The U.S. Federal Maritime Commission (FMC) announced that it is checking in on Vessel Operating Common Carriers’ (VOCCs) and Marine Terminal Operators’ (MTOs) compliance with FMC’s recent ruling finding that per diem charges issued during port and terminal closures do not comply with the U.S. Shipping Act. The FMC is actively seeking information to confirm that VOCCs and MTOs are complying with the recent ruling issued in TCW Inc. v. Evergreen Shipping Agency (Am.) Corp. & Evergreen Line Joint Service Agreement (Docket No. 1996(I)).

In December 2022, the Commission ordered Evergreen to “cease and desist from imposing per diem charges when 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.” The Commission held that charging per diem when a port was closed, and equipment could not be returned, was unjust and unreasonable.

The Commission is now working through its Vessel-Operating Common Carrier Audit Program to contact the 11 largest VOCCs calling the United States to confirm these shipping lines are adjusting their demurrage and detention practices accordingly. A separate outreach effort to MTOs will also be conducted to ensure they are fully complying with the FMC’s detention and demurrage regulations.

VOCCs, MTOs, and non-vessel operating common carriers (NVOCCs) that do not pass-through detention and demurrage charges should review their invoicing practices to ensure detention and demurrage is not billed when ports and terminals are closed.

The U.S. Federal Maritime Commission (FMC) announced an update to over 25 user fees effective June 5, 2023. Two key fees most impacted by the update are the FMC License and FMC License Amendment fees. The FMC License fee was increased by 422 percent from $250 to $1304 while the FMC License Amendment fee was increased 654 percent from $125 to $943. FMC reported that these fee increases reflect the true cost of license processing since the implementation of their electronic application system. These two fees have not increased since 2007. The FMC License is formally referred to as an Ocean Transportation Intermediary (OTI) License. The OTI License is required for non-vessel-operating common carriers (NVOCCs) and ocean freight forwarders (OFFs) operating in the USA.

There continues to be no FMC registration fee for NVOCCs outside the USA. NVOCCs outside the USA have the option to register with the Commission and provide NVOCC service from their offices outside the USA or via their agents in the USA. The NVOCC registration option requires a USD 150,000 surety bond and FMC Tariff only. Over 4,000 NVOCCs outside the USA are registered with FMC in this manner and do not hold FMC Licenses.

Many of the fees affected by the announcement are for legal filings and adjudications. While a few fees were reduced, most fees were increased. A summary is included below.

For a full list of fees affected by the announcement, please see the Federal Register announcement issued March 21, 2023.

The updated user fees are scheduled to go into effect June 5, 2023 unless the FMC receives significant adverse comments. A formal comment period was not initiated but the FMC indicated it will accept comments prior to April 20. Comments may be submitted via the Federal eRulemaking Portal at www.regulations.gov, under Docket No. FMC-2023-0009.

The U.S. Federal Maritime Commission (FMC) announced an update to its Rules of Practice and Procedure to allow the Commission to award refunds to shippers in lieu of or in addition to issuing civil penalties. These changes bring the Commission’s regulations into alignment with the Ocean Shipping Reform Act of 2022 (OSRA 2022).

OSRA 2022 amended two Shipping Act provisions: 46 U.S.C. 41107 for monetary penalties or refunds and 46 U.S.C. 41109 for assessment of penalties. Before OSRA 2022, section 41107 stated that any person that violates the Shipping Act or a regulation or order of the Commission issued under the Shipping Act is liable for a civil penalty. OSRA 2022 changed the language in this section governing potential liability of a violator by adding the phrase “or, in addition to or in lieu of a civil penalty, is liable for the refund of a charge” immediately after the term civil penalty. Accordingly, the Commission may now order that a person is liable for “a civil penalty or, in addition to or in lieu of a civil penalty, is liable for the refund of a charge” for any violation of the Shipping Act, Commission regulations, or Commission order. If the Commission orders a refund of money in addition to a civil penalty, the amount of civil penalty will be decreased by any additional amounts included in the refund of money in excess of the “actual injury” as defined in the Shipping Act.

The new regulations go into effect April 19, 2023. For the complete regulation announcement, visit the Federal Register.

The U.S. Federal Maritime Commission (FMC) issued a Notice of Dismissal to close out a shipper complaint against Mediterranean Shipping Company (USA) Inc. (MSC) in March 2023. No new formal complaints were filed with the Commission in March 2023.

Notice of Dismissal – FMC Docket No. 22-29:  In November 2022, MVM Logistics (MVM), a California-based corporation, filed a formal complaint against MSC, alleging that MSC violated the U.S. Shipping Act by failing to establish, observe, and enforce just and reasonable practices related to the receiving, handling, storing, and delivering of cargo.

Specifically, MVM alleged that MSC failed to provide adequate time for returning containers, failed to provide equipment for container movement, and frequently changed container return dates and vessel schedules resulting in delays and fees. MVM further alleged that MSC restricted its access to terminals when MVM disputed per diem charges. MVM claimed that MSC’s actions resulted in a loss of 95 percent of its shipping business and excess charges of at least $380,000.

MVM requested that the Commission order MSC to pay MVM damages for its unlawful conduct including attorneys’ fees and costs and any other amounts that the Commission deemed appropriate.

In March 2023, MVM and MSC submitted a Stipulation of Dismissal and agreed to continue to engage in discussions for amicable resolution of the matter outside of the FMC adjudication process. Following the filing, the Commission dismissed the suit without prejudice.

For more details visit FMC’s online reading room. The FMC’s reading room provides access to FMC dockets, related documents, notices, and orders.

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective April 15, 2023, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), and ZIM. See table below for GRI amounts per 40ft container. GRI amounts for all other container sizes are as per formula. The April 15th GRIs will be the eight GRI of 2023 for the East Asia/USA trade lane.

NOTE 1:  CMA CGM GRIs will be USD 600 per 40ft container for cargo to U.S. West Coast Port of Discharge, U.S. East Coast, or U.S. Gulf Coast Port of Discharge, and USD 800 per 40ft container for cargo to all inland points via U.S. Port of Discharge. GRI amounts for all other container sizes are as per formula.

NOTE 2:  COSCO GRIs apply on all cargo moving under service contracts only.

Some carriers also updated their tariffs to include new General Rate Increases (GRIs) effective May 1, 2023, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, HMM Company Limited, Ocean Network Express (ONE), and ZIM. See table below for GRI amounts per 40ft container. GRI amounts for all other container sizes are as per formula. The May 1st GRIs will be the ninth GRI of 2023 for the East Asia/USA trade lane.

NOTE 1: CMA CGM GRIs will be USD 1000 per 40ft container for dry cargo, and USD 1125 per 40ft container for reefer cargo. GRI amounts for all other container sizes are as per formula.

NOTE 2:  COSCO GRIs apply on all cargo moving under service contracts only.

Each carrier maintains its own tariffs and controls its own pricing.

The information contained herein is obtained from reliable sources. It is subject to change at any time, however, depending on changes in laws and regulations. While we continually attempt to monitor this information, we do not guarantee its accuracy and are not responsible for any damages suffered by any party in reliance on it.