Report Those Taking Advantage of Hanjin Collapse to FMC

 In FMC, International Shipping

FMC Hanjin Collapse

FMC Hanjin Collapse Hanjin Ship pic: Flickr User Ingrid Taylor

The collapse of Hanjin Shipping, international shipping’s 7th largest carrier by volume, is causing disruption, increased freight rates, and perhaps an opportunity for some to illegally take advantage of shippers.

Don’t you wish you had someone looking out for you, shippers? Well, of course, you do have an agency responsible for protecting you against predatory practices in the international shipping industry. There’s the Federal Maritime Commission (FMC).

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.

Hanjin’s bankruptcy is a legal matter the FMC cannot actually get involved with; however, the agency is carefully monitoring the situation to make sure marine terminal operators, NVOCCs, freight forwarders, and other shipping lines are not taking advantage of shippers.

Shippers should help in this endeavor.

There are increases in freight rates as well as new fees and cargo disruptions hitting shippers as a result of Hanjin Shipping’s collapse; however, unreasonable increases in cost or decreases in services need to be reported to the FMC.

The FMC wants to hear from shippers as quickly as possible if they think a business or entity in the international shipping industry is taking advantage of the situation and breaking the Shipping Act of 1984.

There are two press releases the FMC put out on the subject of Hanjin’s collapse that encourages shippers to report “improper behavior” (as well as how to do so).

The contents of the press releases are below.

Press Release #1 – SEP 02, 2016
FMC Establishes Protocol for all Public Communications Related to Hanjin Shipping Disruptions:

Contact: John K. DeCrosta, 202-523-5911

The Federal Maritime Commission is aware that Hanjin Shipping has advised its customers that the company’s application to engage in a voluntary restructuring process was denied by its creditors. The Commission is also aware that Hanjin Shipping has disclosed it has filed for court receivership and that these two actions combined have caused uncertainty among the American shipping community about cargo in transit with Hanjin Shipping.

For U.S.-based shippers and cargo owners trying to determine what options they have, the Commission shares this initial guidance:

  • This is a non-United States legal matter at the moment. Hanjin Shipping is a company located in the Republic of Korea and has applied for receivership in that country.
  • This is a legal matter and as such, it is important that affected parties, including shippers, consult with their attorneys on what remedies are available to them.
  • The Commission will be vigilant in watching for, and quick to act on, any improper behavior by other carriers and regulated parties (such as marine terminal operators, non-vessel-operating-common-carriers, and freight forwarders) that would constitute violations of the Shipping Act.
  • The Federal Maritime Commission has no jurisdiction when it comes to resolving bankruptcy claims and does not intercede in legal actions between third parties that will be heard by the courts.
  • The Commission is concerned about the operational and competitive impacts of Hanjin Shipping’s status on the shipping industry broadly. Our staff will be closely monitoring for the foreseeable future for any developments that might impact shipping markets.

The Commission will issue further updates and guidance as circumstances and developments warrant.

Press Release #2 – SEP 01, 2016
Statement Regarding Status of Hanjin Shipping:

Contacts:

John K. DeCrosta, 202-523-5911 (Media & Legislative Branch)
CADRS, 1-866-448-9586 (Reporting Shipping Act Violations & Requests for Assistance)

The Federal Maritime Commission has established a protocol for communicating requests for assistance to the agency concerning developments related to the status of Hanjin Shipping.

Allegations of Shipping Act violations or requests for assistance related to retrieving or receiving cargo in transit should be communicated in writing via:

Email: complaints@fmc.gov

All correspondence should include “URGENT—HANJIN SHIPPING” in the subject line.

The Commission continues to monitor the operational and competitive impacts of this disruption and is particularly interested in learning of any conduct by any regulated entity that may violate the Shipping Act. Members of the shipping public are encouraged to share with the agency any specific allegations of illegal behavior.

When writing the Commission on this matter, the following information should be provided:

Name (If you are assisting someone else, also provide his/her name(s) and your relationship);
Company Name(s), if applicable;
Contact Information and/or Representative(s) (phone, fax, address including zip code, and email, if available)
Name of Person or Company with whom you are having the problem
Contact Information for that Company or Party, including Individual’s Name(s)
Your request should also include:

A full description of the matter (including a description of any attempts already made to resolve the problem);
Your desired solution;
All relevant documentation (e.g., contract, bill of lading, proof of payment, bookings, Order for Service, invoice for the services, emails about the issue, dock receipts, arrival notices, invoices, terminal appointments, terminal operating hours/stoppages, etc.);
A description of the cargo;
The ports of origin and destination (including terminal, railramp, etc.); and
The date of shipment or sailing.
Emails will be referred to the appropriate office with the Federal Maritime Commission for review and assessment of any potential agency action.

The Commission will issue further updates and guidance as circumstances develop and warrant.

The Federal Maritime Commission is responsible for regulating the Nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The Commission’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.

Please do report unreasonable and illegal practices to the FMC.

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Showing 3 comments
  • Gary Ferrulli
    Reply

    Illegal and unreasonable practices – simple and straight forward? far from it. Small issues like “I want my containers, what will it cost?”
    comes down to facts like, where in the stacks of containers on the terminal are they? how many moves to free them up for movement? if
    on the vessel, which hatch? which cell? how many moves to reach it or them? One large BCO two days ago paid $11,000. to get 11 containers
    out of a terminal; happy to do it? not really, but when confronted with the facts of where the containers were, what it would take to move
    other boxes twice to get at them, understood. The problem is that the carriers have priced their services so far below costs that when
    a charge relates to costs, customers are shocked. Ask those who deal with the four big railroads in the US what it’s like to deal with so few
    who do have profit as a motive for being in business, get your head wrapped around that as in about 5 years ocean shipping will be similar.
    Not 4 carriers, but 10, all of whom will have survived the foolishness of the past 5+ years.

    • Raymond Rau
      Reply

      Supply and demand Gary, we all must obey the law!

  • Jared Vineyard
    Reply

    Good points, Gary. This is no simple issue. There are going to be some heavy costs to pay. But that doesn’t mean people who think they are being scammed in the middle of this situation should just ignore it. That’s why the FMC is there to look into situations.

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Hanjin Container Ship Photo by: Flickr user Ingrid Taylarcarriers create money sucking whirlpool