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MSC finally "toughened up"!

Ting https://mp.weixin.qq.com/s/6jYSL4-SMpgu9htLkFc1og 2024-05-13 09:59:04

Mediterranean Shipping Company (MSC), the world's largest liner company, has officially hit back at the U.S. Federal Maritime Commission (FMC), disputing the unprecedented "staggering" fine.

According to reports, the FMC Enforcement Office alleged that MSC "willfully" violated U.S. shipping laws during the supply chain crisis, was "evil in nature, widespread, and serious" and obtained unfair benefits at the expense of customers. It will face no less than 63.2 million dollar fine.

The MSC categorically denied breaking any rules, describing the fine as "astonishing" and unprecedented since the FMC was founded in 1961.

"The fine is approximately eight times greater than any fine ever imposed and more than 15 times greater than any fine ever imposed by the FMC," the MSC said.

At the same time, the MSC said that if a fine was imposed, it believed that a fine of US$2-3 million was more appropriate.

Simply put, the original intention of US President Biden signing the Shipping Reform Act of 2022 (OSRA 2022) is to give the FMC more regulatory powers. At the same time, the FMC has been critical of the most controversial charges of demurrage and demurrage (D&D) charged by liner companies, and has formulated and issued new rules for this purpose.

Indeed, in this particular case, the FMC alleges that MSC used its market dominance to "use heavy-handed tactics" by invoicing third-party "notice parties" to collect D&D and other costs. However, the FMC Enforcement Office is seeking $1.3 million in fines for 18 similar complaints. The remaining fines relate to so-called non-operating reefer containers (NORs) charged at reefer rates.

In other words, FMC's move is an attempt to "deterr" global common carriers by setting an example... However, as MSC chooses to be "harder", it is foreseeable that this may become another "international precedent."

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