FMC JUDGE CALLS FOR SETTLEMENT ON TRANSPACIFIC MALPRACTICES CASE
Frederick M. Dolan, Jr., administrative law judge at the U.S. Federal Maritime Commission, has called for a settlement between representatives of the former Sea-Land Service and the agency concerning alleged malpractices in the transpacific westbound container trade between 1996 and 1998.
The FMC alleged that Sea-Land allowed non-vessel-operating common carriers to load containers with cargo beyond the weight and measurement capacity specified under the Transpacific Westbound Rate Agreement’s applicable tariff rules. The practice allegedly involved allowing NVOCCs to obtain lower freight rates applicable to 20-foot containers when shipping 40-foot boxes. The FMC also alleged that “Sea-Land made payment of freight forwarder compensation on many of these same NVO shipments, with such payments made by Sea-Land to ITL Shipping and other forwarders.”
The FMC said that its bureau of enforcement “has sustained its burden of proof and shown, by a preponderance of the evidence, that respondent violated sections 10(b)(1), 10(b)(4), and 19(d)(4) of the Shipping Act of 1984.”
Sea-Land, now part of Maersk Sealand, was found to have violated section 10(b)(1) on 149 shipments in 1996-1998, by charging shippers less than the applicable rates or charges for their shipments.
“Sea-Land and the shipper, acting in concert, misused the applicable tariff equipment substitution provision,” the FMC said.
The administrative law judge directed the parties “to consider a suggested settlement of this lengthy investigation as well as any other pending matters.” The FMC expects penalties to be paid by Sea-Land.
Because the investigation has been running for more than four years, the administrative law judge also suggested to the parties recourse to a mediator.