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MSC Potentially Faces $63M Fine for Violating the Shipping Act

The largest ocean carrier in the world, Mediterranean Shipping Company (MSC), has been accused by the Federal Maritime Commission (FMC) of engaging in numerous violations of the Shipping Act.

Since the Covid era, the FMC has received excessive complaints about the carrier’s malpractices. The FMC is now accusing MSC of using the pandemic and supply chain crisis as a perfect opportunity to commit these unlawful acts.

The complaints from shippers continued over the past few years, eventually encouraging the FMC to launch an investigation in August 2023.

According to the FMC docket, the accusations are quoted as below:

  • Billing third parties (whom are not the consignees and are not in the initial agreement) without consent and enforcing them to make these payments.
  • Billing reefer fees for non-reefer containers so that customers are overcharged; reefer containers are given less free time than NOR containers therefore this resulted in more demurrage fees when customers failed to pick up their containers on time.
  • Publishing their NOR rates in tariff a year late, as a means to overcharge their customers.

Due to engaging in multiple violations of the Shipping Act, MSC currently faces a potential $63 million civil penalty.

The Shipping Act’s ultimate goal is to regulate and protect the rights of all in the shipping industry, and this issue should be a learning lesson for carriers to comply.

The final question is, is MSC the only carrier guilty of using the pandemic as a chance to overcharge and exploit their customers, or will we be seeing more ocean carriers investigated as well?

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