FMC finds some of Hapag-Lloyd’s detention charges are ‘unreasonable’

In November 2021, the US Federal Maritime Commission (FMC) issued an order of investigation and hearing (OIH) to determine whether Hapag-Lloyd was in violation of the Shipping Act by its practice of assessing detention charges when it failed to provide an equipment return location, appointments were unavailable for equipment return during the allocated free time, or shipper-disputed charges related to these issues were not waived.

The case involves drayage company Golden State Logistics (GSL), which provided transportation for 11 empty containers that were returned from one to 11 days after free time expired.

On December 6, Hapag-Lloyd filed an answer, denying the allegations in the complaint. It asserted that any inability to return empty containers within free time was due to the acts and/or omissions of the motor carrier and/or the cargo interest, and Hapag-Lloyd’s conduct was reasonable in light of the totality of the circumstances.

In her decision, the FMC’s Chief Administrative Law Judge Erin Wirth found that, “on some of the days for which detention was charged, there were not sufficient appointments to return the containers, and Hapag-Lloyd’s policy and practices regarding detention charges were unreasonable.” Her so-called initial decision, which will become the decision of the FMC in the absence of a review by the Commission, is that Hapag-Lloyd violated section 41102(c) of the Shipping Act by imposing and refusing to waive detention charges where there were insufficient appointments to return those empty containers.

Along with a cease-and-desist order, Hapag-Lloyd was ordered to pay $822,220 as a civil penalty for 14 “willful and knowing violations of section 41102(c) of the Shipping Act.”

Kim Biggar

Kim Biggar started writing in the supply chain sector in 2000, when she joined the Canadian Association of Supply Chain & Logistics Management. In 2004/2005, she was project manager for the Government of Canada-funded Canadian Logistics Skills Committee, which led to her 13-year role as communications manager of the Canadian Supply Chain Sector Council. A longtime freelance writer, Kim has contributed to publications including The Forwarder, 3PL Americas, The Shipper Advocate and Supply Chain Canada.
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