 Shipping Penalty Practices Reformed Under FMC Rule |
Source |
American Shipper |
Post Date |
05/30/2024 |
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The Federal Maritime Commission has issued a final rule that, effective May 28, will establish new requirements for how shipping lines and port facilities bill for demurrage (fees ged for cargo containers exceeding allotted free time at a terminal) and detention (fees ges for use of carrier-provided containers beyond the allotted free time). This rule implements parts of the Ocean Shipping Reform Act of 2022 and includes the following provisions.
- Vessel-operating common carriers, NVOCCs, and marine terminal operators must include specific minimum information in demurrage or detention invoices; failure to do so will eliminate any obligation of the billed party to pay the ge.
- VOCCs, NVOCCs, and MTOs can issue demurrage or detention invoices to the consignee (the person to whom final delivery of the cargo is to be made) as well as the person for whose account the ocean transportation or cargo storage is provided and who contracted for those services. Invoices cannot be issued to multiple parties simultaneously.
- VOCCs and MTOs must issue detention and demurrage invoices within 30 calar days after the ges were last incurred, while NVOCCs have 30 calar days from the issuance date of the invoice they received.
- Billed parties have at least 30 calar days to make fee mitigation, refund, or waiver requests and the billing party must generally attempt to resolve the matter within another 30 days.
Federal Maritime Commission Secures Over $2.3M in Civil Penalties from Three Companies The Federal Maritime Commission (FMC) has successfully negotiated compromise agreements with three companies, collectively resulting in civil penalty payments exceeding $2.3 million.
The agreements are the outcome of extensive investigations carried out by the Commission? Bureau of Enforcement, Investigations, and Compliance (BEIC), which was d as a result of the Ocean Shipping Reform Act of 2022.
Shipping giant CMA CGM, S.A., an ocean common carrier, settled allegations of overbroad application of its merchant definition in a bill of lading by paying a hefty $1,975,000. The company was accused of wrongfully billing a third party. In addition to the financial penalty, CMA-CGM has agreed to reform its practices and am its U.S. tariff rules, ensuring future compliance by limiting the merchant definition in its bills of lading to shippers, consignees, and individuals with a beneficial interest in the cargo.
Vanguard Logistics Services (USA), Inc., an ocean transportation intermediary (OTI), resolved allegations of unlawful acceptance of cargo from OTIs lacking necessary sureties by paying $175,000. Vanguard is now committed to auditing its internal practices and procedures and will provide quarterly s to BEIC.
Shipco Transport, Inc., another OTI, resolved three allegations of misconduct with a $155,000 payment. The company was accused of unlawfully accepting cargo from OTIs without necessary sureties, allowing an unlicensed OTI to secure transportation for property at reduced rates, and enabling another OTI to secure transportation at less than the applicable rates by granting access to service contracts of an ocean common carrier.
Both Vanguard and Shipco have pledged full cooperation with BEIC in any future investigations or enforcement efforts. These compromise agreements were reached before the Commission initiated any formal enforcement actions, and none of the three companies admitted any violations of the law.
The civil penalty payments will be deposited into the United States?General Fund. The Federal Maritime Commission does not receive any portion of the collected financial penalties.
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