The Federal Maritime Commission (FMC) has ruled that Israeli carrier Zim violated the US Shipping Act and must pay Samsung Electronics America (SEA) some $3.7m.
Yesterday, the FMC finalised its ruling on a complaint by SEA in October 2022 that Zim engaged in “unreasonable practices, retaliation, refusal to deal, and [sent] improper invoices for home appliance products shipped to the United States”.
Specifically, SEA alleged that Zim “shifted responsibility for demurrage and detention (D&D) charges in store-door moves”, citing unreasonable practices for nearly 10,000 separate charges on almost 3,000 containers.
SEA sought damages of over $12m – $10.8m for D&D charges plus $1.4m in additional costs, such as lawyers’ fees.
The disputes involved 9,984 separate demurrage and detention charges on 2,980 containers over an extended period, from July 2019 to December 2022, “making this a complex proceeding to resolve”, said the FMC.
Indeed, most of the related shipments occurred prior to the Ocean Shipping Reform Act passed in 2022, which created the FMC’s charge complaint process, designed to resolve such disputes quickly.
Zim argued that the accumulation of disputed charges was one of the reasons it imposed multiple cargo holds on SEA shipments, which prevented SEA’s cargo from being delivered and led to additional demurrage charges.
The carrier claimed SEA itself was responsible for some of the charges, likening it to “a dreaded group project”.
“It requires that the carrier has made the container available for pickup, the trucker has availability, chassis are available, the port is open, SEA’s customer has appointments and staff to unload the container timely, and the trucker is available and can find an appointment to return the empty container,” it argued.
“Sorting out responsibility is a complex undertaking, requiring reviewing emails and evidence regarding the cause of delay for each container. And some delays are not the fault of either party,” it explained.
However, Zim’s argument that holding the cargo was justified until debt was paid was ruled to be not sufficient. However, SEA was unable to prove that Zim was responsible for all D&D charges, and the FMC ruled that some were due to SEA’s customers’ inability to accept deliveries.
“Therefore, charging demurrage for store-door/carrier haulage is not found to be an unreasonable practice. Moreover, SEA has not established that Zim retaliated, refused to deal, or that Zim’s post-OSRA invoicing violated the OSRA invoicing requirements,” added the commission.
The FMC ruled that demurrage charges found to violate the Shipping Act totalled $3,680,339 and ordered that any other pending motions or requests related to the case should be dismissed as moot, and that the proceeding be discontinued.
Meanwhile, Samsung has a litany of other cases under way with the FMC. Media has reported on its proceedings against Cosco, OOCL, SM Line and HMM – the latter being its largest complaint yet, claiming HMM imposed some 96,000 “erroneous” D&D charges.
