Container lines are facing a backlash from shippers ready to turn to the courts to find out who is responsible for runaway demurrage fees at Los Angeles and Long Beach ports.
The issue is expected to move into the courts this year, after FMC issued new guidelines on the issue of legal challenges on 28 December 2021.
As informed, the policy statements were proposed by commissioner Rebecca F. Dye in a set of Interim Recommendations she issued in July 2021. The FMC voted in September 2021, to implement her recommendations that do not require legislative action.
In the first policy statement, the FMC reiterates that shippers’ associations and trade associations may file a complaint alleging a prohibited act violation under 46 U.S.C. Chapter 411. This allows these organizations to protect the interests of their members while also providing shippers with a degree of separation and insulation from potential retaliation.
The second statement explains the Commission’s approach to attorney fees and reiterates that a party who brings an unsuccessful complaint is not automatically required to pay the other party’s attorney fees. The Commission will look favourably upon complainants who raise non-frivolous claims in good faith, who litigate zealously but within the rules and for proper purposes, and who comply with the Commission orders.
Finally, in the third statement on retaliation, the FMC emphasizes that it broadly defines both who can bring a retaliation complaint, as well as the types of shipper activity that are protected under the existing retaliation prohibitions. This policy statement also addresses the proof necessary for certain retaliation complaints.
More specifically, a legal complaint was filed with the FMC on 7 January 2022 by shipper group Orange Avenue Express Inc and One Banana against Hapag-Lloyd. The complaint could establish a precedent for where responsibility for delays and costly demurrage and detention fees lies in US ports.
The complaint regards increased difficulties experienced by One Banana since September 2021 to get its shipments to customers.
More specifically, the importer claims that port congestion and unfair practices by Hapag-Lloyd have cost the company in excess of $687,470.50 in “unfair demurrage and detention charges, and costs in connection with dumping, inspection, and transportation of the perished cargo”.
The shipper also claims that it experienced delays on 77 containers in eight shipments at the end of 2021.
