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Logistics
FMC launches probe into Wan Hai over detention charges
Date:2022-01-05 Readers:
THE US Federal Maritime Commission (FMC) has started an investigation into the container line Wan Hai over detention charges it assessed to shippers when it allegedly did not provide a way for shippers to return containers, reports IHS Media.

The investigation specifically points to 21 instances last spring where shippers were invoiced for detention, with charges ranging from US$125 to $1,550 per container.

The FMC filing said: "For each of these containers, Wan Hai issued an invoice for detention. Wan Hai either offered no return locations, the designated terminal was not accepting the containers' chassis, or appointments were unavailable for the subject containers."

The issue of empty returns and inaccurate assessment of detention to shippers and their drayage or logistics provider partners has become a key point of contention in 2021, and is being addressed in the Ocean Shipping Reform Act that passed the US House of Representatives December 8.

Wan Hai is the latest case to come before the commission over improper assessment of detention and demurrage fees, where a shipper fails to either pick up a box from a terminal or return an empty before its contracted free time expires.

The FMC clarified in a filing that complaints could be submitted by associations and trade groups, not just individual companies.

The FMC investigation announced that invoiced parties requested a waiver to avoid detention charges and provided Wan Hai with screenshots verifying that they were unable to return empty containers.

"Wan Hai denied the request to waive the charges," the FMC order said. "Wan Hai's justification for denying the dispute was that it was unable to waive the charges because it did not control the appointment system."

At issue is whether detention in such cases is serving to incentivise the return of equipment, and whether it constitutes a violation of part of the US Shipping Act that prohibits imposition of charges contrary to an agreement.

The investigation notice specified that "in assessing the reasonableness of demurrage and detention practices and regulations, the Commission will consider the extent to which demurrage and detention are serving their intended primary purposes as financial incentives to promote freight fluidity."

The investigation will examine whether, by not offering a location for a trucker to return an empty, or in situations where there are no available appointments with the specified terminal operator, or where the terminal operator is not accepting containers on a particular chassis "the incentive to return the container is not enhanced by detention charges."

The FMC will determine whether civil penalties should be assessed and, if so, in what amount, and whether a cease-and-desist order should be issued.

https://www.shippingazette.com/menu.asp?encode=eng

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