News / Samsung takes action over thousands of 'unlawful' D&D charges by Cosco and OOCL

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Samsung Electronics America (SEA) has filed two complaints with the US FMC over “excessive and unlawful” detention and demurrage (D&D) charges issued by Cosco and OOCL. 

Both complaints involve D&D fees for goods shipped under “store door” terms, which cover delivery to a port and onto an inland destination, as offered by both lines. 

The case against Cosco notes: “Beginning in approximately 2020, Cosco began repeatedly failing to properly perform its obligations for inland transportation to the inland destinations. Aware of challenges with intermodal transportation logistics, Cosco continued to transport SEA goods on store door terms … and continued to repeatedly fail to properly perform its inland transportation obligations, exposing SEA to unreasonable costs, charges, delays, and other harms.  

“As a result of Cosco’s unreasonable practices, SEA has been forced to pay excessive and unlawful charges assessed by Cosco … and has been forced to undertake and perform the ocean carrier’s inland transportation responsibilities in order to continue to import its products sold to American consumers.” 

Citing an interview with FMC chairman Daniel Maffei, on The Loadstar Podcast, Samsung noted that Cosco should have “been very concerned about changing its behaviour when on notice by the FMC of wrongdoing…”. 

SEA noted that Cosco had faced a number of other complaints by shippers for similar behaviour. 

“The consistency in the allegations across the complaints highlights that Cosco’s conduct with respect to detention and demurrage charges was part of a broader unreasonable practice and policy,” it said. 

SEA has accused Cosco of holding its containers “hostage” and threatening to withdraw further services, despite knowing that there were “systemic, ongoing and well-known” issues with inland transportation. 

“SEA is entitled to seek reparations for rail storage charges, even if Cosco did not directly assess the charges or receive the payments. What matters is that SEA was forced to pay these charges assessed by Cosco’s subcontractors, agents, or otherwise”. 

SEA said it had faced more than 5,000 demurrage charges for rail storage. 

“The staggering costs of demurrage and detention charges are unsustainable, present a material threat to SEA’s ability to provide its products to American consumers and have made it necessary to bring this complaint.

“As a result of Cosco’s conduct, SEA has sustained serious and substantial injuries and monetary damages, including paying erroneous demurrage and detention charges, which continue to be tabulated and accrued as of the filing of this complaint. SEA paid over 22,000 demurrage, detention, and associated charges.” 

Samsung claimed it had tried to resolve the matter through meetings, initially in October 2022, when a Cosco commercial manager said the line would “crunch the numbers”and meet again a fortnight later. 

“In the ensuing weeks, and ultimately months, there was no meaningful dispute resolution progress made,” said SEA. “Indeed, it became apparent to SEA that Cosco was unwilling or unable to even meaningfully evaluate its own charges, and in significant instances, Cosco did not know and could not substantiate Cosco’s own charges and invoices on SEA containers that had been issued and paid.” 

A further meeting a year later also failed to resolve the dispute. 

The case against OOCL is similar, the line accused of violating the US Shipping Act, also causing SEA “serious and substantial injuries and monetary damages”. 

Responses by the lines are due within 25 days of the filing of the complaint.