US tariffs will support ocean demand and keep rates high, says Wan Hai
US tariffs will support elevated ocean freight rates going into October, according to Wan Hai ...
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It has been a busy fortnight for the US Federal Maritime Commission (FMC), having slapped Maersk with a $1.9m fine, welcomed a new commissioner, and experienced an influx of new claims against carrier D&D practices.
Showing no sign of abating is shipper desire to claw back the staggering sums paid in unfair detention and demurrage (D&D) charges during the pandemic – Cosco and Wan Hai Lines both before the FMC facing claims of unfair charges.
Wan Hai is accused of “repeatedly failing to properly perform its obligations for inland transportation”, and then seeking to hit the shipper, Samsung, with bills for D&D – its claim is covering $1.2m for fees beginning September 2021 .
“Aware of challenges with intermodal transportation logistics, after 2021 Wan Hai continued accepting transportation of SEA [Samsung’s] goods for store door delivery under through bills of lading, or sea waybills for inland delivery in the US,” the shipper claims.
“It continued to repeatedly fail to properly perform its inland transportation obligations, exposing SEA to unreasonable costs, charges, delays, and other harms. When asked to explain the reason for assessing charges on SEA, Wan Hai proffered various excuses.”
These included claims of chassis and trucker shortages, inclement weather, and port and terminal congestion, all beyond the control or responsibility of Samsung, but Wan Hai repeatedly refused to “mitigate, cancel, or waive” charges.
Quite what Samsung’s chances in appealing to the FMC remain to be seen, but in recent months the FMC has appeared more willing to side with shippers – this week announcing that Maersk should not only pay a $1.9m fine, but issue refunds over “allegations it violated the Shipping Act by assessing detention charges pursuant to service contract and tariffs against third parties,” said the FMC.
“These parties had not consented to Maersk’s bills of lading, service contracts, or tariffs. Maersk agreed to terminate this practice and limit definition of merchant in bills of lading to shippers, consignees, and persons with a beneficial interest in the cargo.”
The developments of recent months suggest a more front-footed approach from the FMC under Laura DiBella, a Trump appointee, who had faced question marks that her tenure may be marked by leaving shippers out in the cold.
Sources admitted that the FMC under her tenure had shown itself willing to go after carriers, but questions have still been raised over whether such support is available for smaller shippers, for which the cost of pursuing a claim may dwarf potential gains.
Addressing Congress yesterday, Ms DiBella said: “Under the Trump administration, the FMC remains steadfast in fulfilling its commitment to US shippers and consumers, as evidenced by the significant increase in cases, investigations, and monitoring.
“The FMC will continue to use the full scope of our enforcement authorities, where appropriate, to protect exporters and importers from potential anticompetitive or unfair and deceptive behaviour.”
And the commission will now do that with a full contingent of commissioners following the news that Robert Harvey will take the seat left vacant after Carl Bentzel’s departure in December 2024.
Mr Harvey’s appointment is the second of the second Trump presidency, having been nominated in September, and sees him join Ms DiBella and Rebecca Dye to make up a trio of Republicans stacking the five-member board.
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