MSC faces mammoth D&D case brought against it in the US

MSC faces mammoth D&D case brought against it in the US

August 15, 2023

America’s Federal Maritime Commission (FMC) has given Mediterranean Shipping Company (MSC) 25 days to answer multiple charges of detention and demurrage (D&D) amounting to two million US dollars.

The charges are said to date back to 2017 and entail thousands of claims against the line, which had been disputed by the Swiss-run carrier.

Once the FMC had received the necessary submissions from MSC, its investigations could continue throughout 2024.

The earliest date a ruling is expected on the matter is February 2025.

The FMC will also be investigating MSC’s billing procedures and potential violations of the US Shipping Act.

The D&D charges specifically pertain to daily rates for operating and non-operating reefers, in which instance MSC stands accused of charging the same rate, and allegation the line has refuted.

However, the FMC has stated that it has recorded 925 occasions where related D&D charges were disputed, resulting in refunds totalling $1.2 million.

The FMC claims that in 2021, MSC generated D&D revenue of $875 944 through cold-chain boxes, in and out of operation.

It reportedly has evidence of 1 704 such cases.

The FMC further argues that it has become the norm for MSC to charge the same daily rate for operating and non-operating reefers (NOR).

The Loadstar reports that the FMC filing against the line says: “The carrier failed to supply separate D&D charges for NORs for public inspection until March this year, with information gleaned from bills of lading supplied by MSC customers.

The British supply chain portal furthermore adds: “Last month, fruit juice importer Rahal International lodged a complaint against Hapag-Lloyd, claiming some $300,000 of D&D charges were unfair, seeking a $715,631 repayment.

“However, these amounts are dwarfed by the FMC order that Hamburg Süd must pay $9.8m to furniture shipper OJ Commerce after refusing it contracted cargo space, and Bed, Bath & Beyond is going after OOCL in a mega $38m claim.”

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