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Hapag-Lloyd pays $2m FMC detention and demurrage settlement

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Hapag-Lloyd has agreed a $2m settlement with the US Federal Maritime Commission (FMC) in relation to alleged detention and demurrage violations.

The FMC’s Bureau of Enforcement (BoE) agreed the civil penalty with the container line following an initial decision which determined Hapag-Lloyd was in breach of U.S.C. § 41102(c) – “A common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.”

Approving the proposed settlement agreement, the commissions said Hapag Lloyd had been “ordered to cease and desist from future violations, including imposing demurrage or detention when there are insufficient appointments available.”

Chairman Daniel Maffei said: “To restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary.  Specifically, we must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters.  The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules – and in particular, the interpretive rule on detention and demurrage charges.”

Container lines are in US regulator crosshairs as supply chain disruption has cut service levels and raised prices for ocean transport to and from the US. The FMC has requested enhanced details of pricing and capacity information from the big three container alliances as it looks more closely at their member lines and their part in rising costs for shippers.

The case against Hapag-Lloyd was opened on November 10, 2021, at the request of BoE following their investigation into complaints of high demurrage costs for shippers.

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