The US Federal Maritime Commission (FMC) has imposed a civil fine totaling $22.67 million on the world’s largest shipping company, MSC Mediterranean Shipping Company.
The reason for this are several violations of the US Shipping Act that extend over several years.
As the FMC announced in a statement, some of the allegations relate to the period from 2018 to 2020, during which MSC also charged demurrage and detention fees to customs agents as “notify parties” via a so-called “merchant clause” in the bills of lading, even though they were not involved in the physical handling of the shipments. The Commission thus confirmed an earlier decision by an administrative judge, according to which this procedure constitutes an unlawful business practice. The FMC imposed a fine of $65,000 for these violations.
However, in the opinion of the authority, the violations in connection with non-operating reefers (NORs) are more serious. The FMC found that MSC had not sufficiently explained in its published tariffs in the years 2021 to 2023 what the corresponding fees were charged for. Although the Commission confirmed the breach of the tariff obligations, it only classified the conduct as knowing and intentional from March 2022 – the date on which MSC had promised the authority to adjust the tariffs. The fine imposed for this amounts to $9.46 million.
However, the largest part of the total sum is accounted for by another FMC decision. According to this decision, MSC had systematically overcharged customers for demurrage and detention fees when using NORs. Contrary to the assessment of the administrative judge, the Commission did not regard this as a mere billing error. After evaluating the data, it came to the conclusion that around 23% of all NOR invoices were overcharged in 2021. This approach constituted an inappropriate business practice within the meaning of the Shipping Act. The FMC imposed a fine of $5,000 per violation, totaling $13.145 million.
The total of all sanctions imposed in the proceedings thus amounts to $22.67 million. According to the FMC, the fines will not be paid to the authority itself, but directly to the general budget of the US Treasury Department.
