
Photo: Mohamed Abd El /Ritzau Scanpix
Hapag-Lloyd has received a fine of USD 822,000 for having violated US shipping law by imposing unreasonable fees on its customer Golden State Logistics, even though the customer tried to deliver empty containers at the terminals in Los Angeles and Long Beach on time.
The US Federal Maritime Commission (FMC) issued the fine in a ruling signed by Chief Administrative Law Judge Erin M. Wirth.
The FMC’s Bureau of Enforcement (BOE), which has investigated the case and carried out a hearing of the parties, states that Hapag-Lloyd’s violations are so severe that the German carrier should be fined USD 16.5m because, according to the bureau, the company knowingly broke the law.
We will review the ruling thoroughly and thereafter take potential further legal steps
Hapag-Lloyd spokesperson
But according to the FMC’s decision, BOE hasn’t been able to provide sufficient evidence for that. As such, Hapag-Lloyd is fined only a total of USD 822,000 for having violated the legislation.
The fine thereby amounts to USD 65,666 per container on which Hapag-Lloyd has imposed fees with the customer. There were 11 containers.
”Hapag-Lloyd’s policy and practices do not comply with the demurrage and detention rule. Therefore, a significant penalty is required to deter future violations and ensure compliance with the demurrage and detention rule,” BOE points out in the ruling.
Will review decision
The case pertains to Golden State Logistics having tried to return 11 empty containers but being blocked from accessing port in order to deliver the boxes.
As such, Hapag-Lloyd imposed fees on its logistics customer.
The parties disagree as to whether there’s been time and opportunity to return the containers at the terminals in Los Angeles and Long Beach on the US west coast, which have long been suffering under bottlenecks and, for some periods, Covid restrictions.
Following political pressure, the FMC has this past year been boosting its efforts to keep carriers in line as a consequence of bottlenecks on the container market and the extremely high freight rates.
This has led to criticism of the price and fee policies of container lines and brought the shipping industry to the eyes of US policymakers.
The FMC is currently engaged in cases involviong three major carriers and alliances.
”We will review the ruling thoroughly and thereafter take potential further legal steps,” a Hapag-Lloyd spokesperson writes to WPO in an email.
English edit: Jonas Sahl Hollænder
