Hapag-Lloyd Reaches $2 Million Settlement With FMC for Violations of Detention, Demurrage Rule

The Federal Maritime Commission this week approved a $2 million settlement agreement with Hapag-Lloyd for alleged shipping violations involving the company’s detention and demurrage practices. Hapag-Lloyd also agreed to take several steps to improve its billing practices, including posting an updated tariff policy to its website, conducting a “training session” on the FMC’s detention and demurrage rule for all employees involved in billing, and publishing on its website a “complete list of locations that it has authorized to accept empty Hapag-Lloyd containers.”

The FMC “must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters,” Chair Daniel Maffei said. “The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules -- and in particular, the interpretive rule on detention and demurrage charges.”

A U.S. administrative law judge in April initially ordered Hapag-Lloyd to pay $822,220 after an FMC investigation determined the carrier imposed unfair detention fees on a drayage provider that was unable to make appointments to return empty containers (see 2204260028). The FMC ultimately finalized a higher penalty with Hapag-Lloyd as part of the settlement, saying in an order that the commission has a “longstanding policy of encouraging settlements.”

Hapag-Lloyd is "pleased" to have reached an agreement to drop the detention fee case, a spokesperson said in a June 9 email. The settlement "creates a common understanding in close cooperation and coordination with the authority on the future handling of demurrage & detention charges in the U.S.," the spokesperson said.

The case and settlement marked the first enforcement ruling alleging a violation of the FMC’s May 2020 rule on detention and demurrage charges, which outlined how the agency views the “reasonableness” of the fees (see 1909130026 and 2004290037).