Hapag-Lloyd in $2 million settlement with FMC

Written by Nick Blenkey
FMC Chairman Maffei comments on detention and demurrage case settlement

FMC Chairman Daniel Maffei: “To restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary.”

The Federal Maritime Commission yesterday approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Hapag-Lloyd AG. It will see the ocean carrier pay a $2 million civil penalty to address alleged violations related to its detention and demurrage practices.

“To restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary,” said FMC Chairman Daniel Maffei. “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,”

The order approving the settlement agreement follows an April 22, 2022, Initial Decision issued by the FMC’s Administrative Law Judge (ALJ) finding that 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 its 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 its general fund.

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