FMC OKs $2M Hapag-Lloyd Settlement

FMC Press Release Dated June 8, 2022 - The Federal Maritime Commission approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Hapag-Lloyd AG (Hapag-Lloyd) where the ocean carrier will pay a $2 million civil penalty to address alleged violations related to their detention and demurrage practices.

“To restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary. Specifically, we must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters. The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules – and in particular, the interpretive rule on detention and demurrage charges,” Chairman Daniel Maffei said.

This settlement agreement follows an April 22, 2022, Initial Decision issued by the Commission’s Administrative Law Judge (ALJ) finding Hapag-Lloyd violated the law by knowingly and willfully failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivery property, by unreasonably refusing to waive detention charges, in violation of 46 USC 41102(c). The ALJ ordered an $822,220 civil penalty and for Hapag-Lloyd to cease and desist their violative actions. The case, Hapag-Lloyd, A.G. and Hapag-Lloyd (American) LLC—Possible Violations 46 USC 41102(c) (Docket No. 21-09), was initiated by the Commission on November 10, 2021, at the request of BoE and following their investigative work.

The $2 million civil penalty will be paid to the U.S. Department of the Treasury and will be deposited into the General Fund.

New Monitoring Requirements Give FMC More Insight

FMC Press Release dated May 5, 2022 -- The three global ocean carrier alliances (2M, OCEAN, and THE) and each of their member companies will now be required to provide enhanced pricing and capacity information, providing the Federal Maritime Commission with uniform data to use in assessing ocean carrier behavior and marketplace competitiveness.

The newly mandated information will provide the Commission’s Bureau of Trade Analysis (BTA) with insight into pricing of individual trade lanes and by container and service type. It will also provide more immediate information regarding capacity management decisions of ocean carriers and alliances.

The changes are the result of a year-long examination by BTA to determine the data needed to properly analyze carrier behavior and marketplace trends. Under the new requirements, carriers participating in an alliance will need to submit pricing information about cargo they move on the major trade lanes, and both carriers and alliances will be mandated to submit comprehensive information related to capacity management.

One of the key responsibilities of the Commission, through BTA, is to continuously monitor compliance with agreement authorities and to determine if agreements have an anticompetitive impact on the marketplace.

The three ocean carrier alliances are already subject to the most frequent and stringent monitoring requirements of any type of agreement on file at the Commission. Information already collected includes detailed operational data, minutes from meetings among agreement principals, and regularly scheduled meetings with agreement parties where Commission staff address issues of concern.

The Commission assesses its reporting requirements on a continuous basis and adjusts the information it requires ocean carriers and alliances to file as circumstances and business practices change. Additional changes to requirements will be issued as warranted.

FMC Sets MTDI Summit for June 1

FMC Press Release dated May 25, 2022 -- Commissioner Carl Bentzel will host the Maritime Transportation Data Initiative Summit at the Federal Maritime Commission headquarters on Wednesday, June 1, 2022, from 10 am to 2 pm.

The summit is the culmination of 18 industry stakeholder meetings held weekly from November 2021 through April 2022.

The summit will begin with a plenary session from 10:00 am to 11:00 am (Eastern) that will be followed by breakout sessions where groups will be asked to comment on and refine the read-ahead draft provided by Commissioner Bentzel and FMC staff.

The goal of the MTDI is to streamline how industry communicates and shares data to make cargo movement more efficient. Key to achieving this objective is harmonizing definitions, standardizing data reporting, and timeliness in sharing data and making recommendations on how our data supply chain can be more efficient.

Participants have been provided draft materials based on the feedback from the weekly meetings. The Plenary Session can be viewed by the public on the FMC YouTube channel.

“I look forward to welcoming the weekly meeting participants to the Commission next month where we will finish the work we started in December. Industry committed to this initiative and industry recognizes there are issues to be addressed and an opportunity to make improvements in data and information sharing. This effort puts us on a path forward and towards collaborative solutions. I have faith we will be successful in uniting around a set of data transmission standards.”

At the end of the breakout sessions, there will be a readout of the daily work and FMC will integrate comments into a report from which the Commissioner will draft recommendations. Commissioner Bentzel will be presenting these recommendations at the July 13th Commission Meeting.

“This has been and will continue to be, a completely open process. Every meeting has been recorded and is available on the FMC YouTube channel,” said Commissioner Bentzel. “We still have a lot of work to do, but I am confident in that we have the key people with the right expertise committed to this project and its success. We are well on our way to a productive summit and outcome.”

All the weekly participants have been invited. Most will be participating in person. There will be a virtual component for those who cannot make the trip to Washington, DC.