The Federal Maritime Commission approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Hapag-Lloyd AG (Hapag-Lloyd) where the ocean carrier will pay a $2 million civil penalty to address alleged violations related to their detention and demurrage practices, according to FMC's release.
“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,” Chairman Daniel Maffei said.
The order approving the settlement agreement follows an April 22, 2022, Initial Decision issued by the Commission’s Administrative Law Judge (ALJ) finding Hapag-Lloyd violated the law by knowingly and willfully 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 their violative actions. The case, Hapag-Lloyd, A.G. and Hapag-Lloyd (American) LLC—Possible Violations 46 USC 41102(c) (Docket No. 21-09), was initiated by the Commission on November 10, 2021, at the request of BoE and following their investigative work.
The $2 million civil penalty will be paid to the U.S. Department of the Treasury and will be deposited into the General Fund.