ONE and Wan Hai Lines Pay $2.65 Million in Penalties

Ocean carriers Ocean Network Express Ptd. Ltd. (ONE) and Wan Hai Lines, Ltd. recently settled allegations of misconduct brought by the Federal Maritime Commission's Bureau of Enforcement, Investigations, and Compliance, resulting in a combined total of $2.65 million in civil penalties.

ONE, in an agreement reached with the FMC in April, resolved allegations of violating 46 U.S.C. § 41102(c) by imposing detention charges when appointments were unavailable during allocated free time for equipment return. As part of the agreement, ONE agreed to pay a $1.7 million civil penalty. Notably, the agreement also introduced a significant new provision requiring ONE to provide restitution to affected shippers in the form of refunds and waivers. ONE also expressed its commitment to comply with the Ocean Shipping Reform Act of 2022 and the Interpretative Rule on Detention and Demurrage.

Similarly, the Commission settled with Wan Hai Lines, Ltd. and Wan Hai Lines (USA) Ltd. to close an Order of Investigation and Hearing issued in December 2021. Wan Hai agreed to pay $950,000 in civil penalties for allegations of violating 46 U.S.C. § 41102(c) by failing to observe and enforce just and reasonable practices regarding charges related to empty container returns. Additionally, Wan Hai refunded all detention charges collected under the invoices in question and implemented corrective actions to prevent future violations and ensure compliance with the Commission's Interpretive Rule on Detention and Demurrage.

Federal Maritime Commission Chairman Daniel B. Maffei commended the Bureau of Enforcement, Investigations, and Compliance for their efforts, emphasizing that the agreements send a clear message to the international shipping community that ocean carriers must fully comply with U.S. legal obligations. The penalties imposed on ONE and Wan Hai serve as both a deterrent and relief for affected shippers.

It is worth noting that in June 2022, Hapag Lloyd AG paid $2 million in civil penalties to address allegations of violating 46 U.S.C. § 41102(c) in their assessment of detention charges.

It is important to differentiate between a compromise agreement, as seen with ONE, which is reached before the Commission initiates formal enforcement action, and a settlement agreement, as seen with Wan Hai, which concludes an ongoing enforcement proceeding. Neither ONE nor Wan Hai admitted to any violation of the law.

The civil penalties paid by the ocean carriers go directly to the General Fund of the U.S. Treasury, with no revenue being received by the Federal Maritime Commission in the process of assessing these penalties.

FMC Hikes Penalty for Shipping Violations to $14,149

Inflation has pulled the maximum penalty for not knowing and willful violation of the Shipping Act of 1984, Commission regulation or order (46 U.S.C. 41107(a)) to $14,149 per occurrence, as of January 15, 2023.

If a person knowingly and willfully violates Shipping Act of 1984, or Commission regulation or order, then they could face a maximum civil penalty of up to $70,752 per occurrence.

The FMC is responsible for enforcing the Shipping Act and has the authority to investigate alleged violations and assess penalties for noncompliance. The FMC may take various enforcement actions, including the issuance of warning letters, formal orders, and civil penalties, to ensure compliance with the Shipping Act's requirements.

Violations of the Shipping Act can take many forms, including unfair practices, discriminatory treatment, and failure to adhere to regulatory reporting requirements. The FMC may investigate alleged violations and may bring an action against the alleged violator if it determines that a violation has occurred.

Experts at Atlantic Pacific Tariffs Inc. are always available for consultation regarding compliance issues, providing clients with up to 2 hours per month of free consultation services.

Prospective clients may also avail of a FREE 30-minute Zoom-based consultation (English and Spanish available). Email us today at info@aptariffs.com.

FMC Releases New Video on How to File Complaints

The Federal Maritime Commission (FMC) has released a new video aimed at educating shippers and carriers about the charge complaint process.

The 20-minute video explains the steps involved in filing a complaint, required documentation, deadlines, and the role of the FMC in resolving disputes. The video also includes examples of situations in which the charge complaint process can be used, as well as tips for preparing and submitting a complaint.

The charge complaint process is a tool available to shippers and carriers to resolve disputes related to charges assessed by carriers. The FMC hopes that these resources will help shippers and carriers better understand the charge complaint process and how it can be used to resolve disputes related to shipping charges.

The FMC has been holding public forums to discuss issues related to the charge complaint process and other issues related to the maritime industry. The FMC encourages shippers and carriers to watch the new video and to contact the FMC if they have any questions about the charge complaint process or other issues related to the maritime industry.