The U.S Federal Maritime Commission is looking at Wan Hai due to its refusal to waive detention fees
After several repeated warnings over unfair fees and announcing investigations into the Demurrage & Detention charges from the large shipping lines, on Dec 30, the United States Federal Maritime Commission (FMC) filed an order to conduct an investigation into the practices of Wan Hai, a Taiwanese-based carrier. Since the early import surge in the US which led to serious port congestion, the FMC has been targeting the D&D fees after receiving many repeated complaints from shippers of excessive charges from several shipping lines.
The order filed by the FMC states, “The Commission has decided that an adjudicatory proceeding is required to determine whether Wan Hai is in violation,” of regulations related to the Wanhai’s practice of accessing detention fees. The Commission will be investigating to decide whether Wan Hai failed to follow the regulations and if it was unfairly charging shippers D&D fees regardless of the FMC’s repeated warnings to the overall shipping industry about fee practices.
Wan Hai gets involved in an investigation carried by the FMC (Wan Hai website)
Wan Hai has 25 days to answer to the FMC. After that, under the process, the Commission will determine whether civil penalties are appropriate. Also, the FMC can require Wanhai to apply specific changes in its business operations.
According to the information published by the FMC about this investigation during the first quarter of 2021, Wan Hai charged DET fees at least 21 times with the debit notes which ranged between USD125- USD 1,550 per container. The specific complaints were sent by a shipper directly to the Commision. They will be carrying out whether the shipping line either offered no return location, or the designated terminal was not accepting the container’s chassis, or appointments were unavailable in the specified timeframe.
The Commission reveals that the unnamed shipper protested the D&D fees on these specific containers. He provided Wan Hai “screenshots verifying these restrictions and requested a waiver.” Simultaneously, it was reported that Wan Hai denied the request in this case because it did not control the appointment system for the empty return.
Wan Hai is now ranked the 25th biggest shipping line for imports according to the United States Federal Maritime Commission. It handled over 176,000 import TEU and also carried over 46,000 export TEUs in the first 11 months of 2021 that made them the 18th biggest export carrier from the United States
It is not the first time a specific investigation has been launched while the United States Federal Maritime Commission has made repeated warnings and begun extensive investigations into the overall system related to D&D charges from the largest shipping lines. In Sep 2021, another shipper filed a complaint with the Commission, which alleged that CMA CGM and Los Angeles terminal operator Fenix had charged exorbitant fees for containers at the terminal. During the summer of 2021, a furniture company in Pennsylvania filed irregular charges at the FMC against MSC (Mediterranean Shipping Company S.A.) to allege unfair business practices and collusion with other shipping companies.
In the early of 2021, the United States Federal Maritime Commission ordered large carriers to submit specific information on their shipping policies and D&D tariffs, claiming that they were concerned it was contributing to the port bottlenecks in the US. The Commission determined that it was broadening its investigation into the charges and launching an audit program of the leading shipping lines while focusing on refunds for shippers. Shippers were also successful at incorporating language related to the use of D&D fees into the United States. Congress’ proposed legislation that would overhaul the FMC and oversight of carriers. The legislation passed the U.S. House of Representatives late in 2021 and is expected to be on the Senate’s agenda this year.
