A small complaint by SOFi Paper Products is spotlighting the enforcement efforts under the Shipping Reform Act, with the FMC issuing a “show cause” order against MSC for congestion fees that were charged to the shipper in July 2022.
SOFi Paper Products asked MSC to justify a $1,000 “congestion surcharge” that was billed on a July 2022 invoice. As the company did not receive a response from MSC, it turned to the FMC.
As a result on February 3, the FMC issued the “show cause” order to MSC, giving the company 25 days to respond and provide a justification for the charge.
The respondent’s failure to show the reasonableness of the charge or provide justification for the charge demonstrates that the charge may constitute an unreasonable action or practice
the order said.
The FMC had forecast that the act could cause a wave of new complaints against the carriers and has been working to build the new investigative and enforcement structures required by the legislative reforms.
As a matter of fact, many carriers have been the subject of complaints, including MSC. The company has been involved in a high-profile case from a Pennsylvania furniture company that even before the reform act’s passage contended in a complaint to the FMC that the carrier had denied services under its long-term freight contract forcing the furniture company to pay inflated prices in the spot market to complete its shipments.
MSC has responded to the complaint from the furniture company saying it was a failure to communicate and that it never received the requests.
Later, an FMC administrative judge found the carrier in default on a technicality for not supplying information during discovery which MSC contends it was legally unable to do under Swiss law.
MSC appealed the technical default judgment to the FMC saying the case needs to be heard on its merits.
