MSC FINED $22.67 MILLION BY FMC FOR MULTI-YEAR SHIPPING ACT VIOLATIONS
On 28 January, the U.S. Federal Maritime Commission (FMC) announced that it had imposed a civil penalty of $22.67 million on Mediterranean Shipping Company (MSC) for a series of violations of the U.S. Shipping Act committed over several years. The enforcement action follows a lengthy investigation by the FMC’s Bureau of Enforcement, Investigations and Compliance, which found that MSC engaged in improper billing practices and failed to meet tariff transparency requirements under U.S. law.
According to the FMC, the company’s first violation occurred between 2018 and 2020, when MSC billed customs brokers and other third parties listed as “notify parties” for demurrage and detention charges even though those parties were not involved in moving the cargo, breaching federal provisions on lawful billing. The Commission upheld an Administrative Law Judge’s finding that this use of a “merchant clause” in bills of lading was unlawful, resulting in assessed penalties of $65,000 for that conduct.
The largest portion of the fine, approximately $13.145 million, stemmed from the Commission’s finding that MSC overcharged customers for demurrage and detention fees on NORs during 2021. While the initial ruling by an Administrative Law Judge treated this as a technical error, the FMC concluded that overcharges appeared on roughly 23 % of all NOR invoices that year and therefore constituted an “unreasonable practice” under the Shipping Act, warranting $5,000 per violation in penalties.
A separate set of violations involved MSC’s published tariff practice between 2021 and 2023, during which the carrier failed to include clearly stated fees for non-operating refrigerated containers (NORs) as required by tariff publication rules. The FMC determined that these omissions became “knowing and willful” from March 2022, when MSC informed regulators it would correct its tariff but did not do so promptly, resulting in assessed penalties of $9.46 million.
The decision, which represents one of the more substantial civil penalty assessments in recent FMC enforcement history, shows heightened regulatory scrutiny of carrier billing and tariff practices in the aftermath of pandemic-era supply chain disruptions.
Source: FMC Press Release