Samsung Files FMC Complaint Alleging Unreasonable Practices by SM Line

Samsung files FMC complaint against SM Line
Samsung alleges SM failed to complete inland deliveries resulting in "staggering" D&D charges (SM Line file photo)

Published Apr 24, 2023 12:54 PM by The Maritime Executive

For the second time in six months, the U.S. division of electronics and appliance company Samsung Electronics has filed a complaint with the U.S. Federal Maritime Commission alleging violations of the Shipping Act by one of its contracted carriers. Samsung Electronics America (SEA) is seeking a cease and desist order and reparations for injuries from SM Line following a similar case filed in October 2022 against Zim.

Notice in the latest case was served on Friday, April 21, with SEA in its complaint alleging “As a result of SM Line’s unreasonable practices, SEA has been forced to pay excessive and unlawful charges incurred by SM Line and has been forced to undertake and perform the ocean carrier’s inland transportation responsibilities in order to continue to import its products sold to American consumers.” 

Samsung does not specify an amount for the detention and demurrage charges it has incurred only writing in the complaint that the amount is “staggering.” SEA says that it has sustained serious and substantial injuries and monetary damages, including paying erroneous D&D charges. Since 2020, they estimate that the company has incurred in excess of 4,500 individual demurrage-type charges and in excess of 10,000 detention-type charges.

Calling itself “Korea's representative ocean-going shipping company in the Americas,” SM Line promotes its focus on establishing a comprehensive logistics transportation network worldwide to create added value in logistics services. SEA says it has relied on SM Line for “store door transportation” to get its products from South Korea to inland locations in the United States for retailers. Starting in late-2020 to mid-2021, they contend that SM Line has failed to perform its obligations for transport to inland destinations.

The manufacturer alleges that it has SM Line has forced them to pay D&D charges and because of the inability to complete inland deliveries, Samsung has been required to arrange for inland trucking and pay SM Line’s inland terminal charges without reimbursement. 

When the shipper protested the charges and sought refunds, they say the SM Line “proffered various excuses,” ranging from chassis shortages to trucker shortages, inclement weather, and port and terminal congestion, which Samsung says are not in its control and not its responsibility under the store door terms. They allege that their containers were not mounted on chassis upon arrival arriving at inland terminals, were mismounted, grounded, or not available for pick up. They also contend that invoices lacked adequate information to determine the basis for the charges.

Samsung in its complaint highlights the broader nature of the D&D complaints against carriers. “SEA is apparently not alone in facing this exploitative behavior,” the filing states. They cite President Biden’s statements and the actions by Daniel Maffei, chairman of the FMC, and the FMC’s statements and actions on D&D charges.

The case is very similar to the previous filing against Zim by Samsung that also charged D&D violations and a failure on the store door deliveries. That case was scheduled to complete document production last week and discovery by mid-June. Filings in the Zim case will be completed between July and September with a decision expected shortly after that from the FMC’s administrative law judge.