A US administrative law judge has ordered German shipping liner Hapag-Lloyd to pay a California drayage provider US$822,220 in civil damages stemming from a Federal Maritime Commission (FMC) investigation into whether the carrier improperly assessed detention charges on 11 containers in mid-2021, reports IHS Media.
In justifying the amount of the penalty, the FMC's Bureau of Enforcement (BOE) determined that Hapag-Lloyd acted 'knowingly and willfully - [in] -imposing and refusing to waive detention charges where there were insufficient appointments to return these empty containers.'
The detention charges, assessed by Hapag-Lloyd's North America agent to Golden State Logistics (GSL), amounted to $10,135.
At the heart of the case is whether Hapag-Lloyd recognised that GSL was actively attempting to return empty containers to the appropriate terminals at the ports of Los Angeles and Long Beach.
GSL asserted in a December claim against the shipping line that it could not make appointments to return the empties, despite repeated attempts and despite using a technology platform called BlueCargo that aggregates and displays empty appointment availability across all terminals in LA-LB.
The drayage provider further asserted that attempts to have the detention fees waived were denied or ignored by Hapag-Lloyd.
Hapag-Lloyd could not immediately be reached for comment.
The case could well be a bellwether for future actions against shipping lines relating to what shippers and drayage providers consider unfair assessment of demurrage and detention fees, also called per diem.
'While this is not a significant number of containers or days [of detention], Hapag-Lloyd has been clear that this was their normal policy and practice,' the ruling said.
'Therefore, it may be presumed that this issue was not isolated to these shipments, but that detention was imposed, and not waived, on other empty containers that could not be returned due to insufficient appointments.'
The BOE determined that not all 11 empties were hit with unfairly assessed detention fees, but noted that GSL's repeated attempts to find available appointments were sufficient to show intent. A key part of the law surrounding the ability of carriers to assess penalties for excess detention is to incentivise the rapid return of empties back to the shipping lines.
Hapag-Lloyd argued that the BOE did not have jurisdiction over the case, and GSL's failure to return the empties on time was 'due to the acts and/or omissions of the motor carrier and/or the cargo interest, and Hapag-Lloyd's conduct was reasonable in light of the totality of the circumstances.'
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In justifying the amount of the penalty, the FMC's Bureau of Enforcement (BOE) determined that Hapag-Lloyd acted 'knowingly and willfully - [in] -imposing and refusing to waive detention charges where there were insufficient appointments to return these empty containers.'
The detention charges, assessed by Hapag-Lloyd's North America agent to Golden State Logistics (GSL), amounted to $10,135.
At the heart of the case is whether Hapag-Lloyd recognised that GSL was actively attempting to return empty containers to the appropriate terminals at the ports of Los Angeles and Long Beach.
GSL asserted in a December claim against the shipping line that it could not make appointments to return the empties, despite repeated attempts and despite using a technology platform called BlueCargo that aggregates and displays empty appointment availability across all terminals in LA-LB.
The drayage provider further asserted that attempts to have the detention fees waived were denied or ignored by Hapag-Lloyd.
Hapag-Lloyd could not immediately be reached for comment.
The case could well be a bellwether for future actions against shipping lines relating to what shippers and drayage providers consider unfair assessment of demurrage and detention fees, also called per diem.
'While this is not a significant number of containers or days [of detention], Hapag-Lloyd has been clear that this was their normal policy and practice,' the ruling said.
'Therefore, it may be presumed that this issue was not isolated to these shipments, but that detention was imposed, and not waived, on other empty containers that could not be returned due to insufficient appointments.'
The BOE determined that not all 11 empties were hit with unfairly assessed detention fees, but noted that GSL's repeated attempts to find available appointments were sufficient to show intent. A key part of the law surrounding the ability of carriers to assess penalties for excess detention is to incentivise the rapid return of empties back to the shipping lines.
Hapag-Lloyd argued that the BOE did not have jurisdiction over the case, and GSL's failure to return the empties on time was 'due to the acts and/or omissions of the motor carrier and/or the cargo interest, and Hapag-Lloyd's conduct was reasonable in light of the totality of the circumstances.'
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