Hapag-Lloyd in $2m settlement with FMC

The US Federal Maritime Commission (FMC) on June 8th approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Germany-based shipping line Hapag-Lloyd AG.

The agreement will see Hapag Lloyd pay a $2m civil penalty to address alleged violations related to its detention and demurrage practices.

FMC Chairman Daniel Maffei  said that “to restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary. Specifically, we must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters. The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules – and in particular, the interpretive rule on detention and demurrage charges,”

The order followed an April 22nd Initial Decision issued by the FMC’s Administrative Law Judge (ALJ), which concluded that Hapag-Lloyd violated the law by knowingly and wilfully failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivery property, by unreasonably refusing to waive detention charges, in violation of 46 USC 41102(c).

The ALJ ordered an $822,220 civil penalty and for Hapag-Lloyd to cease and desist its violative actions.

The case was initiated by the FMC on November 10th 2021, at the request of BoE. The penalty will be paid to the US Department of the Treasury and will be deposited into its general fund.