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US FMC launches investigation into ONE’s possible 2018 violations of the Shipping Act

The US Federal Maritime Commission has issued a public notice of its intention to investigate Ocean Network Express Pte. Ltd. and Ocean Network Express (North America) Inc. for possible violations of the Shipping Act and unfair business practices.

According to the notice, Florida-based Greatway Logistics Group, LLC, a non-vessel-owning common carrier (NVOCC), acted on behalf of Pacific Lumber Resources, Inc. (PLR) only to arrange customs clearance by a licensed customs broker or serve as the notify party. Greatway had no interest in the cargo as consignee, shipper or beneficial owner.

ONE issued two bills of lading (BOLs) for ocean transportation of PLR’s cargo from Brazil to Houston. A party to neither BOL, Greatway had not consented to their terms and conditions.

The cargo arrived at the Port of Houston in November 2018, but due to a commercial dispute (which did not involve Greatway), it was not picked up until January 2019, accruing charges owed to ONE.

In May 2020, ONE filed suit in the US District Court for the Southern District of Texas against Greatway, demanding payment for charges accrued on the shipments.

ONE’s BOL terms and conditions define “Merchant” as “the Shipper, Consignee, owner, Person owning or entitled to possession of the Goods or of this Bill, Receiver, Holder, and anyone acting on behalf of any such person, including but not limited to agents, servants, independent contractors, non-vessel operating common carriers (“NVOCCs”), and freight forwarders.” The carrier’s BOLs state that the “Merchant” is liable for all charges associated with the BOL.

ONE is alleged to have overbroadly defined and applied the definition of merchant in its BOL in such a manner as to unilaterally impose joint and several liability for freight and/or charges on a party with which it was not in contractual privity and which had not consented to be bound by the terms of the BOL.

The FMC notice alleges also that these actions constitute ONE’s normal, customary and continuous business practice.

The Commission has decided that an adjudicatory proceeding is required to determine whether ONE is in violation of the Shipping Act.

ONE has 25 days to file an answer to the Order of Investigation and Hearing.

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.

Comments

  1. This is a topic that’s near to my heart…
    Best wishes! Exactly where are your contact details though?

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