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FMC Dismisses ‘Unjustified’ Shipper Complaint Against MSC

The Loadstar
Total Views: 1341
October 3, 2023

By Charlotte Goldstone (The Loadstar) –

The US Federal Maritime Commission has dismissed the latest case against the world’s largest container line, MSC – a decision that could set a benchmark for other shippers.   

The case was brought by SOFi Paper Products, which received a congestion surcharge of $1,000, but claimed MSC could not justify it.  

The FMC’s Office of Enforcement said: “Given the possibility that the surcharge may have been levied upon more of MSC’s customers in addition to SOFi since the enactment of the Ocean Shipping Reform Act of 2022 . . .such an undertaking would arguably be to the benefit of all members of the shipping public who may have been billed by MSC for this ambiguous surcharge subsequent to the enactment of OSRA 2022”. 

MSC, however, retorted: “The commission lacks the legal authority to challenge the amount of the charge.”

The carrier claimed it was “under no legal obligation to justify the congestion surcharge any more that it is required to justify other surcharges, such as fuel surcharges, bill of lading surcharges…”.  

It further argued: “There is no issue of clarity here – the charge applies on all cargo subject to the tariff in question, and there is nothing ambiguous or unclear in the application of the charge…” 

The FMC concluded that the record was insufficient to establish that a violation of OSRA had occurred, a ruling that will interest many in the industry.  

Chairman Daniel Maffei said he understood the standard the ruling could set for shipping companies, as he had previously told The Loadstar: “If there is a matter of principle involved, it’ll come up. . .when the principle does come up, it almost doesn’t matter how much money it is. 

“But the precedent is huge for the industry, because it involves when you’re allowed to charge, what kind of fee are you allowed to charge over a weekend.” 

The FMC implemented the Ocean Shipping Reform Act in 2022 in a bid to tackle ‘abuse’ of the system and restore its credibility.  

Mr Maffei told The Loadstar Podcast: ‘‘Before the pandemic, certainly during the pandemic, these [surcharges] were being abused to make even more money and didn’t have anything really to do with moving cargo. As a result, the system lost credibility. . . So, we changed that, and now shippers are certainly getting the message; I’ve certainly seen better behaviour”.  

Despite this claim, however, MSC currently finds itself amid a multitude of open cases involving complaints about surcharges.

The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.

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