Hamburg-based liner Hapag-Lloyd has been fined $58 730 each for 14 different violations of the US Shipping Act, altogether $822 220 in penalties, for what has been described as deliberate manipulation of billing related to detention and demurrage (D&D).
This is after America’s Federal Maritime Commission (FMC) found that the carrier had erroneously applied D&D charges to 11 containers of Golden State Logistics (GSL).
The penalties come in the wake of Hapag-Lloyd previously charging that the FMC’s Bureau of Enforcement (BOE), who conducted the investigation, had no jurisdiction over its affairs.
The development is the first major backlash by the US against alleged overcharging by carriers, and follows news earlier this year that the Biden Administration was looking into so-called anticompetitive behaviour.
During President Joe Biden’s State of the Union address in March, it was also announced that the Department of Justice was to throw its weight behind the FMC, giving jurisprudential muscle to a body that was previously seen as all bark and no bite.
In its investigations, the BOE is said to have found that Hapag-Lloyd had levied punitive damages against GSL, amounting to $10 135, despite knowing full well that the Californian drayage company could not return its containers.
The BOE furthermore found that GSL had done everything in its power to return the containers in question, and that Hapag-Lloyd, despite being familiar with a relevant “interpretive rule” pertaining to D&D charges, had still proceeded with punitive charges against GSL.
It is also understood that Hapag-Lloyd furthermore had knowledge of the interpretive rule, published in a Federal Register in May 2020, and according to which GSL would have been absolved of responsibility.
The BOE said that efforts made by GSL to secure the assistance of Hapag-Lloyd in having its containers returned, had also been unsuccessful.
