According to Charlie Bartlett from the Loadstar, Hamburg Sud, owned by the Danish shipping line giant Maerks faces scrutiny over blank sailings. Capacity management by shipping lines as means to prevent fright collapse at stake.
US Federal Maritime Commission (FMC) is set to revise the Ocean Shipping Reform Act (OSRA) 22 to provide a clearer definition of “refusal to deal” following a recent penalty imposed on Hamburg Süd, a Maersk-owned operator. The FMC found Hamburg Süd guilty of violating provision 41104(a)(10) of the Shipping Act by retaliating against furniture importer OJ Commerce for taking legal action against the carrier. Evidence obtained from an email exchange between Hamburg Süd employees revealed that the company decided to disengage from its contractual obligations with OJC due to potential litigation. The commission ruled that the violation was so severe and intentional that it doubled the financial damages awarded to OJC, amounting to $4.9 million.
As a result of this case, the FMC is reviewing the language of provision 41104(a)(10) and has issued a Supplemental Notice of Proposed Rulemaking. Concerns have been raised by organizations like FIATA, who believe that shipping lines could exploit capacity management measures to exclude specific customers. The FMC acknowledged these concerns and stated that changes would be made to the definition of transport factors to address the issue. However, some industry consultants worry that FMC intervention in carrier capacity management could hinder carriers’ ability to prevent rate collapses during periods of weak demand.
The proposed revisions to OSRA 22 aim to provide a clearer understanding of “refusal to deal” and prevent carriers from strategically manipulating capacity to avoid negotiations or exclude certain customers. The FMC’s actions are in response to Hamburg Süd’s violation and the need to establish fair practices in the shipping industry.
Source: The LoadStar
