FMC Slaps MSC With $22.7M Fine Over Billing Violations

The Federal Maritime Commission (FMC) has deed Mediterranean Shipping Company (MSC) with a $22.7 cardinal good implicit 3 violations of the U.S. Shipping Act.

The enforcement enactment centers connected 3 main issues: who MSC billed for precocious fees, however it handled the disclosure of rates for definite containers and repeated overcharges tied to those containers.

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After concluding a two-year probe that started successful August 2023, the committee upheld and expanded connected a anterior ruling by an administrative instrumentality judge.

Sourcing Journal reached retired to MSC.

First, the FMC flagged MSC for wrongly invoicing definite customs brokers and forwarders listed for demurrage and detention (D&D) fees from 2018 to 2020.

According to the FMC’s 15-page bid of investigation, the world’s largest instrumentality shipping institution utilized a wide “merchant clause” successful its measure of lading to levy the fines. The clause defined a “merchant” to see not conscionable the shipper and consignee, but besides different parties listed connected the document, including the “notify party.”

These notify parties included freight forwarders Alexander & Co. and John S. Connor, arsenic good arsenic customs clearance services supplier Welke Customs Brokers USA, each of which were asked to wage D&D fees.

However, the bureau recovered that those companies had nary beneficial cargo involvement and often had nary relation successful physically moving the containers.

The committee determined that this signifier violated the Shipping Act’s request that carriers support “just and reasonable” practices related to cargo handling.

Demurrage and detention are meant to enactment arsenic fiscal incentives to determination containers and “promote freight fluidity,” the 65-page determination read. Billing parties that person nary power implicit instrumentality pickup oregon return, the FMC concluded, does not service that purpose.

The bureau upheld findings of 13 violations tied to this billing approach, assessed $65,000 successful penalties and issued a cease-and-desist bid barring MSC from charging specified fees to parties that are not shippers, consignees oregon cargo owners.

Another information of the penalties stems from MSC’s nonaccomplishment to intelligibly authorities the applicable rates oregon rules for non-operating reefers (NORs) erstwhile publishing its tariffs. In this case, “tariffs” notation to documents the FMC requires water carriers to people that database rates, rules and other charges for shippers.