Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective February 15, 2022, including CMA CGM, COSCO, Evergreen, 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 February 15th GRIs will be the fourth GRI of 2022 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 15Jan2022 are postponed to effective 15Feb2022.

NOTE 2: Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

NOTE 3: HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

Several leading carriers have updated their tariffs to include new General Rate Increases (GRIs) effective March 1, 2022, including COSCO, Evergreen, HMM Company Limited, Ocean Network Express (ONE), Yang Ming, and ZIM. See table below for GRI amounts per 40ft container; GRI amounts for all other container sizes are as per formula. The March 1st GRIs will be the fifth GRI of 2022 for the East Asia/USA trade lane.

NOTE 1: COSCO GRIs apply on all cargo moving under service contracts only. The GRIs previously effective 01Feb2022 are postponed to effective 01Mar2022.

NOTE 2: Evergreen GRIs will be USD 1000 per 40ft dry container for dry cargo, and USD 2000 per reefer container. GRI amounts for all other container sizes are as per formula.

NOTE 3: HMM GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

NOTE 4: Yang Ming GRIs will be USD 1000 per 40ft container for cargo to destinations USWC, USEC, US Gulf coast, and USD 2000 per 40ft container for cargo to destinations IPI, MLB, RIPI. GRI amounts for all other container sizes are as per formula.

One Banana North America Corp. filed a formal complaint before the U.S. Federal Maritime Commission against Hapag-Lloyd AG and Hapag-Lloyd (America) LLC for unreasonable detention and demurrage practices on January 19, 2022.

One Banana is a Florida corporation that ships fresh bananas from Central and South America to the United States. One Banana alleges the Hapag violated the U.S. Shipping Act and related regulations by failing to establish, observe, and enforce just and reasonable practices relating to receiving, handling, storing, and delivering of One Banana’s cargo in violation of 46 U.S.C. § 41102(c) and 46 C.F.R. §§ 545.4 and 545.5, and by unreasonably refusing to deal or negotiate with One Banana in violation of 46 U.S.C. § 41104(a)(10).

One Banana alleges that its truckers were unable to return containers to Hapag in a timely manner due to Hapag’s failure to provide container return locations, provision of return locations that were unable to receive containers, and insistence on dual transactions. Hapag also failed to respond to requests to waive fees incurred due to lack of return locations and resolve issues. As a result, truckers began to refuse One Banana’s requests to pick up Hapag containers or require pre-payment of exorbitant charges in anticipation of costly detention fees.

One Banana seeks reparations of at least $773,000 for detention and demurrage fees, spoilt cargo, and attorney fees.

Hapag now faces three detention and demurrage-related matters before the FMC. Orange Ave Express, Inc., a California-based trucking company, filed a similar complaint against Hapag before the Commission in November 2021. One Banana has filed a Motion to Intervene in that matter. Additionally, the FMC initiated its own investigation into Hapag’s detention and demurrage practices in November 2021.

The Federal Maritime Commission increased the maximum penalties assessed for statutory violations effective January 15, 2022, as required by the Federal Civil Penalties Inflation Adjustment Act of 2015. The increases are tied to the rate of inflation. Maximum penalties for knowing and willful violations of the Shipping Act increased to $65,666 from $61,820. Maximum penalties for violations that are not knowing and willful increased to $13,132 from $12,363.

One of the largest maximum penalties that the FMC can assess increased to $2,071,819 per voyage. This penalty is authorized by the Shipping Act under 46 U.S.C. § 42106 as follows.

“If the Federal Maritime Commission finds that conditions unfavorable to shipping in foreign trade as described in section 42101 of this title exist, the Commission may —

1. limit voyages to and from United States ports or the amount or type of cargo carried;
2. suspend, in whole or in part, tariffs and service contracts for carriage to or from United States ports, including a common carrier’s right to use tariffs of conferences and service contracts of agreements in United States trades of which it is a member for any period the Commission specifies;
3. suspend, in whole or in part, an ocean common carrier’s right to operate under any agreement filed with the Commission, including any agreement authorizing preferential treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenue with other ocean common carriers;
4. impose a fee not to exceed $1,000,000 per voyage; or
5. take any other action the Commission finds necessary and appropriate to adjust or meet any condition unfavorable to shipping in the foreign trade of the United States.”

The penalty fee of $1,000,000 shown in (4) is the amount provided in the original Shipping Act of 1984. This amount has been increased due to inflation adjustments many times and now stands at $2,071,819.

The FMC also increased the amounts of eight other penalties specified in the Shipping Act. The complete list of increased penalties was published in FMC Docket No. 22-02 and in the Federal Register.

President Joe Biden renominated Max Vekich, a labor leader from the state of Washington, to be a Federal Maritime Commissioner on January 4, 2022. If confirmed by the U.S. Senate, Vekich’s term will expire June 30, 2026, and he will replace Commissioner Michael Khouri.

Vekich was originally nominated in June 2021, however his nomination did not proceed to confirmation in the U.S. Senate and was not allowed to remain in pending status during the Senate’s holiday recess.

Vekich is a native of Aberdeen, WA and has worked as a longshoreman and as a labor leader with the International Longshore and Warehouse Union (ILWU). He served four terms in the Washington House of Representatives as a Democrat representing House District No. 35 from 1983 to 1991. Vekich also served in leadership positions with ILWU Local 52 in Seattle from 2006 to 2019.

Prior to Senate confirmation Vekich cannot begin work at the Commission and Commissioner Khouri may remain in his post at the FMC.

On January 27th, 2022, the Federal Maritime Commission (FMC) met virtually in both open and closed sessions. In the open session, the FMC received updates on the Commission’s detention and demurrage carrier audits, the supply chain data initiative, and the work of FMC Area Representatives.

The Commission’s Managing Director, Lucille Marvin, leads both the Vessel-Operating Common Carrier (VOCC) Audit Program and VOCC Audit Team. She presented along with her team in detail about their outreach to VOCCs and insights gained from the audits. After an initial review of VOCC practices, the team identified best practices, which included conspicuously posting detention and demurrage rules on VOCCs’ websites, the inclusion of contact information for disputes, and automated notices for container availability. The Audit Team sent these best practices to the top 25 VOCCs and the World Shipping Council to encourage industry-wide adoption

The Audit Team also revealed that data collected from Q3 2021 showed that the top eight VOCCs billed and collected a combined total of $1.3 billion in detention charges and $920 million in demurrage charges. This was an increase of 53.7% and 49.7%, respectively, over the prior quarter. Data for Q4 was still pending as of the meeting.

“The vast increase in detention and demurrage charges being billed by the carriers is certainly concerning but must be seen in the context of the overall congestion situation at U.S. ports and inland networks. Carriers are also waiving a much higher percentage of detention and demurrage charges and that’s one indication that the 2020 interpretive rule and enhanced enforcement is changing some practices and reducing collections of unreasonable detention and demurrage charges. However, the audit findings also tell me that we have a long way to go and must not let up one bit either on our enforcement efforts or the additional rulemaking on detention and demurrage recommended by Commissioner Rebecca Dye,” stated FMC Chairman Daniel Maffei.

During the closed session, the Commission reviewed a draft Advance Notice of Proposed Rulemaking (ANPRM) which would seek comment on whether the Commission should require common carriers and marine terminal operators to include certain minimum information on, or with, demurrage and detention billings. Commissioner Dye recommended this ANPRM in her Fact Finding 29 Interim Report issued in July 2021.

Commissioner Carl Bentzel provided an update on the FMC’s Maritime Transportation Data Initiative. Commissioner Bentzel is leading this initiative for the FMC and has identified three key goals: 1) cataloging the status quo in maritime data, storage, and access across the transportation chain; 2) identifying key gaps in data definitions/classification; and 3) developing recommendations for common data standards and access policies/protocols. Commissioner Bentzel is working to produce a comprehensive and well-documented data dictionary along with recommended data structures and standards.

So far, Commissioner Bentzel has met with beneficial cargo owners, drayage truckers, chassis providers, and a group of providers of warehouse, distribution, and 3PL services. He will hold an additional 12 meetings to gather data from all sectors of the supply chain, including labor, NVOCCs, and ocean carriers. A Maritime Data Summit where the FMC will present their findings and obtain industry feedback is tentatively scheduled for June 2022.

The Commission also received a report from the Director of Field Operations, Robert Borden. Mr. Borden oversees the Commission’s Area Representatives (ARs). ARs are the FMC’s eyes and ears in the field and provide industry outreach and investigatory support. Currently there are eight ARs stationed throughout Houston, New York, Los Angeles, Seattle, and South Florida. Commissioner Bentzel and Commissioner Louis Sola both commented that an increase in ARs is needed to fulfill the Commission’s duties considering increased cargo flows.

In the closed session, Commissioners further reviewed the VOCC Audit Program, detention and demurrage issues, and Area Representatives’ activity. The Commission also reviewed the ongoing investigation into the conditions created by Canadian Ballast Water Regulations. A recording of the open session is posted at fmc.gov.