Another Half Million Dollar Penalty for Ocean Container and RoRo Carriers and Freight Forwarders

US – The Federal Maritime Commission (FMC) has recovered a total of $520,000 in civil penalties after completing several compromise agreements with various ocean freight companies. The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives from around the country and the parties involved, namely four ocean transportation intermediaries (both non-vessel-operating common carriers (NVOCCs) and freight forwarders) and one other NVOCC. As so often happens with these cases the parties settled and agreed to penalties, but did not admit to violations of the Shipping Act or Commission regulations. FMC Chairman Mario Cordero said:

"The agreements and penalties announced today demonstrate the continued hard work and vigilance of the Commission’s Area Representatives and Bureau of Enforcement to protect the shipping public from fraud and unfair practices. Our objectives are to ensure fair trade and compliance by all segments of the maritime industry, vessel operators and OTIs alike."

The compromise agreements reached are as follows:

Volkswagen Konzernlogistiks (VWKL) –a vessel-operating common carrier providing RoRo services, based in Wolfsburg, Germany. VWKL voluntarily disclosed that, over an extended time period, it operated pursuant to unfiled space charters with other operators of RoRo vessels, or pursuant to agreement amendments which were filed with the Commission but not yet fully effective under the Shipping Act. In light of the voluntary nature of the disclosure, VWKL paid $170,000 in penalties.

Orient Star Transport International – a foreign-based registered non-vessel-operating common carrier (NVOCC) based in Taipei, Taiwan. Commission staff alleged that the company obtained ocean transportation for property at less than the rates and charges otherwise applicable through the unfair device or means of utilising rates limited to certain ‘named accounts’ in UASC service contracts; and by providing transportation to its customers at rates not in accordance with Orient Star’s NVOCC tariff. Orient Star made a payment of $135,000 in compromise of these allegations, and agreed to cooperate with the ongoing investigation

Ba-Shi Yuexin Logistics Development – a licensed and bonded NVOCC based in Alhambra, California. It was alleged that the company obtained ocean transportation for property at less than the rates and charges otherwise applicable through the unfair device or means of utilising rates limited to certain ‘named accounts’ in its service contract with NYK Line; and by providing transportation to its customers at rates not in accordance with its NVOCC tariff. Under the terms of the compromise, Ba-Shi paid $100,000 in penalties.

Thornley & Pitt – a licensed NVOCC and freight forwarder located in Millbrae, California. Commission staff alleged that Thornley & Pitt knowingly and wilfully obtained transportation at less than applicable rates by means of improperly obtaining access to service contracts to which the company was not the contract signatory. Under the terms of the compromise, Thornley & Pitt made a payment of $65,000.

Razor Enterprise d/b/a Razor Cargo Services – a licensed NVOCC and freight forwarder with offices in Jamaica, New York. It was alleged that Razor Cargo Services knowingly and wilfully obtained transportation at less than applicable rates by means of improperly obtaining access to service contracts to which Razor was not the contract signatory. The company made a payment of $50,000 in compromise of these allegations.