Company Fined $75,000 for Obtaining Transportation at Lower Rates

Walmay Logistics, Inc., a licensed NVOCC based in Diamond Bar, California entered into a compromise agreement with the Federal Maritime Commission and paid a penalty of $75,000, 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 June 14, 2015 and April 19, 2016, Walmay Logistics knowingly and willfully permitted an unrelated, non-signatory party to access COSCO contract no. CFN15001, thereby obtaining ocean transportation for such third party at less than the rates and charges that would otherwise apply

The compromise agreement also alleged that Walmay Logistics provided transportation in the liner trade that was not in accordance with its published tariff.

FMC's BoE Accepting Complaints on Container Detention Issues

Shippers and truckers who have evidence on ocean carriers and marine terminal operators not complying with the Final Rule on detention and demurrage may contact the Federal Maritime Commission’s Bureau of Enforcement (BoE), according FMC Commissioner Rebecca Dye.

Individuals with specific allegations of behavior that violates 46 USC 41102(c) when considered in the context of guidance provided in the Interpretive Rule on Demurrage and Detention Under the Shipping Act, should submit their complaint and supporting evidence to the Bureau of Enforcement by writing: BOE@FMC.Gov

The Commission published in April 2020 its interpretive rule providing guidance to industry on how the reasonableness of detention and demurrage regulations and procedures would be assessed. Since then, the agency has received feedback from shippers and other parties critical of the level of compliance carriers and MTOs have shown to the new rule.

Commissioner Dye is in charge of conducting Fact Finding 29, “International Ocean Transportation Supply Chain Engagement”, which was launched in March 2020.

On November 19, 2020, the Commission voted unanimously to issue a Supplemental Order to Fact Finding 29, reinforcing the broad authority for Commissioner Dye’s investigation. One of the three areas the Supplemental Order identifies for further examination is whether detention and demurrage practices of ocean carriers operating in an alliance and calling at the Port of Los Angeles, Port of Long Beach, or the Port of New York & New Jersey violate 46 USC 41102(c).

Ocean Carriers Urged to Carry U.S. Exports to Keep Balanced Trade

Reports that ocean carriers are refusing the carriage of U.S. exports have alarmed FMC Commissioners Carl W. Bentzel and Daniel B. Maffei.

Their growing concern led the FMC Commissioners to send a letter to World Shipping Council President and CEO John Butler urging the organization to take "vigorous action" to protect U.S. exporters.

"In responding to import cargo challenges, ocean carriers should not lose sight of their common carriage obligations to provide service to U.S. exporters," the Commissioners wrote.

"As our ports experience unprecedented cargo surges, it is imperative that we strive for a balanced trade to keep our supply chain fully effective and efficient, while maintaining vital export opportunities for the U.S. agriculture and manufacturing bases," they added.

Mr. Butler responded with a letter addressed to the Commissioners, wherein he assured that the carriers are taking action to remedy problems, according to Bill Mongelluzzo, Senior Editor at JOC.com.

In particular, Mr. Butler related that "carriers are employing all available vessel capacity; repositioning vessels to those trades with the highest demand; speeding the return of excess empty containers and increasing cargo fluidity; purchasing, leasing, repairing, and deploying all available containers; and working with supply chain partners to reposition empty equipment for carriage of import and export cargoes."

However, Mr. Butler also noted that there are multiple factors outside of carriers’ control that negatively affect the free flow of cargo such as shortages of labor at marine terminals and inland distribution warehouses, importers’ extended use of containers and chassis at the warehouses for storage purposes, shortages of truck and rail capacity, and “no shows” by shippers with respect to vessel bookings and truck appointments at marine terminals.

World Shipping Council members operate approximately 90 percent of the global liner ship capacity, providing approximately 400 regularly scheduled services linking the continents of the world.