FMC investigates Wan Hai shipping line for container detention fees

The US Federal Maritime Commission (FMC) has announced that Wan Hai is under investigation for possible violations of regulations on charges related to the return of containers.

Containers of Wan Hai shipping line

Containers of Wan Hai shipping line (Photo: Alfa)

The US Federal Maritime Commission (FMC) has announced that the Wan Hai container shipping company - based in Taipei - is under investigation for possible violations of regulation 46 U.S.C. § 41102(c) for charges related to the return of the container.

FMC announced that during spring 2021, Wan Hai charged "unreasonable" container detention fees at least 21 times. These fees range from US$125 to US$1,550 per container.

The Commission notes that the detention (sometimes called “per diem”) is a charge applied for use of the container once it
leaves the port past free time, which is the time a carrier must allow for the shipper to have a “reasonable opportunity to retrieve its cargo.”

According to the commission, the purpose of this charge is twofold: to compensate the VOCC for the use of its equipment (the container); and to incentivize its prompt return to port.

"However, due to the referenced congestion, on some days there are no return locations offered by the VOCC, or the locations offered by the VOCC have no available appointments with the terminal operator, or the terminal operator is not accepting containers on a particular chassis. In this scenario, the trucker cannot return the container," FMC said.

According to FMC, in these cases, the incentive to return the container is not enhanced by detention charges. In addition, there is no alternative value of the container for the VOCC due to the congestion because the VOCC is unable to handle the volume of empty containers it already has within the terminal.

"If the charges no longer relate to the intended purpose, they may amount to an unreasonable practice under these conditions," the FMC points out. And, "Upon information and belief, during the spring of 2021, Wan Hai charged detention under the afore described circumstances at least 21 times."

FMC added, "for multiple free days, and/or multiple days under detention, Wan Hai either offered no return locations, the designated terminal was not accepting the containers’ chassis, or appointments were unavailable for the subject containers".

"Upon information and belief, the invoiced party provided Wan Hai with screenshots verifying these restrictions and requested a waiver"

The Asian shipping line rejected the request for a fee waiver, saying it was "unable to waive the charges because it did not control the appointment system," according to FMC.

Wan Hai must file a response with FMC within 25 days "after being served with the Order of Investigation and Hearing as per 46 C.F.R. § 502.63(c)". The proceedings will then determine whether civil penalties should be assessed and, if so, in what amount, and whether a cease-and-desist order should be issued against the Taipei-based container shipping company.

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Source: Phaata.com (According to FMC / Containernews)
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