US FMC loses Evergreen D&D case but reaffirms cargo refusal rules
A small but significant win for liner shipping companies came in the US Court of Appeals which overturned the Federal Maritime Commission (FMC)’s decision that Evergreen should have waived detention & demurrage (D&D) charges.
The claim was for $510 by trucking company TCW for a period in which the port was closed, however, the court said the FMC ruling was “illogical” adding that the commission had a “myopic focus” on the incentive principle.
It remains to be seen where this court ruling will alter the FMC’s D&D charging regulations.
Meanwhile, the FMC has decided to retain parts of its refusal to carry cargo regulations, which will be enforced from 23 September, that were contested by carrier representatives.
Alphaliner reports the FMC will: “Retain a provision that allows it to consider the quoted rate when assessing if a carrier made a good-faith effort to negotiate. Carriers argued that this exceeds the FMC’s brief as a non-rate-regulating body.”
In addition, the FMC will retain a requirement that “lines file an annual export policy that includes service and market descriptions, pricing strategies and container equipment,” according to the lines this could put them at a competitive disadvantage.
The policy was enacted as part of the Ocean Shipping Reform Act 2022, following complaints from shippers that carriers were not meeting their contractual obligations, by refusing space for contract cargo, with shippers arguing that the lines were forcing them onto the far more expensive spot market.
“The new rule establishes the conditions under which the FMC will investigate ‘unreasonable’ refusal of cargo space to US exporters, or ‘unreasonable’ refusal to deal or negotiate vessel space accommodations,” reported Alphaliner.
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