Samsung Returns to FMC with Complaints Against OOCL and COSCO

 

The U.S. division of consumer electronic giant Samsung Electronics has returned to the Federal Maritime Commission for the third time filing additional complaints related to service failures from carriers and what it calls unreasonable and excessive charges. The latest filings made at the end of last week are against Orient Overseas Container Line (OOCL) and COSCO Shipping Lines. 

Detention and demurrage charges have long been a hotly contested issue between shippers and their carriers and became the focus of complaints and the FMC during the pandemic. Two years after the surge in container volumes the FMC continues to receive a large number of complaints. The commission also recently issued its ruling on D&D Fees as part of the 2022 reforms to the Ocean Shipping Act.

Samsung is already involved in two cases with the FMC on these issues. In October 2022, they filed a complaint against Zim and followed it with a complaint in April 2023 against SM Line. In each case, the issue related to the ”store door” delivery service ordered by Samsung from the carriers and the D&D fees they were being charged by the carriers. Both of the prior complaints are still in process with the FMC with the Zim complaint currently expected to have its final ruling by the end of this year while the SM Line complaint is still in discovery and hearings.

Carriers offer “store door” as an added service for the shipper. The programs make the carriers responsible for arranging and paying for inland movements. They also include the removal of containers from U.S. marine and intermodal terminals with the program providing for the delivery of containers to the designated inland locations.

In the new complaints, Samsung alleges that it has paid over 4,400 erroneous demurrage, detention, and associated charges from OOCL. They report since approximately 2021 OOCL has repeatedly billed them for the charges and increased the costs. Samsung alleges it is a failure to properly perform the inland transportation of the contracts.

The parallel complaint against COSCO alleges many of the same issues in “store door” services. Since 2020, they content Samsung has been presented with in excess of 5,000 individual demurrage charges and over 17,000 individual detention-type charges from COSCO.

The complaint alleges that carriers failed to take necessary steps to move the cargo from the yards and deliver the containers. They said this was despite the issues that emerged during the pandemic being well-known conditions to the carriers. OOCL’s actions for example they allege resulted in Samsung having to pay for rail storage charges when delays occurred for which OOCL was responsible under the contracts.

At times, they contend the carriers have also refused to release containers due to alleged outstanding fees. Samsung reports it had to step in at times to make arrangements to move the containers despite them being covered by the store door agreements. They also list issues including alleged retaliation, refusal to deal, and invoicing without information. Under the reform act, they cite unreasonable charges, asking the FMC to rule.

Samsung has been in contact with each of the carriers and reports that they were not able to resolve the claims. They do not report the amounts of the claims saying that they are still being calculated.  As with the other complaints, this begins a long process where the carriers will respond and the FMC will conduct a fact finding before issuing a ruling.