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Commission Questions Shipping Lines About Surcharges

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The Federal Maritime Commission has launched an expedited inquiry into the timing and legal sufficiency of ocean carrier practices with respect to certain surcharges.

Eight ocean carriers are being asked to provide the Commission’s Bureau of Enforcement (BoE) with details about congestion or related surcharges they have implemented or announced.

BoE has given the ocean carriers until August 13, 2021, to provide details that confirm any surcharges were instituted properly and in accordance with legal and regulatory obligations.

This action was taken in response to communications received by the Commission from multiple parties reporting that ocean carriers are improperly implementing surcharges. The companies contacted are CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line; and Zim. Each ocean carrier was identified as having recently implemented or announced congestion or related surcharges.

Ocean carriers are subject to specific requirements related to tariff changes or rate increases, including providing a 30-day notice to shippers and ensuring that published tariffs are clear and definite.

In reviewing ocean carrier responses, the Commission will determine if surcharges were implemented following proper notice; if the purpose of the surcharge was clearly defined; if it is clear what event or condition triggers the surcharge; and is it clear what event or condition has been identified that would terminate the surcharge. The Commission can initiate enforcement actions for improperly established tariffs.

“The COVID-related spike in demand for imports has pushed cargo rates to record highs,” said Chairman Maffei. “Now, we hear increasing reports of ocean carriers assessing new additional fees, such as ‘congestion surcharges,’ with little notice or explanation.”

“The congestion is due mostly to the tremendous volume of traffic coming from ocean carriers and through ports to satisfy the record demand for imports. Far from being a sudden occurrence or isolated to a port or geographical area, congestion of the freight transportation system is everywhere and has been going on for many months. It seems to me that these factors would already have been included into the record high rates charged by the carriers. As Chairman, I want to know the carriers’ justifications for additional fees and I strongly support close scrutiny by the FMC’s Bureau of Enforcement aimed at stopping any instance where these add-on fees may not fully comply with the law or regulation,” concluded Chairman Maffei.