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$50K FMC Penalty for NVOCC Tariff Violations

Miami, FL, USA -- A non-vessel operating common carrier (NVOCC) was ordered to pay $50,000 in compromise penalty to the Federal Maritime Commission (FMC) for Tariff Violations.

 

WHY IT MATTERS

 

New Jersey-based NVOCC Olympiad Line LLC allegedly violated the Shipping Act by providing service that was not in accordance with the rates, charges, classifications, rules, and practices contained in its published tariff.

 

Olympiad paid the FMC $50,000 in compromise of these allegations but did not admit to violations of the Shipping Act or Commission regulations.

 

A vessel operating common carrier (VOCC) based in South Korea, Hyundai Glovis, Co. Ltd., also paid a whopping $1,300,000 in compromise of similar allegations. The FMC staff claims that for over a year, Hyundai Glovis provided services as a common carrier without publishing the appropriate tariffs showing all its active rates and charges.

 

AVOID PENALTIES!

 

Led by FMC legal practitioners, AP Tariffs' core mission is to help clients maintain FMC-compliant tariffs and avoid costly penalty payments.

  • Did you know?  Even if you didn't know you were violating the Shipping Act, you can still be fined a maximum of $14,988 per occurrence!

     

Not knowing is not an excuse. It is crucial to stay in compliance with the FMC regulations. And that's where AP Tariffs comes in.

 

We offer FMC compliance training to all our clients, up to 2 hours per month free! A phone call or an online meeting, AP Tariffs' FMC experts are always available to give advice how to file rates correctly and keep tariffs updated. Think of us as your very own FMC Compliance Department.

 

 

Understanding an NVOCC's Role in Ocean Freight Rate Filings

If you’re a Non-Vessel Operating Common Carrier (NVOCC) involved in shipping cargo to or from the United States, you’re likely navigating the complex world of FMC regulations. Here’s what you, as an NVOCC, need to know to stay compliant—and avoid costly penalties!

 

What NVOCCs Must Do:

  • Always file your selling rate, even if it’s the same as your buying rate.

  • Selling to public or non-FMC agents? Publish the TLI rate in your tariff.

  • Selling to cargo owners or FMC-licensed NVOCCs? Register the rate as an NRA.

 

Why It Matters:

 

Skipping this step could cost you $14,988 per shipment. That’s not a typo.

 

Who Can Resell?

 

Only FMC Authorized NVOCCs can legally buy and resell Ocean Freight Rates from and to USA Territories. Once the NVOCC Rate is filed or registered, and the House Bill of Lading (HBL) is issued, it can pass through multiple layers of HBL, but your responsibility is to ensure the shipment under your control is compliant.

 

As shipper or Consignee in the Master BL, you may end up being liable for the Shipment incidentals such as Detention and Demurrage caused by the real shipper or the real consignee of the shipment.

 

Be aware of the shipment value before accepting handling the shipments. Low value shipments tend to be abandoned by the owners when billed for large Detention and Demurrage Changes. In those cases, you may end up paying the Daily cumulative charges and fines of the low value abandoned shipments.

 

What Freight Forwarders Can’t Do:

 

FMC-Authorized Ocean Freight Forwarders (OFF) are Logistics and Export Documentation Agents that handle Ocean Export Shipments. They are NOT allowed to mark up the rate applied by the VOCC or NVOCC. They invoice for the services provided as listed in their Services Rate List.

 

The BL Chain Explained:

 

  • Vessel Operator (VOCC) publishes or registers its selling rate and issues the MBL, showing the buying FMC NVOCC as Shipper or Consignee.

  • Each FMC NVOCC publishes or registers its selling rate and issues its HBL, showing the customer as shipper or consignee.

  • The final HBL shows the real shipper and consignee.

 

Each party in this chain must file or register their selling rate.

 

The FMC cannot enforce or regulate if in the chain of intermediaries involved in the shipment are non-FMC NVOCCs, but it does enforce rules on FMC-Licensed NVOCCs.

 

Bottom line: If you’re a licensed NVOCC, publish your TLI or register your NRA. It provides you with a shield against penalties.

 

AP Tariffs streamlines FMC compliance with advanced tariff publishing technology, cutting filing costs by 90% while ensuring regulatory adherence. We also provide our clients with free compliance management service includes up to 2 hours of consultation per month.

 

Take advantage of our free 30-minute consultation, CLICK HERE NOW! 


Appeals Court Overturns FMC's D&D Billing Rule

Miami, FL, USA -- The FMC rule about who should pay detention and demurrage was set aside by the U.S. Court of Appeals for the District of Columbia on September 23, 2025. Specifically, the appellate court said Section 541.4, which defined who may receive a D&D invoice was internally contradictory and thus arbitrary and capricious and invalid under the Administrative Procedure Act (APA).

 

"Regardless of any uncertainties about whether the Rule permits billing a non-contracting consignee, the Rule’s bar against billing a contracting motor carrier itself suffices to require setting the Rule aside as arbitrary and capricious," Chief Judge Sri Srinivasan opined. Read the Court Decision HERE.

 

The FMC was quick to point out that ruling only applied to one part of the agency’s entire rulemaking which aimed to better police how detention and demurrage are charged, Michael Angell of Journal of Commerce reported.

 

The FMC, in a statement to Journal of Commerce, asserted that 30-day deadlines for issuing and contesting the late fees and detailed information on invoices about how detention and demurrage are calculated remain enforceable.

 

Lawyers at Jones Walker LLP said "importers, exporters, NVOCCs, and motor carriers should continue to scrutinize D&D invoices and assert their rights to dispute charges and seek refunds or waivers."

 

"Given the high-profile nature of previous D&D rulemaking, any renewed efforts by the FMC in this area will be equally closely watched. In particular, the fundamental question of the physical and notional limits of the FMC’s jurisdiction may be front and center," Julia Bonestroo Banegas, Esq., and Christopher M. Hannan, Esq., at Jones Walker LLP said.

 

Julie Maurer, Esq., and Benjamin Nashed, Esq., of Husch Blackwell LLP said the appellate court's decision "underscores the need for clear contractual protection and billing protocols to ensure agreements clearly define who must pay detention and demurrage charges."

 

"Trucking companies should review their haulage agreements and make sure they understand the terms governing detention and demurrage," Husch Blackwell LLP lawyers added.

 

The World Shipping Council (WSC), a trade association whose members operate approximately 90 percent of the world’s liner vessel services, which filed the petition for the Court of Appeals to review the FMC's order, is willing to collaborate with the FMC on a revised rule that promotes timely container pickup and return, helping to reduce port congestion.

 

“Consumers, shippers, truckers, port operators, and ocean carriers all benefit from a D&D rule that ensures containers keep moving,” the WSC said in a statement to the Journal of Commerce.

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