The US Federal Maritime Commission (FMC) has dismissed a shipper’s complaint that a US$1,000 congestion surcharge imposed by Mediterranean Shipping Company (MSC) was an unjust detention and demurrage charge.
This was because the surcharge was not a detention and demurrage charge at all.
On 3 February, US-based SOFi Paper Products, which had booked its shipment through an NVOCC, filed its complaint, seeking a refund of the congestion surcharge and alleging that the surcharge contravened the US Shipping Act as MSC did not justify it.
MSC’s initial response was that it was not the proper party in the proceeding, as the Swiss/Italian liner giant did not transact directly with SOFi, and that the NVOCC was its actual customer.
However, the FMC ruled that MSC acted as the ocean common carrier with respect to SOFi’s shipment, and was thus, the proper respondent.
On 13 February, MSC sent SOFi a cheque to refund the US$1,000.
All but one of the FMC commissioners threw out SOFi’s complaint, as unlike detention and demurrage charges, which are imposed when containers remain at a terminal after a complimentary period, the congestion surcharge did not fall under this description.
Delivering its ruling on 29 September, FMC said, “The amount of demurrage and detention charges, including ‘per diem’, generally depends on the length of the use of space or containers after the free time. It does not appear, however, that the assessment of the congestion surcharge depended on the expiration of any free time. Rather than specific use of land or containers, it appears that the congestion surcharge was assessed for each container with respect to the overall flow of transportation.”
As MSC had returned the US$1,000 to SOFi, the refund demand was moot.
Martina Li
Asia Correspondent
