News / FMC 'bias toward carriers' a 'slap in the face' for SMEs pursuing a claim

Shippers and forwarders claim the US Federal Maritime Commission (FMC) litigation process is ‘unfairly tilted in the carrier’s favour’, leaving SMEs with “a slap in the face” feeling.   

During maritime lawsuits, FMC regulations and guidelines state that if the respondent – often an ocean carrier – fails to respond by the date set by the commission, the complainant – often a shipper or forwarder – wins the case by default.   

However, one SME shipper with an ongoing claim told The Loadstar: “The trouble is, FMC does not seem to follow its own regulations.”  

They explained that during their case, the carrier had failed to respond by the set date and, “instead of reaching a judgement on the case, as the shipping company had not addressed our complaint, the FMC decided to offer extensions”. 

They added: “Moreover, they offered four extensions – and all this without the shipping company even asking.”  

Sara Dandan, founder of maritime dispute specialist FourOneOne, noted that charges also accrued as a case continued, meaning each 30-day extension would result in costs of “thousands of dollars”.  

“In a case where there are ongoing and accruing charges, 30-day extensions unilaterally given to non-responsive parties can literally mean that the aggrieved party is being saddled with the potential of thousands of dollars more in charges accruing continuously. That’s a big problem for shippers,” she said.

Abe Orgel, CEO of Simple Forwarding, also told The Loadstar he had faced a similar issue during his claim for $6,000 worth of unfair demurrage charges.  

“The carrier didn’t respond on time, but got an extension without even asking for it,” he said. “I can see why a carrier would ask for an extension; they might be overwhelmed with so many different cases of people frustrated just like me, and maybe they can’t handle the influx. But in this case, they hadn’t even asked for an extension.  

“I said, ‘please raise an argument, I’m waiting for an argument’, but there was none to be made, and still the FMC favoured the carrier instead of me, which is really unfair. 

“I lost my $6,000, but in addition it really demotivated me from filing any other disputes with the FMC.

“It’s like a slap in the face. It made me realise, ‘you’re on your own and no one out there is here to help you’,” Mr Orgel told The Loadstar.   

The shipper source explained: “These unsolicited, and unjustified extensions effectively puts me at a disadvantage in this case, as it prevents the case from following clear regulations and thereby reaching clear conclusions.   

“By offering these endless extensions to the shipping company, the FMC is implicitly siding with the shipping company, and sending the message to all that in the eyes of the federal government that those without connections or privileges – like myself – in effect do not deserve justice.” 

Ms Dandan commented: “The commission is breaking its own rules, and people are being hurt by it. The commission is in effect litigating on behalf of the respondent”.  

She said this appeared to be a persistent issue within informal small claims docket proceedings at the FMC, which not only incentivised large carriers to ignore the process, but resulted in financial strain for SMEs that rely on a timely resolution of unfair charges. 

“A lot of shippers and small claims aren’t represented by attorneys, so they are easier to play fast and loose with,” Ms Dandan concluded.