MSC potentially liable for violating US Shipping Act post Federal Maritime Commission (FMC) inquiry into $2m+ in excess demurrage and detention fees. The loadstar source.
FMC Investigation Uncovers Irregularities in MSC’s D&D Charges and Refunds
The investigation follows an FMC audit of MSC’s D&D charges in 2021, with claims the carrier was issuing the same daily rate for both operating and non-operating reefers (NORs), despite it claiming, via its US agent, this was not the case.
The commission filing notes Upon information and belief, on at least 925 occasions, MSC’s customers disputed the operating reefer detention or demurrage, resulting in refunds totalling $1.2m.
In 2021, 1,704 NOR overcharges went undisputed, resulting in MSC retaining approximately $857,944 in additional revenue, and MSC took no action to correct the operating reefer versus NOR detention or demurrage or per diem overcharges.
Misapplication of Operating Reefer Rates by Carrier MSC
According to the FMC, the misapplication of operating reefer rates to NOR shipments was alleged to have become a normal and customary practice by the carrier.
Indeed, the filing added, in contravention of the Shipping Act, the carrier failed to supply separate D&D charges for NORs for public inspection until March this year, with information gleaned from bills of lading supplied by MSC customers.
Under Scrutiny for Unfair Practices Amid Industry Turbulence
MSC is the latest carrier to find itself under investigation by the FMC, as the commission steps up efforts to tackle “unfair practices”, believing carriers exploited shippers desperately seeking capacity during the pandemic.
Last month, fruit juice importer Rahal International lodged a complaint against Hapag-Lloyd, claiming some $300,000 of D&D charges were unfair, seeking a $715,631 repayment.
However, these amounts are dwarfed by the FMC order that Hamburg Süd must pay $9.8m to furniture shipper OJ Commerce after refusing it contracted cargo space, and Bed, Bath & Beyond is going after OOCL in a mega $38m claim.
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Source: The load star
