Supply Source Accuses Multiple Carriers of Charging Unfair Detention and Demurrage
Two Supply Source subsidiaries filed another five complaints at the Federal Maritime Commission Feb. 14 against multiple carriers, accusing them of violating the Shipping Act and charging unfair detention and demurrage from 2021 to 2022, leading to over $2.1 million in financial damages. The companies include COSCO Shipping Lines, Lihua Logistics Company Limited, CMA CGM, Overseas Container Line Limited, and Yang Ming Marine Transport Corp.
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The complaints, filed by Impact Products and Safety Zone, followed a complaint filed that same day against another carrier, Mediterranean Shipping Co., for more than $200,000 in damages for unfair detention and demurrage (see 2402140014).
The carriers charged Supply Source, a Connecticut-based shipper focused on cleaning and safety products such as personal protective equipment, detention and demurrage when their ability to pick up containers was "significantly constrained" due to circumstances outside their control such as equipment shortages or congestion at ports, the shipper said. The carriers also refused to Supply Source more free days because the delays were outside their control, Supply Source said.
Supply Source said the charges assessed were “not just or reasonable because of circumstances outside” its control.
The shipper claimed damages exceeded over $1 million because of charges from COSCO, over $600,000 from Lihua, over $150,000 from CMA CGM, over $400,000 from OOCL, and over $1 million from Yang Ming
Like in its MSC complaint, Supply Source said that the FMC in Fact Finding Investigation 29 said that "'the purpose of demurrage and detention are to incentivize cargo movement'" (see 2205190035). The carriers' charges and omissions that led to the charges were "incapable of incentivizing cargo movement and therefore unreasonable," Supply Source said.
If the carriers' practices aren't fixed, these practices will become "industry standard" and lead to a situation "where all carriers can impose unfair and unjust detention and demurrage charges," it said.
All five carriers, like MSC, are alleged to have failed to "establish, observe, and enforce just and reasonable practices" for handling its cargo and “unreasonable refusal to deal or negotiate,” the shipper said. It's asking for an investigation, an order finding that the carriers violated the Shipping Act, an order requiring reparations for the financial damage, and any other relief the FMC deems “just and proper.”
All five carriers didn't respond to our request for comment.