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Samsung Lodges Largest FMC Complaint Yet Over Detention and Demurrage Charges

The Loadstar
Total Views: 4249
June 10, 2024

By Alexander Whiteman (The Loadstar) –

Samsung’s US subsidiary has lodged what may be the largest complaint yet with the Federal Maritime Commission (FMC), claiming HMM imposed some 96,000 “erroneous” detention & demurrage (D&D) charges.

The complaint follows Samsung Electronics America (SEA) proceedings against Cosco, OOCL, SM Line and Zim, and while the financial claim has yet to be made public, it could easily hit the tens of millions.

SEA’s filing claims: “Beginning approximately mid-2020, HMM began repeatedly and chronically failing to maintain just and reasonable practices in connection with its inland transportation obligations, including failing to timely remove SEA containers from US marine and intermodal terminals and failing to timely deliver SEA containers to their designated inland locations.

“During that same period, HMM began charging SEA dramatically increasing amounts for alleged D&D charges resulting from HMM’s inland transportation failures.”

Samsung says HMM “proffered various excuses” for the charges, from chassis and trucker shortages to congestion and inclement weather.

The sheer scale of the complaint against HMM has blown the previous record-holding FMC complaint from SEA, against Cosco and involving some 22,000 charges, out of the water.

And, given that average D&D costs range from $75 to $300 per box per day, even the lower end would leave HMM looking at a compensation payout in excess of $7m, based on calculations by The Loadstar.

Efforts to resolve the dispute have proved unsuccessful, with HMM suggesting a “charge-by-charge assessment of responsibility” for all 96,000 charges.

This latest filing builds on a cascade of complaints against carriers and forwarders to the FMC in the two years since the passage of the US’s bipartisan Ocean and Shipping Reform Act (OSRA) in mid-2022.

An investigation conducted by The Loadstar found 29 claims had been lodged – now 30 –for at least $67m, although many lacked a dollar figure in their claim.

The biggest was from now-bankrupt retailer Bed, Bath and Beyond, seeking more than $31m in unfair shipping practices against carriers including Evergreen, MSC and Yang Ming, while Giti ($12.3m) and Peloton (unspecified “millions”) have filed against Flexport.

CMA CGM, Cosco, Hapag-Lloyd, ONE  and OOCL are also among major carriers facing claims.

While welcoming the ability to chase down those pursuing unfair D&D practices, there are many in the sector who believe OSRA and the FMC have not gone far enough, failing to address “erroneous” invoicing.

At the end of May, the FMC revised its D&D rules and introduced new requirements for billing, timeframes and how to dispute unfair charges. It said the revision would “promote supply chain fluidity by ensuring a clear connection between the failure to pick up cargo or return equipment in a timely manner and the appropriate fee”.

But Ian Weiland, COO of LA-based trucking company Junction Collaborative Transports, told The Loadstar there remained a loophole that could leave truckers with the bill.

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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