HAPAG-LLOYD FINED OVER UNLAWFUL D&D CHARGES
The Loadstar reported on 25 April that German ocean carrier Hapag Lloyd has received a fine of $822,220 for 14 violations – $58,730 for each offence – of the US Shipping Act, after an FMC investigation found it incorrectly applied detention and demurrage (D&D) charges to 11 containers handled by California drayage firm Golden State Logistics (GSL).
The D&D charges levied to GSL amounted to $10,135, but the FMC’s Bureau of Enforcement (BOE), which Hapag-Lloyd had unsuccessfully claimed had no jurisdiction over the case, said the penalties were punitive in nature as the carrier had “knowingly and wilfully” applied the D&D charges despite GSL being unable to return the containers, as Hagag-Lloyd was well aware of the FMC’s interpretive rule but applied them nonetheless. The BOE also stated that Hapag-Lloyd’s violations are so severe that the German carrier should be fined $16.5m because, according to the bureau, the company knowingly broke the law, but no sufficient evidence could have been provided.
However, while the decision may be a milestone in the numerous claims being brought by hauliers disputing D&D charges in the US with container shipping lines, an attempt by another drayage operator, Orange Avenue Express, which is also claiming Hapag-Lloyd applied unfair D&D charges, to intervene on the case, was dismissed. This suggests that each further case will have to be decided on the individual circumstances.
Source: The Loadstar, ShippingWatch