Company Fined $120,000 for Obtaining Transportation at Lower Rates

Prime Shipping International, Inc. dba Prime Agency, based in City of Industry, California, entered into a compromise agreement with the Federal Maritime Commission and paid a penalty of $120,000, to settle the allegation that it knowingly and willfully obtained transportation at less than applicable rates and charges by unlawfully accessing service contracts to which they were not a party.

The FMC alleged that between January 8, 2015 and June 27, 2015, Prime Shipping knowingly and willfully unlawfully accessed Kawasaki Kisen Kaisha, Ltd. service contracts to which it was not a party, thereby obtaining ocean transportation at less than the rates and charges that would otherwise apply.

During the same period, Prime Shipping allegedly provided transportation in the liner trade that was not in accordance with the rates and charges set forth in its published tariff or in any non-tariff alternative authorized by the Commission’s regulations.

FMC Commissioners Want Maritime Workforce Prioritized for Vaccinations

FMC Commissioners Carl W. Bentzel and Daniel B. Maffei sent a letter to President Biden and other Administration officials reiterating the importance of vaccinating the maritime workforce.

They recommend that the maritime workforce "be given access to rapid testing in order to help minimize workplace disruption, given their critical role in moving medical supplies, personal protective equipment (PPE), and handling what is an unprecedented amount of consumer goods arriving at gateway ports."

"From Maine to Texas, the International Longshoremen’s Association (ILA) has reported 784 positive tests with 1,855 quarantines from March 2020 to January 25, 2021. During the same period, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) reported that 1,034 maritime workers contracted COVID-19 in California, Washington, and Oregon. These numbers continue to trend upward and show the risk to our Nation’s supply chain," they wrote.

In December, they also sent a letter to MARAD Administrator Adm. Mark Buzby and CDC Director Dr. Robert Redfield, urging them to prioritize PPE, rapid testing supplies, and vaccines for the maritime workforce.

FMC Hikes Maximum Penalties & Issues Proposed Service Contract Rule

The Federal Maritime Commission has increased the maximum penalties assessed for statutory violations effective January 15, 2021, as required by the Federal Civil Penalties Inflation Adjustment Act of 2015. The increases are tied to the rate of inflation. Maximum penalties for knowing and willful violations of the Shipping Act increased to $61,820, from $61,098; and, maximum penalties for violations that are not knowing and willful increased to $12,363 from $12,219. The Commission also increased the fees for 9 other penalties. The complete list of penalties is published in the Federal Register and on the Commission’s website.

Proposed Rule on Service Contract Relief

The FMC issued a Notice of Proposed Rulemaking (NPRM) that, if adopted, will permit ocean carriers to file original service contracts at the agency up to 30 days after going into effect.

Members of the public have until March 4, 2021 to file comments in response to this NPRM. The Commission will consider all public comments before voting on final regulatory actions.

Current FMC regulations require the filing of initial service contracts with the FMC before an ocean carrier is permitted to receive and move cargo under the terms of that contract. Amendments to previously filed service contracts may be filed up to thirty days following the commercial effective date of the amendment. Following an April 2020 Commission vote that addressed COVID related impacts to the supply chain, the Commission granted temporary regulatory relief that allowed ocean carriers to file initial service contracts up to 30 days after contract terms had been agreed to.