Alphaliner reported last week on the latest claim made by SEA to the Federal Maritime Commission against the South Korean line HMM. The South Korean line allegedly charged 96,000 detention charges and demurrages (D&Ds) in error during pandemic.
The HMM claim follows a series of similar claims made against carriers in the Pacific trades including COSCO, its subsidiary, OOCL and Zim, as well as SM Line and SM Line.
In its latest action Alphaliner stated that the shipper: “Alleges from mid-2020 HMM started’repeatedly failing to maintain fair and reasonable practices’ in connection with their inland transportation obligations”.
In its filing with the FMC, SEA cites eleven “unreasonable” actions that HMM took during the period under consideration that resulted excessive D&D fees, which Alphaliner claims could reach millions of dollars.
SEA alleges that HMM restricted or refused empty returns. It also claims that the carrier exacerbated delays due to port congestion. There were shortages of trucks, road and rail chassis, and rail and road chassis. HMM failed to provide support and locate containers, and the carrier unilaterally rerouted the cargo.
The shipper also claims that HMM “started dramatically increasing amounts for alleged D&D fees resulting from HMM’s inland transport failures”.
SEA claims that these 96,000 incidents are related to freight moved through door-to-door contracts. This means that the carrier was contracted to pick up, transport, and deliver the goods at the required inland destination.
At the heights of the pandemic, equipment shortages and congestion caused cargo to be stranded in ports. Empties were also unable to be delivered. SEA claims that under the agreements, the carrier is responsible for all D&D costs and delays.
The line allegedly withheld cargo delivery until all D&D fees were paid in violation of US shipping laws.
The FMC docket also outlines discussions between SEA & HMM which the shipper stated were held in good-faith. HMM decided to not address the offer of mediator but said that it would rather deal with each of the 96,000 individual issues.
In a last attempt to reach a resolution, SEA and HMM met this February: “In its Renewed Demand, SEA highlighted substantial data and documentation that supported the claims that were already provided to HMM. It also included an enhanced analysis of damages suffered by HMM as a result HMM’s actions. SEA made a request to HMM to agree to meaningful settlement negotiations in front of a mediator.” HMM declined to participate in mediation once again, which led to the filing of the FMC on the 5th June.
In a complaint against Chinese operator COSCO SEA claims that after agreeing to investigate SEA’s complaints, the carrier said: “In subsequent weeks and months, no meaningful dispute resolution was made.” COSCO refused to or was unable to evaluate its own charges. In some cases, COSCO could not substantiate the invoices and charges that were issued by SEA Containers.
In a second case, SEA alleges again that COSCO subsidiary OOCL refused to negotiate over the charges and filed charges with the FMC.
In the case against Zim, the inland complaint is similar to that of other carriers. However, SEA alleges, in addition, that Zim took retaliatory actions following the shipper’s complaint in violation of FMC regulations.
“In response to Complainant’s efforts to address ZIM’s shipping and charging policies, resolve disputes, dispute invoices and dispute invoices, ZIM retaliated against Complainant and SEA containers with respect to the delivery of cargo and refusing to provide cargo space accommodation.”
If proven, such actions could increase the fines that the carrier will have to pay.
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