The definition of co-loading may soon apply only to less-than-container-load (LCL) shipments.

This is one of the significant changes being proposed in the Notice of Proposed Rulemaking (NPRM) issued by the U.S. Federal Maritime Commission (FMC) on April 29, 2022.

The NPRM further states that non-vessel operating common carriers (NVOCCs) must continue to include the names of all NVOCCs involved in co-loading transactions on each Bill of Lading.

As for the full-container-load (FCL) shipments, NVOCCs may continue to handle them for other NVOCCs, but must do so under their tariff rates, Negotiated Rate Arrangements (NRAs), or NVOCC Service Arrangements (NSAs).

Another change proposed by the FMC is to remove the option for ocean common carriers to charge a fee to access their FMC tariff.

NVOCCs would also be allowed to reference certain ocean carrier charges in their FMC tariffs for pass-through purposes, such as bunker charges or detention and demurrage charges but not General Rate Increases (GRIs).

Under the proposed rule update, the regulations would also clarify that NVOCCs may pass-through certain charges that are announced on less than 30 days’ notice, such as terminal or canal charges, so long as these charges are referenced in their FMC tariff rules.

This NPRM is intended to clarify existing regulations and address changes in the industry. It is the first major update to FMC’s ocean carrier tariff regulations since May 1999.

German international shipping and container transportation company Hapag-Lloyd, A.G., has been ordered to pay $822,220 in penalties for violations of the U.S. Federal Maritime Commission’s detention and demurrage regulations.

The order came from Erin M. Wirth, Chief Administrative Law Judge at the FMC, after finding that Hapag had charged container detention fees even when appointments to return containers were unavailable.

The Initial Decision was served on April 22, 2022.

In its defense, Hapag said that they waive fees on days when no appointments were provided but if appointments are available, they would charge detention. If they don't, Hapag said truckers would simply wait until there were no more appointments available for a day to claim a waiver of detention charges.

Golden State Logistics, a drayage company, presented evidence that they could not obtain any of the appointments offered. Golden State Logistics showed the ALJ the screenshots they took when they were unable to obtain container return appointments and that they contacted Hapag to alert them of appointment unavailability.

The ALJ sided with Golden State Logistics finding that the trucker acted in good faith to return the containers.

The FMC’s Bureau of Enforcement (BOE), which filed the action before the ALJ, initially asked for a penalty $16.5 million against Hapag-Lloyd. This represents a penalty for each day the unlawful detention charges were outstanding after Hapag was presented with evidence that appointments were unavailable until the date BOE filed its action before the ALJ.

The ALJ found this excessive with no case law to support such a calculation. Instead, the ALJ found that 14 days of detention were charged when insufficient appointments were available and issued a fine for each day detention was charged.

Higher penalty amounts were applied because the ALJ found that Hapag knew about the FMC’s detention and demurrage rule but did not take steps to comply with the rule or train staff on handling disputes under the new rule.

Hapag can still appeal the ALJ’s initial decision.

Hapag is facing two similar cases where Florida-based banana importer, One Banana North America Corp., and a California-based trucking provider, Orange Ave Express, Inc., alleged that Hapag engaged in unreasonable container return.

One of the three complaints received by the U.S. Federal Maritime Commission (FMC) received in April 2022 is from Aeneas Exporting LLC, a U.S.-based car exporter, that complained that it was charged ocean freight rates different from what was originally quoted and not filed with the FMC. In a complaint filed on April 8, 2022, Aeneas accused Honeybee International Inc. and its affiliate All America Shipping of violating the U.S. Shipping Act by raising ocean freight rates after receipt of cargo, charging fees that were not quoted. This is fraud, Aeneas insists. Aeneas also alleged it was coerced to pay storage fees because Honeybee and All America could not release its cargo otherwise. Aeneas told the FMC it was forced to pay over $10,000 in additional shipping and storage costs. In its Answer, Honeybee and All America asked the FMC to dismiss the complaint, denying most of the allegations. Honeybee said Aeneas' alleged injury was the result of its own actions. An Initial Decision due April 10, 2023, and the Final Decision on the complaint due October 24, 2023.

Gateway, Et Al., Anti-Competitive MTO Agreement

The International Longshoremen’s Association (ILA), filed a formal complaint against Gateway Terminals, LLC,, Charleston Stevedoring Company, LLC, Ports America Florida, Inc., Ceres Marine Terminals, Inc., and SSA Atlantic, LLC, on April 1, 2022. ILA alleged that Gateway, et al., violated the U.S. Shipping Act by entering into an agreement at the ports of Savannah, Georgia and Charleston, South Carolina that resulted in anti-competitive and trade restrictive practices through a de-facto merger of marine terminal operators. As a result, the ILA alleges the agreement is unlawful and should be rejected by the FMC. An Initial Decision due April 12, 2023, while the Final Decision on the complaint is due October 26, 2023.

ZIM's Service Contract Violations

International Express Trucking, Inc. (IET), a U.S.-based trucking company, filed a formal complaint against ZIM Integrated Shipping Services Ltd., on April 13, 2022. IET alleged that ZIM violated the U.S. Shipping Act by assessing demurrage and/or detention charges even when containers could not be returned due to lack of space, congestion, and weather conditions. As a result, IET alleges it was charged $134,655 in unlawful detention costs. An Initial Decision due April 13, 2023, while the Final Decision on the complaint is due October 27, 2023.