The U.S. Federal Maritime Commission issued an Order to Show Cause to Mediterranean Shipping Company, S.A. (MSC) on February 3, 2023 demanding MSC provide justification for its congestion surcharge.

The Order, issued in FMC Docket No. CC-001, was issued in response to a shipper complaint filed under the FMC’s new charge complaint process established by the Ocean Shipping Reform Act of 2022 (OSRA-22). According to the Order, SOFi Paper Products, a U.S.-based paper importer, complained that a $1000 congestion surcharge was applied to a shipment unloaded at Seattle, Washington in July 2022. MSC responded that the congestion surcharge was duly charged in accordance with its FMC tariff rules. MSC did not provide justification for the surcharge on the basis of congestion at U.S. ports of discharge.

Under OSRA-2022, ocean carriers bear the burden of establishing that challenged charges are reasonable. If an ocean carrier fails to show the reasonableness of the charge, the Commission may find the charge to be in violation of the U.S. Shipping Act and order a refund of the charge and issue penalties, where appropriate.

MSC filed a Petition to Dismiss the Order and Charge Complaint on February 24, 2023, stating that it had reached an agreement with the shipper to refund the surcharge. MSC alleges that after reaching a settlement the shipper demanded an additional $500 in compensation. Before MSC could respond to the request, the Commission issued the Order. MSC has yet to respond to FMC’s request for a justification of the congestion surcharge.

The Order was issued a day after FMC Chairmen Daniel Maffei participated in U.S. President Biden’s Competition Council’s fourth meeting to discuss “junk fees,” which President Biden has condemned as weakening market competition and hiding the true cost of goods and services. At the meeting President Biden commended Council members for taking up his call to action to address exorbitant junk fees in a variety of industries.

For more information about the FMC’s charge complaint procedure and how shippers can file charge complaints, view the FMC’s Guidance on Charge Complaints at www.fmc.gov.

The U.S. Federal Maritime Commission (FMC) closed out one complaint in February 2023 by issuing an Order Affirming the Initial Decision on Different Grounds.

Order Affirming the Initial Decision on Different Grounds – FMC Docket No. 15-11:  In November 2015, three Russian-based vehicle shippers, Igor Ovchinnikov, Irina Rzaeva, and Denis Nekipelov filed a complaint against Michael Hitrinov a/k/a Michael Khitrinov, Carcont, Ltd., and Empire United Lines Co., Inc., a New York-based non-vessel-operating common carrier (collectively, Respondents), alleging that the Respondents violated numerous provisions of the U.S. Shipping Act and FMC regulations. As a result of these violations, the shippers alleged they suffered damages ranging from $19,920.0 to $32,101 for payments related to vehicles that were never delivered.

In March 2017, the FMC’s Administrative Law Judge granted the Respondents’ Motion for Judgment on the Pleadings and dismissed the claims with prejudice on the basis that the Commission lacked subject matter jurisdiction and the shippers lacked standing to bring their claims.

After review and supplemental briefings, the Commission affirmed the claim’s dismissal, but on different grounds. The Commission found that it did have jurisdiction over the case and that the shippers did have standing to file a complaint. According to the Commission a complainant need only allege a violation of the Shipping Act to file a Complaint before the Commission. Complainants need not allege or establish that they were a consignee to a shipment or have suffered an injury. Despite these findings, the Commission still dismissed the claim on the grounds that the shippers failed to state a claim upon which relief could be granted. The Commission reasoned that because the shippers did not purchase the vehicles from the Respondents there was no causal link between the alleged conduct and the monetary relief sought.

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 carriers serving the East Asia/USA trade lanes (U.S. Imports) have adjusted fuel surcharges effective April 1 through June 30, 2023. Details are as follows.

Here is a table of BAF amounts posted by carriers:

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF03), Tariff Rule No. 010.08. Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Charge (BUC), Tariff Rule No. 010-003.

NOTE 3:  HMM calls the above surcharge the Bunker Charge, Tariff Rule No. 2-63. HMM also filed in its FMC Tariff Rule No. 2-95, Environmental Compliance Charge (ECC), effective April 1, 2023. The ECC amounts are USD 260/289/325/366 per 20/40/40HC/45ft, respectively, for destination USWC/USWC Local/IPI/MLB; and USD 432/480/540/608 per 20/40/40HC/45ft, respectively, for destination USEC (all water)/USGC/RIPI.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within Tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the above surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate.

NOTE 6:  ZIM calls the above surcharge the New Bunker Factor – Far East (NBF), Rule No. 010-NB. Service contract cargoes subject to Carrier’s published BAF and/or EBS shall not be subject to NBF.

NOTE 7:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 8:  Updated on a monthly basis.

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

Several leading carriers serving the Transpacific container trades have recently updated their respective tariffs to include new General Rate Increases (GRIs) effective March 15, 2023, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, 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 15th GRIs will be the sixth GRI of 2023 for the East Asia/USA trade lane.

NOTE 1:  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 April 1, 2023, including CMA CGM, COSCO, Evergreen, Hapag Lloyd, 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 April 1st GRIs will be the seventh 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 Ports of Discharge, U.S. East Coast or U.S. Gulf Ports of Discharge, and USD 800 per 40ft container for cargo to inland points via U.S. Ports 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.

Several carriers serving the USA/East Asia trade lanes (U.S. Exports) have adjusted their fuel surcharges for the April to June 2023 quarter. Here is a table of carriers that have posted BAF amounts:

NOTE 1:  CMA CGM calls the above surcharge the Bunker Adjustment Factor Surcharge (BAF-03), Tariff Rule No. 010.4.  Low Sulphur Surcharge IMO2020 (LSS20) is not applicable at this time.

NOTE 2:  COSCO calls the above surcharge the Bunker Surcharge (BUC), Tariff Rule No. 010-001.

NOTE 3:  HMM calls the above charge the Bunker Surcharge (BUC) Rule No. 10-02A. HMM also filed in its FMC tariff Rule 10-02F, Environmental Compliance Charge (ECC), effective April 1, 2023. The ECC amounts are USD 43/85/85/85 per 20/40/40HC/45ft, respectively, for dry cargo moving via West Coast; and USD 33/65/65/65 per 20/40/40HC/45ft, respectively, for dry cargo moving via East Coast, Gulf.

NOTE 4:  ONE calls the above surcharge the ONE Bunker Surcharge (OBS). Any reference to Bunker Adjustment Factor (BAF) or Fuel Adjustment Factor (FAF) within a duly filed service contract shall be construed as referencing the same surcharge as ONE Bunker Surcharge (OBS) as detailed within Tariff Rule No. 102.001, whether as an exception or as a reference to this charge.

NOTE 5:  OOCL calls the surcharge the Fuel Cost Recovery Charge (T-62). The Fuel Cost Recovery Charge will not apply to shipments when Bunker Surcharge and/or Low Sulphur Fuel Surcharge and/or Low Sulphur Adjustment Charge are already applied or included in the base rate.

NOTE 6:  Yang Ming calls the above surcharge the New Bunker Charge, Tariff Rule No. 10-AH.

NOTE 7:  ZIM calls the above Bunker Charge the New Bunker Factor – Far East (NBF), Rule 010-NB. These Bunker amounts are effective February 1, 2023 until further notice.

NOTE 8:  Subject to Low Sulphur Fuel Charge (LSF or LSS).

NOTE 9:  Updated on a monthly basis.

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.