DECISIONS OF THE FEDERAL MARITIME COMMISSION

Second Series

VOLUME 5 

May 2022 – December 2022 issuance

FEDERAL MARITIME COMMISSION, OFFICE OF THE SECRETARY, 2023 
Federal Maritime Commission

Washington, D.C. 

June 29, 2023 

Daniel B. Maffei, Chairman

Rebecca F. Dye, Commissioner

Louis E. Sola, Commissioner

Carl W. Bentzel, Commissioner

Max M. Vekich, Commissioner

Office of Administrative Law Judges

Erin M. Wirth, Chief Administrative Law Judge

Linda S. Harris Crovella, Administrative Law Judge
The Federal Maritime Commission makes decisions in cases brought by parties who claim they have been

harmed because of a violation of the legal prohibitions in the Shipping Act of 1984, 46 U.S.C. Chapters 

401-413. The Commission can also determine to investigate a possible violation of the same law. In the

first instance, these claims are heard by an Administrative Law Judge who issues an Initial

Decision. That Initial Decision may become the final decision of the Commission 30 days later. However,

the Initial Decision can be appealed by the parties to the proceedings, or any Commissioner can ask to

review the Initial Decision. In either case, the Commission would then review the Initial Decision and

issue a Final Decision in the case. This publication provides a compendium of Initial and Final Decisions

in these matters and selected other Orders that may be significant or establish a new legal precedent.
TABLE OF CASES REPORTED BY DOCKET NUMBER

This PDF file contains bookmarks. You can use the bookmark/table of contents feature 

to navigate throughout this file in your PDF viewer.

Please consult the FMC’s activity logs located at 

https://www2.fmc.gov/readingroom/ProceedingSearch for the most current status of 

any proceeding. 

FACT FINDINGS

FF-29 International Ocean Transportation Supply Chain Engagement ................. 41

∗ Final Report, May 31, 2022 ............................................................................. 41 

∗ Order Discontinuing Proceeding, June 9, 2022 ......................................... 107 

INFORMAL DOCKETS

1966(I) TCW, Inc. v. Evergreen Shipping Agency (Am.) Corp., & Evergreen Line 

Joint Service Agreement .............................................................................................. 192

∗ Order Affirming Initial Decision, December 29, 2022 .............................. 192 

FORMAL DOCKETS

16-16 MAVL Capital Inc., Et Al. v. Marine Transport Logistics, Inc. Et Al. ......... 109 

∗ Order Affirming Initial Decision on Remand, June 10, 2022 .................. 109 

19-03 Muhammad Rana v. Michelle Franklin, d.b.a “The Right Move,” Inc. .......... 7 

∗ Order Affirming Initial Decision, May 25, 2022 ............................................ 7

20-12 - Nnabugwu Chinedu Andrew, Avers Logistics Ltd., and CJ Deluz Nigeria

Ltd. v. Marine Transport Logistics, Inc., Alla Solovyeva, and Raya Bakhirev .... 149 

∗ Order Affirming Initial Decision, September 22, 2022 ............................. 149

21-02 - YSN Imports Inc. d/b/a Flame King v. Feige "Peggy" Oberlander, U

Shippers Group Inc., U Shippers Group Management Co., Inc. ............................... 5 

∗ Notice Not to Review, May 12, 2022 ............................................................... 5

21-10 - Orange Avenue Express, Inc. v. Hapag Lloyd AG ..................................... 156

∗ Initial Decision Approving Settlement Agreement, October 3, 2022 ..... 156 

∗ Notice Not to Review, November 3, 2022 .................................................. 170 

21-11 - OJ Commerce, LLC v. Hamburg Südamerikanische DampfschifffahrtsGesellschaft A/S & Co KG and Hamburg Sud North America, Inc. ..................... 159

∗ Notice Not to Review, October 6, 2022 ...................................................... 159 
21-17 - Ocean Network Express (North America), Inc. and Ocean Network

Express, Pte., Ltd. - Possible Violations of 46 U.S.C. § 41102(c) ............................. 124

∗ Initial Decision Approving Settlement Agreement, June 28, 2022 ......... 124 

∗ Order Reversing the Initial Decision and Remanding, October 27, 2022 .... 

 .......................................................................................................................... 163 

∗ Initial Decision Approving Remand Settlement Agreement, 

December 13, 2022 ......................................................................................... 182 

22-01 - CCMA, LLC v. Maersk A/S and Ports America Chesapeake, LLC .............. 6

∗ Notice Not to Review, May 16, 2022 ............................................................... 6 

22-03 - One Banana North America Corp. v. Hapag-Lloyd AG and Hapag-Lloyd

(America) LLC ............................................................................................................... 174

∗ Initial Decision Approving Settlement Agreement, November 16, 2022 

 .......................................................................................................................... 174 

∗ Notice Not to Review, December 20, 2022 ................................................. 190 

22-05 - Foreign Tires Sales, Inc. v. Evergreen Shipping Agency (America)

Corporation, as Agent for Evergreen Line, Evergreen Group d/b/a Evergreen

Line ..................................................................................................................................... 1

∗ Initial Decision Approving Settlement Agreement, May 3, 2022 ............... 1 

∗ Notice Not to Review, June 6, 2022 ............................................................. 106

22-07 - ACME Freight Services Corp. v. Total Terminals International ............... 171

∗ Initial Decision Approving Settlement Agreement, November 9, 2022 ...... 

 .......................................................................................................................... 171 

∗ Notice Not to Review, December 12, 2022 ................................................. 181

22-08 - Achim Importing Company Inc. v. Yang Ming Marine Transport

Corporation ................................................................................................................... 141 

∗ Initial Decision Approving Settlement Agreement, August 22, 2022 .... 141 

∗ Notice Not to Review, September 23, 2022 ................................................ 154 

22-09 - Fulter Logistics LLC, Revocation of Ocean Transportation Intermediary

License No. 027912NF .................................................................................................. 128

∗ Initial Decision Revoking Ocean Transportation License, July 26, 2022 

 .......................................................................................................................... 128 

∗ Notice Not to Review, August 26, 2022 ..................................................... 147 
22-10 - C.V. Int'l Services LLC, Intent to Deny an Ocean Transportation

Intermediary Application ............................................................................................ 135

∗ Initial Decision Denying Ocean Transportation Intermediary License, 

July 26, 2022 .................................................................................................... 135 

∗ Notice Not to Review, August 26, 2022 ...................................................... 148 

22-11 - Aeneas Exporting LLC v. HoneyBee International Inc., and All America

Shipping ......................................................................................................................... 177

∗ Initial Decision Approving Settlement Agreement, November 16, 2022 

 .......................................................................................................................... 177 

∗ Notice Not to Review, December 20, 2022 ................................................. 191 

22-13 - International Express Trucking, Inc. v. Zim Integrated Shipping Ltd. ... 160

∗ Initial Decision Approving Settlement Agreement, October 20, 2022 ... 160 

∗ Notice Not to Review, November 22, 2022 ................................................ 180 

22-15 - Pro Transport Charleston, Inc. v. Allround Midwest Forwarding, Inc.

 ......................................................................................................................................... 144

∗ Initial Decision Approving Dismissal Agreement, August 22, 2022 ..... 144 

∗ Notice Not to Review, September 23, 2022 ................................................ 155 
TABLE OF CASES REPORTED ARRANGED ALPHABETICALLY

This PDF file contains bookmarks. You can use the bookmark/table of contents feature 

to navigate throughout this file in your PDF viewer.

Please consult the FMC’s activity logs located at 

https://www2.fmc.gov/readingroom/ProceedingSearch for the most current status of 

any proceeding.

Achim Importing Company Inc. v. Yang Ming Marine Transport Corporation, 

Docket No. 22-08 ........................................................................................................... 141 

∗ Initial Decision Approving Settlement Agreement, August 22, 2022 .... 141 

∗ Notice Not to Review, September 23, 2022 ................................................ 154 

ACME Freight Services Corp. v. Total Terminals International, 

Docket No. 22-07 ........................................................................................................... 171

∗ Initial Decision Approving Settlement Agreement, November 9, 2022 ...... 

 .......................................................................................................................... 171 

∗ Notice Not to Review, December 12, 2022 ................................................. 181

Aeneas Exporting LLC v. HoneyBee International Inc., and All America Shipping, 

Docket No. 22-11 ........................................................................................................... 177

∗ Initial Decision Approving Settlement Agreement, November 16, 2022 

 .......................................................................................................................... 177 

∗ Notice Not to Review, December 20, 2022 ................................................. 191 

CCMA, LLC v. Maersk A/S and Ports America Chesapeake, LLC, 

Docket No. 22-01 ............................................................................................................... 6

∗ Notice Not to Review, May 16, 2022 ............................................................... 6 

C.V. Int'l Services LLC, Intent to Deny an Ocean Transportation Intermediary

Application, Docket No. 22-10 .................................................................................... 135

∗ Initial Decision Denying Ocean Transportation Intermediary License, 

July 26, 2022 .................................................................................................... 135 

∗ Notice Not to Review, August 26, 2022 ...................................................... 148 

Foreign Tires Sales, Inc. v. Evergreen Shipping Agency (America) Corporation,

as Agent for Evergreen Line, Evergreen Group d/b/a Evergreen Line, Docket No. 

22-05 .................................................................................................................................... 1

∗ Initial Decision Approving Settlement Agreement, May 3, 2022 ............... 1 
∗ Notice Not to Review, June 6, 2022 ............................................................. 106

Fulter Logistics LLC, Revocation of Ocean Transportation Intermediary License 

No. 027912NF, Docket No. 22-09 ................................................................................ 128

∗ Initial Decision Revoking Ocean Transportation License, July 26, 2022 

 .......................................................................................................................... 128 

∗ Notice Not to Review, August 26, 2022 ..................................................... 147 

International Express Trucking, Inc. v. Zim Integrated Shipping Ltd., 

Docket No. 22-13 .......................................................................................................... 160

∗ Initial Decision Approving Settlement Agreement, October 20, 2022 ... 160 

∗ Notice Not to Review, November 22, 2022 ................................................ 180 

International Ocean Transportation Supply Chain Engagement, 

Fact Finding Investigation FF-29 .................................................................................. 41

∗ Final Report, May 31, 2022 ............................................................................. 41 

∗ Order Discontinuing Proceeding, June 9, 2022 ......................................... 107 

MAVL Capital Inc., Et Al. v. Marine Transport Logistics, Inc. Et Al., Docket No. 

16-16 ................................................................................................................................ 109

∗ Order Affirming Initial Decision on Remand, June 10, 2022 .................. 109 

Muhammad Rana v. Michelle Franklin, d.b.a “The Right Move,” Inc., 

Docket No. 19-03 ............................................................................................................... 7 

∗ Order Affirming Initial Decision, May 25, 2022 ............................................ 7

Nnabugwu Chinedu Andrew, Avers Logistics Ltd., and CJ Deluz Nigeria Ltd. v. 

Marine Transport Logistics, Inc., Alla Solovyeva, and Raya Bakhirev, 

Docket No. 20-12 ........................................................................................................... 149 

∗ Order Affirming Initial Decision, September 22, 2022 ............................. 149

Ocean Network Express (North America), Inc. and Ocean Network Express, Pte., 

Ltd. - Possible Violations of 46 U.S.C. § 41102(c), Docket No. 21-17 ..................... 124 

∗ Initial Decision Approving Settlement Agreement, June 28, 2022 ......... 124 

∗ Order Reversing the Initial Decision and Remanding, October 27, 2022 .... 

 .......................................................................................................................... 163 

∗ Initial Decision Approving Remand Settlement Agreement, 

December 13, 2022 ......................................................................................... 182 
OJ Commerce, LLC v. Hamburg Südamerikanische DampfschifffahrtsGesellschaft A/S & Co KG and Hamburg Sud North America, Inc., Docket No.

21-11 ................................................................................................................................ 159 

∗ Notice Not to Review, October 6, 2022 ...................................................... 159 

One Banana North America Corp. v. Hapag-Lloyd AG and Hapag-Lloyd 

(America) LLC, Docket No. 22-03 .............................................................................. 174

∗ Initial Decision Approving Settlement Agreement, November 16, 2022 .... 

 .......................................................................................................................... 174 

∗ Notice Not to Review, December 20, 2022 ................................................. 180 

Orange Avenue Express, Inc. v. Hapag Lloyd AG, Docket No. 21-10 .................. 156

∗ Initial Decision Approving Settlement Agreement, October 3, 2022 ..... 156 

∗ Notice Not to Review, November 3, 2022 .................................................. 170 

Pro Transport Charleston, Inc. v. Allround Midwest Forwarding, Inc., 

Docket No. 22-15 ........................................................................................................... 144

∗ Initial Decision Approving Dismissal Agreement, August 22, 2022 ..... 144 

∗ Notice Not to Review, September 23, 2022 ................................................ 155 

TCW, Inc. v. Evergreen Shipping Agency (Am.) Corp., & Evergreen Line Joint 

Service Agreement, Informal Docket No. 1966(I) .................................................... 192

∗ Order Affirming Initial Decision, December 29, 2022 .............................. 192 

YSN Imports Inc. d/b/a Flame King v. Feige "Peggy" Oberlander, U Shippers 

Group Inc., U Shippers Group Management Co., Inc., Docket No. 21-02 ................ 5 

∗ Notice Not to Review, May 12, 2022 ............................................................... 5
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

FOREIGN TIRE SALES INC., Complainant

v.

EVERGREEN SHIPPING AGENCY (AMERICA) CORPORATION,

AS AGENT FOR EVERGREEN LINE, EVERGREEN GROUP D/B/A/

EVERGREEN LINE, Respondent. 

DOCKET NO. 22-05 

Served: May 3, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING SETTLEMENT AGREEMENT

On April 26, 2022, Complainant Foreign Tire Sales Inc., and Respondent Evergreen 

Shipping Agency (America) Corporation, as agent for Evergreen Line, Evergreen Group d/b/a 

Evergreen Line Inc. filed a petition (“Motion”) seeking approval of a settlement agreement, 

voluntary dismissal of the complaint with prejudice, confidential treatment of the settlement 

agreement, and, if denied, to extend the time for Respondent to answer the complaint. A copy of 

the confidential settlement agreement was attached to the motion. The parties acknowledge that 

the confidential settlement, if approved, “would fully and finally dispose of all issues and 

disputes that are the subject of this Action.” Motion at 3. Additionally, Complainant 

acknowledges that “there will be no necessity to file an answer if Complainant’s Motion to 

Dismiss with Prejudice is granted, nor will there be any need for any further proceedings in this 

matter.” Motion at 8. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

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5 F.M.C.2d
The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might 

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties state that in reaching the confidential settlement, “the Parties each had the

benefit of advice from counsel” and the settlement is the result of “negotiations between the 

parties that have been ongoing since the complaint was filed.” Motion at 5-6. The parties state

that the settlement is free of fraud or duress, that each party “is acting in its own self-interest,” 

and “neither party has been subject to pressure or duress from the other Party.” Motion at 5. 

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5 F.M.C.2d
Furthermore, the Parties have good cause to settle because “the Parties will incur 

substantial costs and expenses of litigation including attorneys’ fees if the case goes forward” 

because “any Final Decision by the ALJ can be appealed to the Commission,” the “losing Party 

risks being held liable for the opposing Party’s attorneys’ fees which stand to be substantial,” and 

because the confidential settlement “involves no admissions of liability on behalf of either 

party.” Motion at 6. 

Lastly, the settlement does not contravene law or public policy, has no adverse effect on 

any third parties or the market for transportation services, and does not run afoul of any 

provision of the Shipping Act. Motion at 7. Rather, “the terms and conditions of the Confidential 

Settlement are facially reasonable,” and it “reflects the fair and considered judgment of the 

relative strengths of their respective positions, the desire to avoid expensive litigation costs and 

to avoid the risks inherent in litigation.” Motion at 7. 

Based on the representations in the motion and other documents filed in this matter, the 

parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions. The proceeding would require 

potentially expensive briefing. The parties have determined that the settlement reasonably 

resolves the issues raised in the complaint without the need for costly and uncertain litigation. 

Accordingly, the settlement agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The full text of the settlement agreement has been reviewed by the undersigned and is 

available to the Commission. Given the parties’ request for confidentiality, confidential 

information included in the settlement agreement, and the Commission’s history of permitting 

agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files. 

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between Complainant 

Foreign Tire Sales Inc., and Respondent Evergreen Shipping Agency (America) Corporation, as 

agent for Evergreen Line, Evergreen Group d/b/a Evergreen Line be GRANTED. It is 

FURTHER ORDERED that the Motion to Extend Time to Answer be DENIED AS 

MOOT. It is 

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5 F.M.C.2d
FURTHER ORDERED that the request for confidential treatment be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

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5 F.M.C.2d
FEDERAL MARITIME COMMISSION

YSN IMPORTS INC. D/B/A/ FLAME KING, 

Complainant 

v. 

FEIGE “PEGGY” OBERLANDER, U SHIPPERS GROUP 

INC., U SHIPPERS GROUP MANAGEMENT CO., INC., 

Respondent

DOCKET NO. 21-02 

Served: May 12, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s April 11, 2022, Initial Decision Approving Settlement Agreement 

and Dismissing Proceeding with Prejudice has expired. Accordingly, the decision has become 

administratively final.

William Cody

Secretary

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5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

CCMA, LLC, Complainant 

v. 

MAERSK A/S AND PORTS AMERICA CHESAPEAKE, LLC, 

Respondent 

DOCKET NO. 22-01 

Served: May 16, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s April 13, 2022, Initial Decision Approving Settlement Agreement 

has expired. Accordingly, the decision has become administratively final. 

William Cody 

Secretary 

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5 F.M.C.2d
FEDERAL MARITME COMMISSION 

 

 

MUHAMMAD RANA, 

 Complainant,

 v. 

MICHELLE FRANKLIN, D.B.A. “THE

RIGHT MOVE,” INC., 

 Respondents. 

 

 Docket No. 19-03 

 

Served: May 25, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Louis E. SOLA, Carl W. BENTZEL, Max M. 

VEKICH, Commissioners. Chairman MAFFEI filed a concurring 

opinion in which Commissioners BENTZEL and VEKICH join. 

Order Affirming Initial Decision 

Complainant Muhammad Rana is a shipper seeking 

reparations under 46 U.S.C. § 41102(a) for ocean freight charges 

and other expenses he incurred to release a hold on his shipment 

after the non-vessel operating common carrier (NVOCC) he hired 

to move his household goods failed to pay the ocean freight charges. 

Complainant hired and prepaid Respondent Michelle Franklin, 

D.B.A. “The Right Move” Inc. (Right Move) but his shipment was

held at the destination port because Right Move failed to pay the

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5 F.M.C.2d
 

ocean transportation charges. Right Move then made 

misrepresentations and illusory promises to induce Complainant to 

pay the charges himself. Right Move ceased operating shortly after 

accepting Complainant’s booking, and the Commission later 

revoked its NVOCC license for failure to maintain a surety bond. 

The Administrative Law Judge (ALJ) determined that Right 

Move knowingly and willfully obtained ocean transportation at less 

than applicable rates using unjust or unfair means in violation of § 

41102(a) and awarded reparations. The ALJ also imposed discovery 

sanctions and inferred that the responses Right Move refused to 

provide would have been averse to its position. Finally, relying on 

inferences drawn from Respondent’s refusal to answer discovery 

and other evidence, the ALJ found Ms. Franklin personally liable 

for the reparations awarded. 

 

For the reasons set forth below, the Commission affirms the 

ALJ’s decision in its entirety and awards Complainant reparations 

of $7,472.40 plus interest of $176.57, totaling $7,648.97. 

 

I. BACKGROUND

A. Factual Background

 

 

 

 

 

 

 

 

 

Complainant hired Respondent in early February 2019 to 

transport his household goods from Alexandria, Virginia to Port 

Qasim in Karachi, Pakistan. Initial Decision (I.D.), 5.1 Right Move 

was a licensed NVOCC at the time (No. 023229N), and Ms. 

Franklin was Right Move’s sole owner and its only employee. On 

February 29, 2019, Ms. Franklin decided to close the company 

because it was insolvent. Id. at 5, 15. The Commission revoked 

Right Move’s NVOCC license on July 4, 2019 because its surety 

bond had lapsed.2 Id. 

1

The Commission adopts the ALJ’s findings of fact (I.D., 5-16), which are the 

basis for the facts recited above. 

2

See https://www.fmc.gov/oti/revocations-july-12-2019/. 

 8

5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Right Move agreed to provide door-to-port transportation by 

ocean carrier from the United States to Pakistan in exchange for 

which Complainant prepaid a flat fee of $2,595 that covered ocean 

freight, terminal handling, and port of loading expenses. Id. at 5-6. 

Complainant paid the fee by transferring funds to an account in Ms. 

Franklin’s name in accordance with her instructions. Id. at 6. Right 

Move used another licensed NVOCC, Troy Container Line (Troy), 

to arrange ocean transportation for Complainant’s shipment, and 

Troy’s local agent in Karachi, CP World Ltd. Co., handled the 

shipment when it arrived at the Karachi port on March 29, 2019. 

Right Move and Troy both issued bills of lading describing the 

shipment as used household goods that qualified for “[e]xpress 

release” on arrival at the port in Karachi, Pakistan. Id. at 7. 

When Complainant’s shipment arrived in Karachi, Troy 

placed a hold on the container because Right Move had not paid the 

ocean freight charges. Id. at 7-8, 23. Complainant did not learn of 

the hold until after he traveled from Islamabad to Karachi to retrieve 

the shipment at the port. Complainant arrived in Karachi on April 2, 

and quickly sought Respondent’s help in getting the container 

released and asked her to send confirmation that he had prepaid 

Right Move and that Right Move had in turn paid Troy the ocean 

freight charges. Id. at 8. Respondent never sent the requested 

confirmation. Shortly after the container arrived in Karachi, 

Respondent told Complainant that Right Move had been the victim 

of shipping fraud and was being forced to close but promised to 

work with Complainant to get his shipment released. Id. 

Respondent deflected Complainant’s requests for proof of 

payment with a smokescreen of false statements and 

misrepresentations and concealed the fact that Right Move had not 

in fact paid the ocean freight charges to Troy. Respondent told 

Complainant that Right Move had paid an unnamed third party and 

that she was diligently pursuing that party to find out why it failed 

to pay Troy and asking them to correct that error. Id. at 8-9. 

Respondent assured Complainant that a solution was at hand, telling 

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5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

him at one point, that she had “talked to the company and they are 

sending the payment today, but it may take a few days.” Id. at 9. 

Respondent also urged Complainant to pay the ocean freight 

himself and promised to “wire the money to [him].” Id. Complainant 

requested that she “wire the total amount that was due for shipping 

today, so I can pay it here,” and warned that if he did not receive the 

funds he would “be compelled to lodge a complaint” since he was 

being told by Troy and its agent in Karachi, CP World, that Right 

Move had engaged in shipping fraud. Id. at 10; Complainant’s App. 

(Feb. 25, 2020). Respondent responded by threatening to cut off 

direct communications with Complainant but also recommended he 

contact the Commission for assistance. Id. at Ex. 26 (Apr. 8, 2019 

email: “From now on we either talk through the [Commission] or 

your lawyer!”); see also Respondents’ Appeal to the Initial Decision 

(“Exceptions”), 7, 11, 15 (June 15, 2020). 

Complainant ultimately paid the ocean freight and 

demurrage charges himself on April 9, 2019 to recover possession 

of his belongings. I.D., 9. Due to further delays associated with 

transferring funds from the United States and dealing with Pakistani 

customs, Complainant did not actually take custody of the shipment 

until April 23. After Complainant paid Troy, Respondent again 

promised to cover “the ocean cost that we failed to pay in time” and 

told him that the funds had been sent by wire transfer. Id. at 14. 

Complainant was not reimbursed for the charges he paid to CP 

World or the other costs he incurred in connection with retrieving 

his shipment which included expenses for meals, lodging and taxis 

during his stay in Karachi. Id. at 12-14. 

 10 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B. Procedural History

Complainant filed this action in May 2019 seeking 

reparations against Ms. Franklin D.B.A. The Right Move., Inc. The 

complaint initially asserted a claim under 46 U.S.C. § 41102(c) and 

was later amended to add a § 41102(a) claim. Complainant later 

withdrew the § 41102(c) claim because Respondent refused to 

answer discovery about other complaints against the company. I.D., 

3. Complainant seeks the ocean freight ($1,107.97) and demurrage

charges ($935 from April 7 to 23) that he paid to release the

shipment and his expenses while staying in Karachi for lodging

($2,350), meals ($1,476), and taxi fare ($116.40). I.D. at 32.3

Respondent refused to answer Complainant’s discovery, 

prompting Complainant to file two motions to compel.4 The ALJ 

denied the first motion but ordered Respondent to answer the 

discovery by a date certain. When Respondent failed to comply with 

that order, Complainant filed a second motion to compel which the 

ALJ granted and ruled that Respondent’s refusal to answer 

discovery would be considered evidence that supports 

Complainant’s allegations. See id. at 17-18. After the ALJ granted 

the second motion to compel, Respondent submitted objections and 

partial discovery responses in an email to the ALJ but did not 

produce any documents. 

The ALJ issued an Initial Decision and found that 

Respondent violated § 41102(a) and used unfair means to obtain 

ocean transportation at less than applicable rates by misleading 

Complainant and inducing him to pay Troy the ocean freight 

charges. Id. at 24-25. The ALJ also held Ms. Franklin personally 

liable for reparations because she blurred the line between the 

3

Complainant initially also sought punitive damages and reparations for emotional 

distress which are not recoverable under the Shipping Act. See 46 U.S.C. § 

41305(b) (authorizing reparations for “actual injury”). Complainant does not 

challenge the ALJ’s decision denying those damages. See Complainant’s Reply 

to Respondent’s Exceptions (Complainant’s Reply), 8 (July 7, 2020). 4

See Complainant’s Mots. to Compel filed Oct. 18 and Dec. 19, 2019. 

 11 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

business and her personal affairs. The ALJ inferred that the 

documents she refused to produce would have been adverse to her 

position that she observed corporate boundaries. Id. at 29-30. 

In timely-filed exceptions, Respondent challenges the ALJ’s 

determination that she violated § 41102(a) and the decision to hold 

her personally liable and also argues that the reparations awarded 

are excessive. Respondent does not deny making false statements 

about Right Move having paid the ocean freight and failing to keep 

a promise to reimburse Complainant if he paid Troy, but she argues 

that she did not act in bad faith and was simply reacting to the stress 

of closing Right Move. Respondent also asserts that she should not 

be sanctioned for not responding to discovery because she did not 

understand her obligation to respond and, in any event, was entitled 

to withhold information she considers irrelevant or private. 

Complainant asks the Commission to affirm the Initial 

Decision in its entirety. Complainant’s Reply, 8. Complainant 

asserts that the ALJ’s findings on the § 41102(a) claim are supported 

by the record as is the ALJ’s decision to sanction Respondent for 

failing to provide discovery and comply with the ALJ’s orders. 

 

 

II. DISCUSSION

A. Standard of Review

When the Commission reviews exceptions to an ALJ’s 

Initial Decision, it has “all the powers which it would have in 

making the initial decision.” 46 C.F.R. § 502.227(a)(6). The 

Commission therefore reviews the ALJ’s findings de novo and can 

make additional findings. Id.; see also Maher Terminals, LLC v. 

Port Auth. of N.Y. & N.J., FMC Docket No. 12-02, 2015 FMC 

LEXIS 43, at *110-11 (FMC Dec. 18, 2015). Complainants bear the 

burden of proving their allegations by a preponderance of the 

evidence. 5 U.S.C. § 556(d); 46 C.F.R. § 502.155; Maher Terminals, 

LLC v. Port Auth. of N.Y. & N.J., FMC Docket No. 08-03, 2014 

FMC LEXIS 35, at *41 (FMC Dec. 17, 2014). Under the 

 12 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

preponderance standard, Complainants must show that their 

allegations are more probable than not. Crocus Investments, LLC v. 

Marine Transport Logistics, Inc., FMC Docket No. 15-04, 2019 

FMC LEXIS 44, at *10-11 (FMC July 16, 2019). The Commission 

can rely on circumstantial evidence if there is no direct evidence as 

long as its findings are based on more than speculation. See 

Waterman Steamship Corp. v. Gen. Foundries, Inc., 1993 FMC 

LEXIS 73, at *40 (ALJ 1993), adopted in relevant part, 1994 FMC 

LEXIS 19 (FMC June 13, 1994). 

The Commission’s rules do not expressly address the 

standard of review for decisions sanctioning parties’ failure to 

comply with orders compelling discovery. See Kawasaki Kisen 

Kaisha, Ltd. v. Port Auth. of N.Y. & N.J., FMC Docket No. 11-12, 

2014 FMC LEXIS 35, at *18-19 (FMC Nov. 20, 2014). “[F]or 

situations which are not covered by a specific Commission rule,” the 

Commission follows the Federal Rules of Civil Procedure “to the 

extent that they are consistent with sound administrative practice.” 

46 C.F.R. § 502.12. Federal Rule of Civil Procedure 37(b) is the 

corollary to the Commission’s rule on discovery sanctions (46 

 

C.F.R. § 502.150) for violating an order directing discovery

responses. In reviewing district courts’ orders on discovery, the

United States Courts of Appeal apply an abuse of discretion standard

because a “‘narrowly circumscribed’ scope of review is consistent

with district courts’ “‘considerable discretion’ in managing

discovery” and their “broad discretion to impose sanctions for

discovery violations under Rule 37.” Parsi v. Daioleslam, 778 F.3d

116, 125 (D.C. Cir. 2015); see also Bonds v. District of Columbia,

93 F.3d 801, 807 (D.C. Cir. 1996) (reviewing court should reverse

discovery sanctions only if they are found to be “clearly

unreasonable, arbitrary, or fanciful”).

B. Discovery Sanctions 

 

 

 

The ALJ imposed discovery sanctions when Respondent did 

not comply with the ALJ’s order directing discovery responses. I.D., 

17-18. The ALJ inferred that responses Respondent failed to provide

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would have been adverse to her interests. Id. Before imposing 

sanctions, the ALJ gave Respondent several opportunities to comply 

and repeatedly warned about the consequences of refusing to 

produce discovery. Id. Respondent challenges the sanctions as 

unjust and defends her refusal to provide discovery by claiming that 

the information Complainant sought is not relevant because she 

concedes that Right Move did not pay the ocean freight charges and 

because Right Move’s information was already on file with the 

Commission. Exceptions, 8, 10. 

Parties in adjudications before the Commission are entitled 

to “obtain discovery regarding any nonprivileged matter that is 

relevant to any party’s claim or defense--including the existence, 

description, nature, custody, condition, and location of any 

documents or other tangible things.” 46 C.F.R. § 502.141(e)(1). 

“Relevant information need not be admissible at hearing if the 

discovery appears reasonably calculated to lead to the discovery of 

admissible evidence.” Id. If a party fails or refuses to respond to 

discovery, the requesting party can move for an order directing 

responses, and the party resisting disclosure bears the burden of 

proving that the requests are improper or unduly burdensome. Id. § 

502.150(a); Kawasaki, 2014 FMC LEXIS 36, at *35 (citations 

omitted). The presiding officer has authority, for good cause, to 

“order discovery of any matter relevant to the subject matter 

involved in the action.” 46 C.F.R. § 502.141(e). 

Refusing to comply with an order directing discovery 

responses is sanctionable conduct. If a party “fails or refuses to obey 

an order requiring it to make disclosures or respond to discovery 

requests, the presiding officer . . . may make such orders in regard 

to the failure or refusal as are just.” Id. § 502.150(b). Sanctions 

authorized by the Commission’s regulations include: (1) inferring or 

adopting certain facts as true for purposes of that proceeding; or (2) 

barring claims and defenses or restricting evidence. Id. Adverse 

inferences are “particularly appropriate,” when the resisting party 

“fails to produce documents.” Worldwide Relocations, Inc. -

Possible Violations of Sections 8, 10 and 19 of the Shipping Act, 

 14 5 F.M.C.2d
 

 

 

 

FMC Docket No. 06-01, 2012 FMC LEXIS 23, at *12 (FMC Mar. 

15, 2012). 

The ALJ’s decision to sanction Respondent for refusing to 

produce discovery was not an abuse of discretion. As an initial 

matter, Complainant’s requests were well within the bounds of 

permissible discovery under the Commission’s rules. See 46 C.F.R. 

§ 502.141(e)(1). In fact, some information Complainant requested

should have been provided in Respondent’s initial disclosures. See

46 C.F.R. § 502.141 (explaining parties’ obligation to produce

initial disclosures “without awaiting a discovery request” containing

information about persons “likely to have discoverable information”

and “[a] copy, or a description by category and location, of all

documents . . . that the disclosing party has in its possession,

custody, or control and may use to support its claims or defenses”).

Complainant sought information about Respondent’s 

communications with Troy and payments related to his shipment 

and also requested documents related to Right Move’s status as a 

separate entity, such as business tax returns and related materials. 

See Complainant’s Mot. to Compel, Ex. 1 at 3 (Oct. 19, 2019). 

Complainant also requested information about other complaints 

lodged against Right Move that could be relevant to showing 

whether it previously engaged in the conduct alleged. See id. 

Respondent’s refusal to provide this information led Complainant to 

withdraw the § 41102(c) claim because he did not have evidence 

that the claimed acts or omissions occurred on a “normal, customary 

and continuous basis.” See 46 C.F.R. § 545.4. 

Respondent repeatedly failed to heed the ALJ’s instructions 

and clear warnings that refusing to answer discovery would lead to 

sanctions. The ALJ gave Respondent several chances to comply 

after explaining that answers were required and that continued 

refusals could lead to a default. See Order Denying Mots. for Default 

and Summ. Decision, to Strike, and to Compel; Discharging Show 

Cause Order and Scheduling Order (ALJ Oct. 30, 2019). The ALJ 

denied as moot the first of Complainant’s two motions to compel 

 15 5 F.M.C.2d
 

 

 

 

and established a date certain for Respondent’s answer while 

emphasizing the need to comply. See id. at 3-4. Respondent did not 

heed that warning and did not produce any documents, prompting 

Complainant to file a second motion to compel. The ALJ granted 

Complainant’s second motion to compel but gave Respondent 

another chance to avoid sanctions by responding to the discovery. 

Instead of taking advantage of that opportunity, Respondent 

submitted a letter to the ALJ that listed the discovery requests and 

stated boilerplate reasons for not providing the information 

requested.5 Respondent provided basic information in response to a 

few interrogatories (e.g., the name of the person responding, the 

surety bond amount, etc.) but by and large did not answer the 

interrogatories and provided no documents. 

Respondent categorically refused to respond to questions she 

believed would not further resolution of the claims or which she 

considered irrelevant or related to another company not directly 

involved in her agreement with Complainant. She asserted that her 

acknowledgement that Right Move had not paid the ocean freight 

charges made most of the discovery requests irrelevant See 

Respondent’s Answer, 1-2; see also Respondent’s Mot. for Finding 

of Facts alleged by Complainant and Default Decision--Response 

(Respondent’s Proposed Findings) (Jan. 23, 2020). 

Respondent’s excuses for not complying are not persuasive. 

Respondent claims that she did not understand the process and was 

entitled to withhold the information she considered irrelevant. 

Respondent asserts that as a pro se litigant,6 she did not understand 

that she had to respond to discovery or that shirking that obligation 

5

Respondent’s Answer to Complainant’s Discovery Request” (Respondent’s 

Answer) (Jan. 15, 2020). 

6

The ALJ made allowances for Respondent’s pro se status in dealing with 

discovery and other issues. See Anchor Shipping Co. v. Alianca Navegacao E 

Logistica Ltda., FMC Docket No. 02-04, 2008 FMC LEXIS 21, at *56 (ALJ Dec. 

16, 2008) (stating that pro se litigants should be held to less stringent standards). 

The ALJ held Respondent’s filings to less stringent standards and did not penalize 

her for technical deficiencies. 

 16 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

would lead to a penalty. Respondent claims that if she had 

understood those things, she would have provided more 

information. See Exceptions, 2-3, 10. Respondent also states that she 

assumed the case would proceed like a mediation and the ALJ would 

notify her if more information was needed to resolve the claims. Id. 

at 2. While Respondent may not have initially understood the 

Commission’s rules on discovery, that excuse is not plausible in 

light of the ALJ’s clear instructions and repeated, pointed warnings 

about parties’ obligations to answer discovery and consequences of 

refusing to answer. The ALJ’s recurring admonitions clearly put 

Respondent on notice that her continuing failure to cooperate could 

lead to sanctions and possibly a default judgment. 

The ALJ narrowly tailored the discovery sanctions imposed 

to address the resulting prejudice to Complainant’s case. See Rivera 

v. New York City Hous. Auth., Civ No. 94-436, 1998 U.S. Dist.

LEXIS 2816 (S.D.N.Y. Mar. 11, 1998) (sanctions imposed should

be narrowly tailored to address the specific harm). Respondent

refused to provide information about Right Move’s existence as a

corporate entity separate and distinct from Ms. Franklin acting in

her personal capacity and also refused to provide information about

prior complaints lodged against Right Move.7 That information was

uniquely or largely within Respondent’s control and by refusing to

disclose it, Respondent unfairly deprived Complainant of

information needed to prove a § 41102(c) claim or show that Ms.

Franklin did not respect the boundaries between the company’s and

her personal business.

Sanctioning that conduct was appropriate to prevent 

Respondent from benefiting from her own intransigence and to 

minimize unfair prejudice to the Complainant. See I.D., 15-16 

(relying on Respondent’s failure to answer discovery in finding that 

Respondent failed to treat Right Move as a separate entity); see also 

GO/DAN Industries, Inc. v. Eastern Mediterranean Shipping Corp., 

7

See Order Denying Complainant’s Mot. for Finding of Facts and Default 

Decision, 1 (ALJ Feb. 6, 2020); see also I.D., 18. 

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FMC Docket No. 98-24, 1998 FMC LEXIS 5, at *7 (ALJ Dec. 10, 

1998) (sanctioning Respondent’s failure to participate in 

proceedings by entering judgement in Complainant’s favor). 

The Commission affirms the discovery sanctions against the 

Respondent and infers that the discovery Respondent withheld 

would have been adverse to her interests.8

C. Section 41102(a) Claim

The ALJ found that Respondent knowingly and willfully 

obtained ocean transportation at less than otherwise applicable rates 

through unjust and unfair means in violation of § 41102(a). I.D., 23-

25. The ALJ based that determination on Respondent concealing

Right Move’s failing financial status when Complainant booked the

shipment, falsely claiming that Right Move had paid the ocean

freight charges and blaming an unnamed third party for the hold

Troy placed on the shipment, and making illusory promises to repay

Complainant immediately if he paid the ocean freight charges that

Right Move owed. Id. Respondent now admits that Right Move

failed to pay Troy for transporting Complainant’s shipment but

defends the failure to reveal Right Move’s failing financial status to

Complainant before booking the shipment. She argues that her

misrepresentations about Right Move having paid the charges were

caused by the stress of Right Move’s financial collapse and were not

made in bad faith. See Exceptions, 3-4.

8

Complainant voluntarily dismissed the § 41102(c) claim because the Respondent 

refused to produce discovery about previous acts or omissions that might have 

been used to support elements of the claim. Had the Complainant not dismissed 

the § 41102(c) claim, the ALJ could have similarly imposed sanctions including 

an inference that the Respondent’s actions occurred on a normal, customary, and 

continuous basis. The ALJ’s sanctions in this case illustrate the importance of 

discovery obligations in all Commission proceedings, and in particular cases 

involving § 41102(c) claims. 

 18 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Muhammad Rana v. Michelle Franklin, D.B.A. “The Right Move” 

1. Elements of a Section 41102(a) Claim

Section 41102(a) states that a “person may not knowingly 

and willfully, directly or indirectly, by means of false billing, false 

classification . . . or any other unjust or unfair device or means, 

obtain or attempt to obtain ocean transportation for property at less 

than the rates or charges that would otherwise apply.” 46 U.S.C. § 

41102(a). Proving a § 41102(a) claim requires three elements: (1) 

knowing and willful conduct; (2) through which, either “directly or 

indirectly,” by means of the actions enumerated in the statute or 

through “any other unjust or unfair device ormeans;” (3) respondent 

obtained or attempted to obtain ocean transportation at lesser rates. 

Id.; OC Int’l Freight, Inc., FMC Docket No. 12-01, 2014 FMC 

LEXIS 14, at *12 (FMC July 31, 2014).9

The first element--knowing and willful conduct--is 

established if the respondent had “knowledge of the facts of the 

violation” and acted either intentionally or with “reckless disregard, 

plain indifference, or purposeful or obstinate behavior akin to gross 

negligence.” Rose Int’l, Inc. v. Overseas Moving Network, Int’l, 

FMC Docket No. 96-05, 2001 FMC LEXIS 39, at *118, *147 (FMC 

June 1, 2001) (citations omitted). Conduct is knowing and willful if 

it was carried out “purposely or obstinately” or with “gross 

recklessness, heedlessness, or a callous disregard” for the 

9

Although the ALJ determined that Respondent acted as a regulated entity in 

arranging transportation for Complainant’s shipment (I.D., 23), regulated status 

is not an element required to establish a § 41102(a) claim. OC Int’l Freight, 2014 

FMC LEXIS 14, at *18-19 (§ 41102(a)’s “prohibitions” are not limited to entities 

like common carriers or NVOCCs). Further, the Respondent does not challenge 

the ALJ’s finding on that question and it is supported by the record. Right Move 

was a licensed NVOCC and held itself out as a common carrier when it booked 

the shipment and assumed responsibility for transporting Complainant’s 

household goods from the United States to Pakistan by ocean carrier. See 46 

U.S.C. § 40102(17) (defining NVOCC); Tienshan, Inc. v. Tianjin Hua Feng 

Transport Agency Co., Ltd., FMC Docket No. 08-04, 2011 FMC LEXIS 9, *39-

42 (ALJ Mar. 9, 2011) (registering with the Commission establishes that an entity 

holds itself out as a common carrier). 

 19 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consequences or “plain indifference to the law’s requirements.” 

Brokerage on Shipments of Ocean Freight—Max LePack, (Max 

LePack), 5 F.M.B. 435, 444 (FMB 1958) (equating indifference 

with an “outright” violation); 10 see also Portman Square Ltd.--

Possible Violations of Section 10(a)(1) of the Shipping Act of 1984, 

FMC Docket No. 97-17, 1998 FMC LEXIS 27, at *21-22 (ALJ Mar. 

16, 198) (Admin. final 1998). 

The second element is established if the respondent used 

false billing or misclassification, or any other “unjust device or 

means” to obtain ocean transportation at less than otherwise 

applicable rates. Rose Int’l, 2001 FMC LEXIS 39, at *102. Here, 

there are no allegations that Respondent engaged in false billing, 

misclassification of cargo, or any other conduct specifically 

prohibited by § 41102(a) so the question is whether Respondent’s 

actions may be considered any “other unjust or unfair device or 

means” within the meaning of § 41102(a). 

[F]raud or concealment is a necessary ingredient in

the proof of an unjust or unfair device or means . . .

It is such fraud or concealment that in fact makes the

practice unjust or unfair. Whether an act constitutes

an unfair or unjust device . . . depends on its

similarity to false billing, false classification or the

other prohibited conduct.

Open Bulk Containers, 727 F.2d at 1064 (citations omitted); see also 

OC Int’l Freight, 2014 FMC LEXIS 14, at *14. Knowingly making 

claims that one knows or should know are false supplies the required 

element of fraud or concealment. Open Bulk Containers, 727 F.2d 

at 1065. 

10Decisions interpreting the initial paragraph of § 16 of the 1916 Act, the 

predecessor to § 41102(a), remain persuasive authority, because the operative 

language prohibiting the use of “any other unjust or unfair device or means” to 

obtain lower rates has not changed. See U.S. v. Open Bulk Carriers, 727 F.2d 1061 

(11th Cir. 1984) (quoting the initial paragraph of § 16, formerly codified at 46 

U.S.C. § 815 (initial paragraph)). 

 20 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By itself, a failure to pay ocean transportation charges does 

not establish the second element of § 41102(a) claim, because that 

alone does not establish that fraud or deceit were used to avoid 

paying the applicable rates. 46 C.F.R. § 545.2; see also Open Bulk 

Containers, 727 F.2d at 1064 (openly combining cargos to obtain 

lower rates and reduce deadfreight penalties was not an unjust or 

unfair device). Further, showing that the respondent was deceitful 

or dishonest in some respect unrelated to obtaining or attempting to 

obtain lower rates is not sufficient; fraud or concealment must be the 

means by which the respondent obtained or tried to obtain lower 

rates. Open Bulk Containers, 727 F.2d at 1064. 

Finally, the third element is established by showing that 

respondent obtained or tried to obtain ocean transportation for less 

than the otherwise applicable rates. OC Int’l Freight, 2014 FMC 

LEXIS 14, at *17-18. 

2. Respondent’s Conduct 

a. Knowing and Willful 

The ALJ determined that Respondent acted knowingly and 

willfully when she deflected Complainant’s inquiries “with false 

information,” made illusory promises to persuade Complainant to 

pay Troy, and deposited Complainant’s payment into a personal 

bank account to segregate it from Right Move company funds and 

protect it from the business’s creditors. I.D., 24-26. The ALJ cited 

Respondent’s “ever-changing” excuses in concluding that she had 

not established a good faith defense to the allegations that she acted 

knowingly and willfully. Respondent counters by arguing that it was 

impossible for her to act knowingly and willfully because she was 

too distressed by Right Move’s insolvency and the company’s 

forced closure to formulate a coherent plan and claims that her 

actions were nothing more than a desperate and scattershot attempt 

to salvage her pride and professional reputation. See Exceptions, 4. 

 21 5 F.M.C.2d
 

 

Respondent’s emails and her admission that Right Move 

failed to pay the ocean freight charges establish that she knowingly 

relayed false information. Respondent deflected Complainant’s 

request for confirmation of payment by insisting that “we have paid 

the shipping costs to a third party to pay the SSL for this shipment.” 

Id., Ex. 23. Respondent now concedes that the information about 

Right Move having paid the ocean freight charges was false. See 

Respondent’s Mot. for Finding of Facts, 3 (Jan. 23, 2020), 

(conceding that “[R]espondent failed to pay ocean costs”). 

The story that Respondent manufactured to conceal Right 

Move’s failure to pay the ocean freight charges and the details she 

invented to keep up that false pretense show that her actions were 

knowing and willful. Respondent deliberately created and 

maintained the illusion that she was diligently working with an 

unnamed third party that Right Move had allegedly paid to have that 

unnamed party pay Troy and get shipment released. Several times, 

she reported on communications from this unnamed third party and 

assured Complainant that a solution was almost at hand. See 

Complainant’s App., Exs. 23-32. At various times, she told 

Complainant that: (1) she was “checking into” the situation and to 

“give [her] an hour or 2 to see why this was not paid;” (2) she had 

“talked to the company and they are sending the payment today, but 

it may take a few days,” and added that “I think it will be released 

by Tuesday or Wednesday [at] the latest;” and (3) the “[t]he third 

company I booked with . . . waited until the last minute to pay the 

ocean . . . [and] thought they had a few more days. Id. In other 

communications, Respondent assured Complainant that she had 

been “asking them to pay it for the last 4 days, they should be able 

to pay it today or tomorrow. I will send you the proof once it was 

paid:” and pressed Complainant to tell her whether he had paid the 

charges himself, telling him that the “[t]he company I paid the 

money to needs to know. . .” Id. 

Respondent’s unflagging persistence in keeping up this 

pretense refutes her claim that it was not a purposeful plan but rather 

an ad hoc reaction to the stress of dealing Right Move’s financial 

 22 5 F.M.C.2d
 

 

 

 

collapse. See Exceptions, 4. Respondent was not just flailing 

aimlessly when she told Complainant that she was working to 

resolve the situation, as she now contends. See id. She persistently 

defended a story that she fabricated and embellished it with details 

to make it seem more believable and suggest at times that a solution 

was imminent. 

Respondent does not identify any evidence in the record that 

Right Move paid a third party or even that such a party existed. 

Further, Respondent’s story is not credible and does not align with 

established facts. See Exceptions, 10-12. If Right Move had actually 

paid the money to another entity with the understanding that it 

would pay Troy, that does not explain why the payment was not 

eventually sent to Troy. Nor does it explain why Respondent has not 

identified this unnamed party whose lack of diligence caused Troy 

to hold the shipment. Respondent suggested in one email to 

Complainant that the third party simply miscalculated the timing 

and the shipment arrived before it made the payment, which might 

explain why the payment arrived late but does not explain why it 

never arrived at all. And Respondent’s credibility on this point is 

further eroded by the refusal to answer Complainant’s discovery. 

Respondent did not identify this unnamed party in discovery or 

provide any documents proving its existence, so it is reasonable to 

infer Right Move did not pay a third party who then failed to remit 

the freight charges to Troy. I.D., 28. 

Respondent has also suggested that when Complainant first 

contacted her, she thought that Troy’s charges had been paid 

(Exceptions, 7), but later learned that Troy had applied the payment 

to charges owed on a prior shipment. See Complainant’s App., Ex. 

27. Respondent does not point to any evidence in the record showing

that Right Move paid or thought it had paid Troy’s charges by

sending the money to a third party. See I.D., 27. Even if Respondent

was initially mistaken about the payment having gone out to Troy,

Troy’s hold on the shipment should have alerted her to the fact that

it either had not received the payment, had not applied it to

Complainant’s shipment, or at least that something had gone awry.

 23 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

Further, even if Respondent mistakenly believed that Troy had been 

paid, that would not excuse inventing a story blaming an unnamed 

third party or make that fabrication any less purposeful. 

Respondent’s false representations to Complainant that Troy 

had been paid were not just purpose-driven, they were reckless and 

grossly negligent. By inducing Complainant to believe that a 

solution was close at hand and she would shortly furnish him with 

proof of payment, Respondent led Complainant to depend on her 

and await a solution that was not going to materialize. Respondent 

recklessly disregarded the negative impact those false assurances 

would have on Complainant. Respondent has described herself as a 

professional experienced in maritime industry practices. See I.D., 

26; Exceptions, 6 (noting Respondent’s 15 years of experience in 

the shipping industry). As the owner and operator of an NVOCC, 

Respondent must have known that free time was limited and that 

any increased delay in releasing the shipment would add to 

demurrage and possibly other charges due on the shipment. By 

ignoring the obvious and inevitable consequences of her actions, 

Respondent demonstrated callous disregard that equates to knowing 

and willful conduct. See Rose Int’l, 2001 FMC LEXIS 39, at *147-

48 (knowing and willful conduct shown by callous disregard for the 

consequences of one’s actions); Max LePack, 5 F.M.B. at 444. 

Respondent also acted recklessly in making illusory 

promises or guarantees to repay Complainant if he paid Troy the 

ocean freight charges. Several factors made those promises 

illusory.11 First, from all indications, Respondent did not have the 

funds to repay Complainant. Right Move had just closed for lack of 

funds and apparently did not have the funds to pay a line of credit 

extended by its bank. Despite this apparent lack of funds, 

Respondent assured Complainant that she would send the funds to 

11At other times in later emails, Respondent qualified her promises by stating, e.g., 

that she attempted to repay Complainant as much as she is responsible for or help 

him defray the costs. Exceptions, 7; Respondent’s App., Ex. 8. But those qualified 

assurances do not excuse or reverse the consequences of her unqualified 

assurances. 

 24 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

him “shortly” or within days if he settled Right Move’s debt to 

release the hold on his shipment. The unpaid freight charges were a 

business debt, but the business was insolvent and had ceased 

operating so there was no obvious source of funds from which 

Respondent could immediately repay Complainant. It is clear from 

the evidence, including Respondent’s own statements, that 

Respondent knowingly or at least recklessly misled Complainant by 

making promises she could not reasonably have expected to keep.12

And she used those promises to inaccurately imply that Complainant 

would quickly be repaid if he satisfied Right Move’s debt to Troy 

for the ocean freight charges. 

Respondent’s challenges to the ALJ’s determination that she 

acted knowingly and willfully are not persuasive. First, she points 

to other actions she took to assist Complainant and other shippers as 

proof that her communications with Complainant were not made in 

bad faith. See Exceptions, 7. As evidence of that, Respondent points 

to an email in which she advised Complainant to seek help from the 

Commission and file a claim against the company’s surety bond. See 

id. at 6-8. Offering that assistance hardly refutes the compelling 

evidence that she knowingly and willfully misled Complainant 

about having paid the ocean freight and then made misleading 

promises about immediate repayment. See generally OC Int’l 

Freight, Inc., 2014 FMC LEXIS 14, at *12-13 (certifying 

information respondent knew was false demonstrated knowing and 

willful conduct). 

12Respondent’s own statements demonstrate the lack of available funds to honor 

the promises made to Complainant. Respondent stated that the decision to close 

Right Move was made in late February 2019, a month before her April 2019 

emails to Complainant about Troy’s hold on the shipment. See Exceptions. 8. 

Respondent informed Complainant of the decision to close the company in an 

email dated April 2, 2019 in which she explained that the company had been the 

target of “shipping fraud” and was forced to close due to the resulting “financial 

burden.” Exceptions, 7, 15; Complainant’s App., Ex. 17 (advising Complainant 

that “[t]he booking was done under another company[‘s] license, because I knew 

we may get to the point we have to close”). 

 25 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respondent also argues that her promises to repay 

Complainant were made in good faith,

13 she did intend to repay the 

money and that two attempts to transfer the money failed because 

there was not enough money in her account. Exceptions, 14 

(referencing email dated May 30 stating that funds to cover “the 

ocean cost that we failed to pay in time” were sent “yesterday” by 

wire transfer and should reach Complainant’s bank account the next 

day). This argument is not persuasive for several reasons. First, 

Respondent does not point to any supporting evidence beyond her 

own assertion that she intended to repay the money and attempted 

to do so. Second, Respondent’s assertion lacks credibility given that 

Right Move had just ceased operating for lack of funds. Further, if 

Respondent had business funds available to repay Complainant that 

begs the question of why she did not pay Troy/CP World directly 

with those funds. 

Respondent’s second argument misinterprets § 41102(a) and 

the conduct it governs. Respondent argues that her conduct 

subsequent to booking Complainant’s shipment on February 6, 

2019, and in particular her communications with Complainant about 

the unpaid freight charges in early April 2019, are not relevant and 

should not be considered as evidence supporting Complainant’s 

allegations. That argument inaccurately assumes that § 41102(a) 

governs how Right Move obtained Complainant’s shipping business 

and fails to recognize that the conduct at issue is whether/how Right 

Move obtained ocean transportation for Complainant’s shipment 

without paying the applicable rates.14 See Exceptions, 2-4, 18. 

13Complainant signed the shipping agreement with Right Move on February 6, 

2019 (Complainant’s App., Ex. 1), and Respondent has stated that she made the 

decision to close Right Move a few weeks later in late February 2019 (Exceptions, 

7-8, 13). 14Respondent’s raises this argument several times in challenging other aspects of

the ALJ’s analysis and the evidence that the ALJ relied on but it has no legal basis

and does not discredit the ALJ’s analysis on this or any other issue. See, e.g.,

Exceptions, 6-7 (asserting that the decision to close Right Move was made after

booking the shipment).

 26 5 F.M.C.2d
 

 

 

 

For all the reasons discussed above, the Commission finds 

that Respondent acted knowingly and willfully. 

b. Unjust and Unfair Means or Device 

Proving a respondent used an unjust or unfair means to 

obtain ocean transportation at lower rates requires evidence of fraud 

or concealment carried out for that purpose. Open Bulk Containers, 

727 F.2d at 1064; OC Int’l Freight, Inc., 2014 FMC LEXIS 14, at 

*12-14. Here, the ALJ found “clear evidence” of fraud and

concealment based on a series of actions. I.D., 26-27. The ALJ

found that in booking and arranging transportation for

Complainant’s shipment, Respondent acted fraudulently by

concealing Right Move’s financial instability, failing to pay the

ocean freight then falsely claiming the charges had been paid while

Complainant’s shipment remained “in limbo,” and finally by

making illusory promises to repay Complainant. Id. at 28.

Respondent again argues that she was under stress and not acting in

bad faith and points to evidence that she tried to help Complainant

and other shippers. Exceptions, 3-6, 18.

Respondent engaged in a series of deceptive acts to conceal 

Right Move’s insolvency and failure to pay the ocean freight 

charges for Complainant’s shipment and to avoid paying those 

charges. Respondent was certainly aware that ocean freight charges 

were Right Move’s responsibility under the shipping agreement that 

Complainant signed. She had operated Right Move for the past 8 

years and was its sole employee. She also knew that Complainant 

had fulfilled his part of the agreement by paying Right Move’s flat 

fee in advance. But despite all of that, Respondent failed to pay the 

ocean freight charges--then invented a scapegoat to conceal that 

failure and used illusory promises to induce Complainant to pay the 

charges. The Commission’s regulations recognize similar conduct 

as supporting an inference that a respondent used unjust or unfair 

means to avoid paying the applicable rates. 46 C.F.R. § 545.2 

(inducing the carrier in bad faith to relinquish its possessory lien on 

 27 5 F.M.C.2d
 

 

 

 

 

 

the cargo or transport without prepayment sufficient to infer use of 

an unjust device). 

Respondent also engaged in deception when she opened an 

account in a different bank to avoid Right Move’s creditors and used 

that account for Complainant’s payment. Respondent admits 

opening the account to prevent her original bank from seizing funds 

in Right Move’s account to cover a line of credit and concedes that 

the new account was in her name and that Right Move’s name was 

not on the account. Exceptions, 14. But she claims that her reasons 

for switching banks and using an account in her name were 

legitimate. See id. Respondent asserts that she was following the 

bank representative’s advice and only opened the account in her 

name because the documents needed to open a business account 

were not immediately available. Id. at 14-15. Respondent does not 

point to any evidence to substantiate these statements. 

The totality of Respondent’s actions establishes the use of an 

unjust or unfair device. See, e.g., Rose Int’l, 2001 FMC LEXIS 39 

at *123-25, *149-50 (creating shell corporation showed purposeful 

action to evade the Shipping Act and the Commission’s regulations 

or at a minimum, reckless disregard). Respondent’s repeated 

falsehoods and deceptive tactics shows that her actions were a 

calculated effort to avoid paying for the ocean transportation and to 

convince Complainant to pay those charges even though he had 

already paid Right Move for that service. This series of actions 

shows that Right Move’s failure to pay Troy was not grounded in a 

good faith dispute over the charges or the result of an honest error 

or oversight on its part or based on any other recognized defense for 

non-payment. See 46 C.F.R. § 545.2. 

If the only evidence offered to prove knowing and willful 

use of unfair means to avoid paying Troy had been Respondent’s 

failure to disclose Right Move’s uncertain financial status, that alone 

would not be sufficient. Respondent has stated that Right Move’s 

financial issues might have been caused by seasonal fluctuations in 

revenue and the Commission might reasonably infer that 

 28 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respondent subjectively believed that Right Move might survive the 

downturn and recover. See I.D., 27-28 (quoting Respondent’s 

statement that she “had been through this same cycle” for the past 8 

years and managed successfully). But when Respondent’s failure to 

disclose Right Move’s precarious status is considered as part of a 

series of actions directed at concealing or misleading Complainant 

with misinformation, collectively the evidence shows that her 

actions were purposeful and directed at avoiding paying Troy the 

ocean freight charges owed for Complainant’s shipment. 

For all the reasons discussed above, the Commission finds 

that Respondent used an unjust or unfair means or device to avoid 

paying the ocean freight charges. 

c. Attempting to or Obtaining Transportation at 

 Lesser Rates 

The ALJ determined that Respondent obtained ocean 

transportation for Complainant’s shipment and avoided paying the 

charges through unjust means. I.D., 28. The ALJ stated that 

“Respondent does not contest this element” and conceded that 

Complainant’s shipment was transported by ocean carrier and Right 

Move failed to pay for that transportation. Respondent challenges 

the ALJ’s determination and defends her conduct by arguing that 

she intended to pay for the transportation but simply lacked the 

necessary funds and also claims that she is not culpable because she 

urged Complainant to file a claim against the surety bond. 

Exceptions, 15-16. 

Respondent’s arguments challenging the ALJ’s findings are 

not persuasive. Respondent argues that she originally intended to 

repay Complainant and made two attempts to wire transfer the funds 

which the bank rejected for lack of funds. Id. at 14-16. As with 

Respondent’s other defenses, the only evidence that Respondent 

points to is her own statements and assertions. Since she refused to 

produce documents in discovery, the record does not include 

documents substantiating her claims about the failed wire transfer 

 29 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

attempts. Further, even if Respondent’s statements are true, her 

subjective intentions and failed attempts to transfer the money to 

Complainant’s account do not refute the evidence that she avoided 

paying Troy the ocean freight charges for Complainant’s shipment. 

For all the reasons discussed above, the Commission finds 

that Respondent obtained ocean transportation for Complainant’s 

shipment without paying the applicable rates using an unfair means 

or device. Because the Respondent knowingly and willfully 

obtained ocean transportation at less than otherwise applicable rates 

through unjust and unfair means, the Commission affirms the ALJ’s 

determination that Respondent violated § 41102(a). 

D. Personal Liability

The ALJ found Ms. Franklin personally liable for 

reparations. I.D. at 29-31. Respondent argues that she should not be 

held personally liable because the ALJ should not have sanctioned 

her for discovery violations and she also defends the use of her 

personal account for business funds as an anomaly that came about 

through innocent action on her part. See Exceptions, 14. 

As an initial matter, although Respondent states several 

times in the Exceptions and elsewhere in filings before the ALJ that 

she accepts personal responsibility for the ocean freight charges, it 

is clear from the content and context of her statements that she does 

not concede personal liability for reparations awarded in this case. 

In conceding responsibility, Respondent conflates personal liability 

with reimbursement that Complainant might seek under Right 

Move’s surety bond. See, e.g., Respondent’s Proposed Findings, 3 

(“Respondent is personally liable through her bond, that’s exactly 

why there is a BOND”)(emphasis in original); Exceptions, 3-4 

(referring to Right Move’s surety bond as her “personal guarantee” 

while also noting that as the owner of a “closed failed company” she 

bears responsibility for its debts); see also I.D., 5 (citing Ms. 

Franklin’s admission that as the “sole owner of a failed company,” 

she is responsible for its debts). Also, Respondent contests the 

 30 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

inferences and evidence the ALJ relied on in piercing the corporate 

veil and finding her personally liable, so it is clear that Respondent 

does not concede personal liability for reparations. 

The ALJ applied the Commission’s two-prong test derived 

from federal common law to determine whether Respondent 

established and respected corporate boundaries. I.D., 29-30. That 

test examines whether a respondent: (1) exercised control and 

domination over a shell corporation; and (2) committed a federal 

violation. Rose Int’l, 2001 FMC LEXIS 39 at *122-23; YSN Imports 

Inc. d/b/a Flame King v. Oberlander, FMC Docket No. 21-02, 2021 

FMC LEXIS 104, at *9 (ALJ July 7, 2021). 

The Commission has identified multiple factors relevant in 

deciding the first question: 

(1) the nature of the ownership and control; (2)

failure to maintain corporate minutes or adequate

corporate records and failure to follow corporate

formalities; (3) commingling of funds and other

assets; (4) inadequate capitalization; (5) diversion of

the corporation's funds or assets to non-corporate

uses; (6) use of the same office or business location

by the corporation and its shareholders; (7)

overlapping ownership, officers, directors and

personnel; (8) the amount of business discretion

displayed by the allegedly dominated corporation;

and (9) whether the corporations are treated as

independent profit centers.

Rose Int’l, 2001 FMC LEXIS 39 at *127 (citations omitted). To 

resolve the second question, the Commission considers whether it is 

appropriate to pierce the corporate veil to prevent respondent from 

using the “corporate device” to commit statutory violations and 

whether refusing to do so would allow respondent to use the 

corporate structure to circumvent a federal statute. Id. at *127-28. 

 31 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The ALJ relied on Respondent’s refusal to respond to 

Complainant’s discovery in entering key findings about her control 

over Right Move and the absence of corporate boundaries. The ALJ 

found that: (1) from February 2019 forward, Ms. Franklin was Right 

Move’s “sole spokesperson, representative, owner, advocate, and 

employee;” (2) Right Move did not “observe corporate formalities” 

in terms of maintaining proper documentation; (3) Right Move did 

not operate as a separate entity distinct from Ms. Franklin and is or 

was taxed through Ms. Franklin’s personal tax returns; (4) Ms. 

Franklin treated Right Move’s funds and assets as her own and used 

Right Move “as a facade for her personal financial dealings” and did 

not respect its boundaries as a separate corporate entity. I.D., 15-16 

(Finding Nos. 78-82). 

Respondent’s refusal to provide discovery about Right Move 

and its corporate structure and income reporting led the ALJ to infer 

that information would have been adverse to her position. The ALJ 

also relied on Respondent’s contemporaneous statements as 

probative and found they were “the most directly relevant evidence 

in the record.” I.D., 30. The ALJ relied in particular on admissions 

that Respondent made in an April 9, 2019, email to the effect that 

she had booked Complainant’s February 2019 shipment under 

another company’s license because she knew that Right Move might 

reach the point where closing was inevitable. Complainant’s App., 

Ex. 27. In the same email, Respondent acknowledges opening an 

account which she characterized as a “business account” but with 

“my name on it in order to be not associated with” Right Move’s 

financial burden. Id. The ALJ found these admissions “coupled with 

[Respondent’s] failure to produce discovery” established that Ms. 

Franklin used her personal bank account for Complainant’s payment 

and commingled business and personal funds, and also proved that 

Right Move had inadequate operating capital. I.D., 30. 

The ALJ appropriately relied on Respondent’s refusal to 

provide discovery in inferring that she had not maintained corporate 

boundaries between Right Move and her personal affairs. See I.D., 

29-30. Respondent was unrelenting in refusing to provide discovery

32 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and in defending that decision before the ALJ and the Commission. 

In her exceptions, Respondent acknowledges refusing to share 

personal/corporate details because she thought they were irrelevant 

to the case and because she “refused to drag any other company into 

this claim and refused to share the information considering the 

outcome is the same, and the ocean [freight] was indeed not paid 

for.” Exceptions, 10. Respondent’s assertion that the “separation 

between” Right Move and Michelle Franklin can easily be 

confirmed with a letter from an accountant misses the point entirely. 

Respondent shirked her obligation to provide information about 

Right Move’s corporate status in discovery and to submit relevant 

information on that point before the record closed. And she cannot 

undo her failure to meet those obligations now by suggesting that 

information she never provided to Complainant or submitted to the 

ALJ could readily establish that Right Move functioned as a separate 

corporate entity. 

As for the ALJ’s determination that Respondent 

commingled business and personal funds, Respondent explains that 

she opened a new account in a different bank in her name only 

because the documents required to open a business account were 

boxed up and not readily available to her. Exceptions, 14. 

Respondent states that she planned to convert the account to a 

business account once she located the required documents. Id. 

Respondent also asserts that Complainant’s payment was the only 

payment deposited to her personal account. Id. Respondent’s 

explanation does not refute the facts the ALJ relied on--even if this 

was an anomaly caused by switching banks and her inability to 

supply the documents needed to open a business account--the fact 

remains that Complainant’s payment was deposited into a personal 

account in her name. 

For all the reasons discussed above, the Commission finds 

Michelle Franklin personally liable for the § 41102(a) violation. 

33 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E. Reparations Award

The ALJ awarded Complainant reparations totaling 

$7,472.40 comprised of: (1) the shipping charges Complainant paid 

to Right Move ($2,595) (2) demurrage charges ($935); and (3) 

expenses for meals and lodging incurred while staying in Karachi 

($3,942.40). I.D., 33. Respondent challenges the reparations award 

as excessive and argues that Complainant is only entitled to ocean 

freight charges and five days of demurrage. Beyond that, 

Respondent argues, any expenses that Complainant incurred were 

due to voluntary decisions on his part or his unfamiliarity with 

maritime industry customs and norms. Exceptions, 3-4, 9-10. 

Complainant is entitled to reparations for the “actual injury” 

caused by Respondent’s conduct in violation of § 41102(a). 46 

U.S.C. § 41305(b). “If the complaint was filed within the period 

specified in section 41301(a) . . . [the] Commission shall direct the 

payment of reparations to the complainant for actual injury caused 

by a violation of this part.” Id. 

The reparations the ALJ awarded are the direct result of 

Respondent’s failure to pay the ocean freight charges and 

subsequent actions concealing that information and misstating the 

facts. Respondent caused Complainant to incur additional charges 

for demurrage by concealing the fact that Right Move had not paid 

the ocean freight and did not have the funds to correct that error and 

creating the false impression that she was in contact with an 

unnamed third party that would very shortly rectify the oversight 

and pay Troy. Those misrepresentations led to the shipment being 

held longer and increased the charges Complainant ultimately had 

to pay to retrieve his shipment and also lengthened his stay in 

Karachi and added to his expenses for lodging, meals and 

transportation to and from the port. See I.D., 8-12. Complainant’s 

claimed expenditures to retrieve the shipment and expenses incurred 

while staying in Karachi are substantiated by receipts included in 

the record. See Complainant’s App., Exs. 9-14 (receipts for charges 

 34 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

paid to CP World on. April 10, 2019, charges Complainant’s agent 

paid to Maersk, and receipt for 21 nights lodging from April 2-23). 

Respondent’s argument that Complainant is not entitled to 

the additional demurrage charges or other expenses because he is 

partially or wholly to blame for the container’s delayed release is 

meritless and unsupported. Respondent faults Complainant for not 

providing her with detailed information needed for a final bill of 

lading and criticizes him for his unfamiliarity with the port’s 

protocols and Pakistan’s customs requirements. See Exceptions, 4-

9 (criticizing Complainant for failing to understand shipping 

industry norms). The additional demurrage charges were the result 

of Respondent’s failure to pay Troy for the ocean freight charges, 

not Complainant’s alleged delay in providing details about the 

shipment. Troy/CP World placed a hold on the container because 

the ocean freight charges had not been paid, not because of issues 

with the bill of lading. Respondent also faults Complainant for not 

fully understanding the customs clearance process in Pakistan and 

planning accordingly. See Exceptions, 9. She argues, for example, 

that Complainant should have understood that a no objection 

certificate is a “regular process” and once he became aware of the 

delay caused by CP World’s hold on the container, should then have 

“plan[ned] 5 steps ahead” and extended the no objection certificate 

ahead of time, instead of “wait[ing] until the last minute and losing 

3 extra days over it.” Id. Respondent’s failure to pay the ocean 

freight thrust Complainant into the position of dealing with 

unanticipated challenges and delays in getting the container released 

and then navigating unfamiliar maritime industry standards and port 

protocols and Pakistan’s customs requirements while demurrage 

charges continued to accrue. So any additional delays or charges 

caused by those delays are still attributable to Respondent’s conduct 

in violation of § 41102(a). 

In a related argument, Respondent asserts that Complainant 

should bear responsibility for the demurrage charges because she 

warned him on April 5 that free time was limited and when it 

expired, demurrage charges would begin accruing. Exceptions, 5, 

35 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11. The demurrage charges resulted directly from Right Move’s

failure to pay the ocean freight charges and the hold that Troy placed

on the container to collect those charges. Respondent cannot shift

responsibility for its failure to pay the ocean freight to the

Complainant. Having already paid Right Move’s entire fee in

advance, Complainant had no legal obligation to pay twice for the

services Right Move contracted to provide. See Complainant’s App.

Ex. 3 (Respondent paid Right Move in full through a February 14,

2019 wire transfer for $2,595).

Respondent’s assertion that Complainant failed to approach 

her “in real time” for assistance in handling customs clearance 

procedures is also meritless. Respondent asserts that had 

Complainant contacted her, she would have been willing to assist 

him with clearing customs had he agreed to pay her another $300 

for Right Move’s “custom clearance option.” Exceptions, 9. 

Complainant was still dealing with the fallout from Right Move’s 

failure to provide the services he originally paid for. To suggest that 

he should have trusted Respondent again and paid Respondent an 

additional $300 for further services is unreasonable. Further, if 

Respondent is raising a more general objection and arguing that 

Complainant did not seek her assistance--that is clearly not the case. 

Complainant repeatedly and persistently sought Respondent’s help 

to get the container released and urgently requested proof of 

payment--all to no avail. Complainant did not have a continuing 

obligation to keep reaching out to Respondent and certainly not to 

pay her for additional services to speed the container’s release after 

he paid Troy to satisfy Right Move’s debt for the ocean freight 

charges. 

Respondent’s assertion that Complainant should not recover 

any expenses he incurred while staying in Karachi and negotiating 

the release of his shipment and that his presence there was voluntary 

is not supported by the record. Exceptions, 9-10. Complainant 

explains that he had to remain in Karachi to oversee the transfer of 

his household goods to the motor carrier he hired to transport them 

from the port in Karachi to Islamabad. Complainant’s Reply, 8; see 

36 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

also Complainant’s App., Ex. 41. Respondent’s assertion that the 

costs Complainant claimsfor lodging and meals are excessive is also 

unsupported. Exceptions, 19. Complainant’s claimed expenses are 

in line with the U.S. State Department’s foreign per diem for meals 

and incidental expenses for Karachi, Pakistan in April 2019. See 

I.D., 16 (Finding No. 86).

Respondent also contends that the inland transportation 

charges of $1,265 that Right Move paid should be deducted from 

the reparations award. Exceptions, 18. The ALJ justifiably denied 

that request, because Respondent did not introduce any supporting 

evidence and refused to provide discovery that might have 

substantiated her argument and proved the amounts that Right Move 

spent on inland transportation were excessive. I.D., 32. 

Finally, Respondent’s argument that Complainant can seek 

reimbursement under Right Move’s surety bond is not grounds for 

denying or reducing the reparations awarded by the ALJ. 

Complainant is entitled to reparations for his “actual injury” under 

46 U.S.C. § 41305(b) without regard to whether he might have a 

claim against Right Move’s surety bond. Further, it is not clear that 

relief would be available under the surety bond in any event, since 

Right Move’s license was revoked by the Commission in July 2019 

for failing to maintain a bond. 

For all the reasons discussed above, the Commission awards 

Complainant reparations in the amount of $7,472.40 (covering 

shipping charges paid to Right Move ($2,595), demurrage charges 

($935), and meals and lodging during Complainant’s stay in Karachi 

($3,942.40)) plus interest of $176.57, totaling $7,648.97. 

IV. CONCLUSION 

The Commission hereby: 

(1) affirms the Initial Decision in its entirety; 

 37 5 F.M.C.2d
 

 

(2) finds Respondent Michelle Franklin D.B.A. “The Right

Move,” Inc. and in her personal capacity in violation of §

41102(a); and 

(3) awards Complainant reparations in the amount of 

$7,472.40, plus interest of $176.57 totaling $7,648.97.

By the Commission. 

William Cody 

Secretary 

 38 5 F.M.C.2d
 

 

 

 

Chairman Daniel B. MAFFEI, concurring, with whom 

Commissioners BENTZEL and VEKICH join: 

I agree with the outcome of this case. I agree with the Administrative 

Law Judge’s use of discovery sanctions, the conclusion that the 

Respondent violated the elements of § 41102(a), the decision to hold 

the Respondent personally liable, and the award of reparations to the 

Complainant. I therefore vote to deny the Respondent’s exceptions 

to the Initial Decision and affirm the Initial Decision in its entirety. 

I take this opportunity to restate my belief that the Commission 

should re-examine our interpretation of § 41102(c).15

Although the holding of the case does not involve an interpretation 

of § 41102(c), this case exemplifies the concerns I have with our 

application of that statute. The Complainant, Mr. Rana, pursued his 

case pro-se and initially made a § 41102(c) claim. He stated that a 

cursory search of the internet revealed numerous complaints by 

consumers against the Respondent alleging fraud or deceit.16 He 

sought information about past complaints during discovery, but the 

Respondent failed to meaningfully participate in discovery and 

therefore Mr. Rana dropped the § 41102(c) claim due to a perceived 

inability to show that the claimed acts occurred on a “normal, 

customary, and continuous” basis as required by Commission’s 

current interpretation at 46 C.F.R. § 545.4(b). Footnote eight of the 

opinion importantly notes that had Mr. Rana continued with his § 

41102(c) claim, it is possible that sanctions against Respondent may 

have also allowed for an inference to prove the § 41102(c) claim. 

That would have been an appropriate outcome. 

While discovery obligations are a legitimate means for shippers to 

establish proof of a prohibited act, the Commission’s current 

interpretation of § 41102(c) sets the bar too high. The law says that 

15 See, e.g., Hangzhou Qianwang Dress Co., Ltd. v. RDD Freight Int’l Inc., 2 

F.M.C. 2d 168, 175-78 (FMC Sept 1, 2020); Gruenberg-Reisner v. Overseas

Moving Specialists, 34 S.R.R. 613 (FMC 2016). 16 See Complainant’s Supplement to Mot. for Entry of Default and Summary

Decision filed Sep. 10, 2019.

39 5 F.M.C.2d
 

 

 

 

 

a regulated entity “may not fail to establish, observe, and enforce 

just and reasonable regulations and practices.” From what we know 

about this case, the Respondent failed to observe and enforce 

reasonable practices with respect to Mr. Rana’s shipment. Yet Mr. 

Rana was discouraged from pursuing his initial claim because he did 

not believe he could show multiple violations or continuous 

behavior by the Respondent. In my view, such an interpretation 

removes an incentive for regulated entities to observe and enforce 

reasonable practices and is based not on the meaning of the words 

written in the statute, but a perceived interpretation of the 

congressional intent of those words as they were written and enacted 

106 years ago. 

40 5 F.M.C.2d
FEDERAL MARITIME 

COMMISSION 

FACT FINDING INVESTIGATION 29 

FINAL REPORT 

EFFECTS OF THE COVID-19 PANDEMIC ON THE 

U.S. INTERNATIONAL OCEAN SUPPLY CHAIN: 

STAKEHOLDER ENGAGEMENT AND 

POSSIBLE VIOLATIONS OF 46 U.S.C. § 41102(c) 

MAY 31, 2022 

41 5 F.M.C.2d
 

 

Table of Contents 

I. EXECUTIVE SUMMARY..............................................................................4 

Fact Finding Conclusions...............................................................................6 

II. FACT FINDING 29..........................................................................................8 

A. Background for Fact Finding 29 ....................................................................8 

B. Initial Order of Investigation........................................................................12 

C. Phase One – Innovation Teams....................................................................12 

1. Original Nine Supply Chain Innovation Teams.......................................14 

2. Commission Action - Service Contract Exemptions ...............................15 

3. Other Identified Challenges......................................................................16 

4. Ocean Common Carrier Innovation Team Meetings ...............................20 

5. Regional Innovation Teams......................................................................21 

a. Southern California Team ...................................................................21 

b. North Atlantic Team............................................................................23 

c. Gulf Coast Ports Team ........................................................................24 

6. Memphis Innovation Team ......................................................................25 

7. Other Approaches Considered..................................................................26 

D. Phase Two – Information Gathering............................................................27 

1. Supplemental Order..................................................................................29 

2. Fact Finding 29 Emails.............................................................................30 

3. Advice to the Trade ..................................................................................31 

4. Information Demands...............................................................................31 

a. Demurrage and Detention ...................................................................32 

b. Empty Container Return......................................................................33 

c. Earliest Return Dates...........................................................................37 

d. Innovation Ideas ..................................................................................38 

e. Container Availability .........................................................................38 

5. Supplemental Carrier and Marine Terminal Innovation Teams ..............39 

III. FACT FINDING OFFICER CONCLUSIONS FROM PHASE I 

AND PHASE II...............................................................................................40 

A. International Ocean Freight Pricing and Market Analysis ..........................40 

1. Background...............................................................................................40 

2. Commission Competition Enforcement and Shipping Act 6(g) 

Standard ...............................................................................................42 

3. Market Analysis........................................................................................44 

 42 5 F.M.C.2d
 

 

 

B. Detention and Demurrage ............................................................................45 

1. Interpretive Rule.......................................................................................45 

2. Information Demands...............................................................................46 

3. Enforcement of Interpretive Rule.............................................................46 

4. Need for Information on Which to Base Enforcement Actions...............47 

IV. COMMISSION ACTION: INTERM AND SUPPLEMENTAL 

RECOMMENDATIONS...............................................................................47 

A. Interim Recommendations ...........................................................................47 

1. Minimizing Barriers to Private Party Action ...........................................48 

2. Clarifying Commission and Industry Processes.......................................50 

3. Encouraging Assistance with Commission Investigation ........................52 

4. Bolstering CADRS ...................................................................................53 

B. Final Recommendations...............................................................................53 

1. New FMC Supply Chain Program ...........................................................55 

2. Rulemaking on Empty Container Return .................................................55 

3. Rulemaking on Earliest Return Dates ......................................................57 

4. Ocean Carrier and Marine Terminal Compliance Officers......................58 

5. Outreach Initiatives to Stakeholders.........................................................58 

6. Enhanced Interagency Cooperation for Agricultural Exporters...............59 

7. Commission Investigation into Tariff Surcharges and Other 

Charges ................................................................................................59 

8. Rulemaking to Define Merchant Haulage and Carrier Haulage ..............59 

9. New National Seaport, Marine Terminal, and Ocean Carrier 

Advisory Committee............................................................................59 

10. Rapid Response Team in Office of Consumer Affairs and Dispute 

Resolution Services .............................................................................60 

11. FMC Supply Chain Innovation Teams on Blank Sailings.......................60 

12. Memphis Supply Innovation Team ..........................................................61 

V. PATH FORWARD – MUTUALLY ENFORCEABLE 

CONTRACTS.................................................................................................61 

APPENDIX .............................................................................................................63 

 43 5 F.M.C.2d
I. EXECUTIVE SUMMARY

The Federal Maritime Commission (FMC or Commission) has a clear and 

compelling responsibility to actively respond to the challenges impacting the 

global supply chain and the American economy. Accordingly, on March 31, 2020, 

eighteen days after the President declared a national emergency concerning the 

coronavirus disease 2019 (COVID-19), the Commission launched Fact Finding 29 

(FF29). The Commission's Fact Finding Order appointed Commissioner Rebecca 

F. Dye as the Fact Finding 29 Officer and directed her to engage supply chain

stakeholders in public or non-public discussions to identify commercial solutions

to certain unresolved supply chain issues that interfere with the smooth operation

of the U.S. international ocean supply chain. In addition, it directed her to form one

or more FMC International Ocean Supply Chain Innovation Teams (Innovation

Teams), composed of leaders from commercial sectors of the U.S. international

ocean supply chain, to develop commercial solutions to port congestion and related

supply chain challenges.

Initially, the Fact Finding focused on convening new Innovation Teams to 

address the challenges facing the supply chain. As the challenges created by the 

COVID-19 pandemic evolved, Fact Finding 29 evolved, and over the course of the 

following two years, the Fact Finding 29 Investigation developed three distinct 

phases: 

• Phase 1 - Supply Chain Innovation Teams;

• Phase 2 - Information and Research; and

• Phase 3 - Commission Action.

In the early stages of the COVID-19 pandemic, Fact Finding 29 focused on 

using Innovation Teams to understand the most pressing supply chain challenges 

the United States was facing to find commercial solutions and when possible, and 

to eliminate regulatory requirements that had become burdensome. The goal was to 

work with stakeholders to identify both commercial and regulatory solutions and to 

disseminate helpful information to mitigate the challenges faced by all affected 

parties. 

 44 5 F.M.C.2d
During the first two phases, the Fact Finding Officer spoke to hundreds of 

U.S. importers, exporters, truckers, and others through virtual speeches, other 

virtual meetings, phone conversations, and emails. Three areas of most concern 

brought to the Fact Finding Officer's attention were: 1) the increase in the price of 

ocean shipping during the COVID-19 pandemic; 2) the ongoing unreasonable 

detention and demurrage charges and other charges imposed by ocean carriers, 

seaports, and marine terminals; and 3) the supply chain bottlenecks due to 

unresolved operational problems, including disruption of information concerning 

"blank sailings." 

When it became clear that these issues were the primary concern of 

stakeholders, the Fact Finding Officer pivoted to focus on investigating the state of 

the market for ocean liner services and the assessment and billing of detention and 

demurrage charges. The Fact Finding Officer also focused on whether regulated 

entities were complying with their regulatory obligations. Additionally, the Fact 

Finding Officer began to gather information to assist in developing specific interim 

and final recommendations to inform further Commission action. During this 

second phase, the Fact Finding Officer examined market conditions based on 

industry data and Commission programmatic information. The Fact Finding 

Officer also issued information demands to carrier and marine terminal operators 

(MTOs) regarding their demurrage and detention practices and other issues. 

In 2021, the Fact Finding Officer determined that, responsive to stakeholder 

concerns about the price of ocean services and problems with detention and 

demurrage charges, there were solutions that would address certain problems in the 

global ocean supply chain. These Interim Recommendations were organized 

around three principles: 

• Minimizing Barriers to Private Party Action;

• Clarifying Commission and Industry Processes; and

• Encouraging Assistance with Commission Investigations.

The Fact Finding Officer recommended a series of guidance documents, 

advice to the trade, other educational outreach, and a rulemaking to clarify 

Commission processes and encourage stakeholders to bring claims when 

warranted. 

 45 5 F.M.C.2d
Fact Finding Conclusions 

Based on information and research gathered during this second phase, the 

Fact Finding Officer has concluded that, using established antitrust analytical tools 

also used by our sister competition agencies (the Department of Justice and the 

Federal Trade Commission) - and notwithstanding certain misconceptions - the 

current market for ocean liner services in the Trans-Pacific trade is not 

concentrated and the Trans-Atlantic trade is only minimally concentrated. 

Competition among ocean common carriers, 1 among the three major alliances and 

among the members in each of these alliances, is vigorous. The market for ocean 

services remains highly contestable, particularly in the Trans-Pacific trade. Finally, 

the Fact Finding Officer concludes that although certain ocean transportation 

prices, especially spot prices, are disturbingly high by historical measures, those 

prices are exacerbated by the pandemic, an unexpected and unprecedented surge in 

consumer spending, particularly in the United States, and supply chain congestion, 

and are the product of the market forces of supply and demand. 

The Fact Finding Officer is concerned that certain ocean carriers, despite the 

actions of the new FMC Vessel-Operating Common Carrier Audit Program and 

recent compliance efforts are not in full compliance with the incentive principle of 

the Commission's Interpretive Rule on Demurrage and Detention. The Fact 

Finding Officer emphasizes that the Interpretive Rule on Detention and Demurrage 

promulgated by the Commission pursuant to Fact Finding 28 provides the shipping 

public with an enforceable principle that the Commission employs to assess the 

reasonableness of demurrage and detention practices and regulations under the 

Shipping Act of 1984, as amended. 2 The Interpretive Rule describes a nonexclusive list of factors the Commission may consider in evaluating claims and 

complaints that come before the agency under 46 U.S.C. § 41102(c) and 46 C.F.R. 

545 .4( d). The Incentive Principle of the Interpretive Rule developed pursuant to 

1 46 C.F.R. § 535.104(u) ("Ocean co1mnon canier means a common canier that operates, for all or pat1 of 

its common canier service, a vessel on the high seas or the Great Lakes between a p011 in the United 

States and a po11 in a foreign countty, except that the tenn does not include a common canier engaged in 

ocean transpo11ation by feny boat, ocean tramp, or chemical pai·cel-tanker."). 

2 The Shipping Act, the Foreign Shipping Practices Act, Section of the Merchant Ma1ine Act, 1920, and 

sections 2 & 3 of P.L. 87-777 were repealed. The text of those Acts was codified in in Subtitle IV of Title 

46, becoming positive law and they ceased to exist as freestanding stanites. 

 46 5 F.M.C.2d
"notice and comment," is enforced through the Commission's consideration of 

complaints and enforcement actions under section 41102(c) of Title 46, United 

States Code. 

The Fact Finding Officer is also concerned that the Commission lacks the 

regulatory tools to deal with the numerous new charges imposed on U.S. shippers 

and truckers by ocean carriers and marine terminals through tariffs and with other 

supply chain dislocations within the Commission's authority. Several final 

recommendations by the Fact Finding Officer address these concerns. 

Finally, based on the information gathered, the Fact Finding Officer further 

believes that the most productive path forward for shippers and ocean carriers alike 

would be to enter mutually enforceable and binding service contracts-- true 

"meeting of the minds" -- that are enforceable commercial documents. For some 

time, the Fact Finding Officer has been concerned that the contracts negotiated by 

many U.S. importers and exporters lack this mutuality of understanding and 

obligation and are not enforceable. Without enforceable contracts, shippers are 

unable to protect themselves from volatile shipping rates and ocean carriers have 

few forecasting tools to provide the shipping capacity necessary to serve their 

customers. 

As the Fact Finding Officer concludes Fact Finding 29, the Fact Finding 

Officer issues a series of Final Recommendations to further alleviate dislocations 

in the U.S. international ocean supply chain. These are: 

1. A new Commission "International Ocean Shipping Supply Chain Program"

with dedicated personnel.

2. A rulemaking to provide coherence and clarity on empty container return

practices.

3. A rulemaking to provide coherence and clarity on earliest return date

practices.

4. Continued Commission support for the new FMC "Vessel-Operating

Common Carrier Audit Program" including developing a new requirement

for ocean carriers, seaports, and marine terminals to employ an FMC

Compliance Officer.

 47 5 F.M.C.2d
5. An FMC Outreach Initiative to provide more infonnation to the shipping

public about FMC competition enforce1nent, service contracts, shippers

associations, and forecasting, among other topics.

6. Enhanced cooperation with the federal agency most experienced in

agricultural export promotion, the Department of Agriculture, concerning

container availability and other issues.

7. A Commission Investigation into practices relating to charges assessed by

ocean common carriers, seaports, and marine terminals through tariffs.

8. A rulemaking to provide coherence and clarity on merchant haulage and

carrier haulage.

9. A new "National Seaport, Marine Terminal, and Ocean Carrier Advisory

Committee" to work cooperatively with the Commission's National Shipper

Advisory Committee.

10. A revival of the Rapid Response Team program as agreed to by all ocean

carrier alliance CEOs.

11. FMC International Ocean Supply Chain Innovation Teams engagement to

discuss blank sailing coordination and other matters as needed to support

recommendations.

12. A reinvigorated focus on the extreme problems at Memphis rail heads and

around the country.

The Fact Finding Officer believes that the implementation of the Fact

Finding 29 Interim Recommendations and the implementation of the Fact Finding 

29 Final Recommendations will alleviate pressing problems experienced by 

Commission stakeholders and allow the Commission to achieve its objective of 

eliminating obstacles to a smooth and efficiently operating international ocean 

supply chain. 

II. FACT FINDING 29

A. Background for Fact Finding 29

In December 2019, The People's Republic of China (China) first identified 

cases of what would later be called "COVID-19" in the central city of Wuhan. The 

following month, the World Health Organization (WHO) declared the outbreak a 

 48 5 F.M.C.2d
public health emergency of international concern. Since then, the world has 

grappled with the many effects of the COVID-19 virus. 

One early, but dynamic, consequence of the outbreak of COVID-19 was its 

effect on the global ocean supply chain. 3 Originally, as the presence of the virus 

was largely limited to China, the global supply chain effects were primarily 

reactive to the impact in China. In late January 2020, Chinese authorities extended 

the Lunar New Year holidays nationwide4 and Chinese businesses told employees 

not to return to work. 5 The ensuing return to work delay, coupled with lack of

personnel mobility and traffic restrictions led to an initial difficulty in recovering 

production. 6 However, despite the isolated nature of these initial impacts, China's 

role and importance to global trade and, in particular, Wuhan's global significance, 

meant that even these relatively isolated restrictions were felt on a global stage. 

Responding to the outbreak in China, in the first 24 weeks of 2020, ship 

calls around the globe diminished by 8. 7 percent. 7 As the virus spread, individuals 

outside of China began voluntarily staying home and governments began imposing 

lockdowns. As lockdowns were imposed globally and fewer people were engaging 

in the economy, vessel calls fell even further, so that in the second quarter, the 

number of calls fell by 17 percent. 8

In May through August 2020, the three largest container shipping alliances 

(THE, 2M, and OCEAN) announced cancellation of 126 scheduled sailings 

3 Julianne Dunn, COVID-19 and Supply Chains: A Year of Evolving Disruption, Federal Rese1ve Bank of

Cleveland, Feb. 26, 2021 ("Supply chain disrnptions have been ever-present since the onset of the 

COVID-19 pandemic, but they've been largely idiosyncratic, impacting different films at different times 

for different reasons."). 

4 Reuters, China's cabinet to extend Lunar New Year holidays: state broadcaster, (Jan. 26, 2020), 

https://www.reuters.com/article/us-china-health-holidays/chinas-cabinet-to-extend-lunar-new-yearholidays-state-broadcaster-idUSKBNlZPOPO. (last visited May. 17, 2021). 

5 BBC Business, Coronavirus: Companies tell workers 'stay at home' (Jan. 27, 2020),

https://www.bbc.com/news/business-51260149, (last visited May. 17, 2021). 

6 Kilpatrick J., and Baiter L., COVID-19: Managing supply chain risk and di'iruption, Deloitte, 

llttps://www2.deloitte.com/content/dam./Deloitte/ca/Documents/finance/SupplyChain POV EN FINAL-AODA.pdf, (last visited May. 17, 2021). 

7 United Nations Conference on Trade and Development, COVID-19 and maritime transport: Impact and 

responses, Mar. 2021, https://m1ctad.org/webflyer/covid-19-and-maritime-transp01t-impact-andresponses, (last visited May. 17, 2021). 

8 Id.

FACT FINDING 29 - FINAL REPORT 

 49 5 F.M.C.2d
between Asia and North America, and 94 sailings between Asia and Europe. 9 It is

estimated that container lines ultimately canceled more than 1,000 voyages during 

the first six months of 2020.10

Coupled with the initial reduction in consumer demand was a dramatic 

increase in the demand for medical equipment, both for medical professionals and 

the general public. In February 2020, the World Health Organization assessed that 

demand for Personal Protective Equipment (PPE) increased 100 times higher than 

normal.11 In early 2020, most of the world's face masks were made in China, but 

as the virus spread through China, the government forbade their export and China 

began importing masks. 12

As the pandemic spread, the demand for PPE increased. Prior to 2020, the 

United States was importing more than 20% of its PPE. 13 Specialty PPE was even 

more dependent on imports with an estimated 90% ofN95 masks being 

imported. 14 Thus, while consumer demand decreased for certain consumer goods, 

the need for PPE dramatically increased. Ports and marine terminals struggled with 

identifying which imports contained the necessary PPE and which containers 

contained consumer goods. 

During the first half of 2020, there was a tremendous decrease in the demand 

for most goods, as countries worldwide went into lockdown. However, this decline 

did not last long. By summer 2020, demand for U.S. imports exploded. This was in 

9 Greg Knowler, Alliances outline extensive blank sailings for Q3, (Jun. 3, 2020),

https://www.joc.com/maritime-news/alliances-outline-extensive-blank-sailings-g3 2020060 3 .html, (last 

visited May. 17, 2021). 

10 U.S. International Trade Commission, The Impact of the COVID-19 Pandemic on Freight 

Transportation Serv

ices and US. Merchandise Imports, 

https://www.usitc.gov/research and analysis/tradeshifts/2020/special topic.html# ftnrefl 0. 

11 Lisa Schnining, WHO warns of PPE shortage; COVID pace slows slightly in China, (Feb. 7, 2020), 

https://www.cidrap.umn.edu/news-perspective/2020/02/who-wa111s-ppe-sho1tage-ncov-pace-slowsslightly-china, (last visited May. 17, 2021). 

1

2 Liz Alde1man, As Coronavirus Spreads, Face Mask Makers Go Into Overdrive, New York Times,

(Feb. 6, 2020), https://www.nytimes.com/2020/02/06/business/coronavims-face-masks.html, (last visited 

May. 17, 2021). 

13 Dai, T., Bai, G. & Anderson, G.F. PPE Supply Chain Needs Data Transparency and Stress Testing. 

Journal of General Internal Medicine 35, 2748-2749 (Jun. 30, 2020), https://doi.org/10.1007/sll606-020-

05987-9. 

14 Id. 

 50 5 F.M.C.2d
part because businesses had the opportunity to adjust to new safety protocols, but 

also because of the rapid growth of e-commerce as consumers turned to online 

buying in record numbers. 

The increased demand shocked the U.S. international ocean freight delivery 

system. By the fourth quarter of 2020, container lines were operating at nearly full 

capacity. 15 Blank sailings, which accounted for 21 percent of all voyages in May 

2020, declined to 1 percent by October 2020. 16 The number of shipping containers 

in circulation during the second half of 2020 was insufficient to meet higher than 

anticipated consumer demand for imports. 17 Exporters, particularly agricultural 

exporters, suffered from a lack of container availability due to constrained 

capacity. 

Soaring consumer demand for goods in the United States also led to record 

cargo volumes at major U.S. ports. The Port of Los Angeles, the Nation's largest 

port, reported the busiest September in its 114-year history. 18 Similarly, the Port of 

Virginia saw a dramatic increase in volumes with reported September 2020 

volumes 4.4 percent higher than September 2019. 19

Beginning in the fourth quarter of 2020, the United States and the world atlarge was faced with increased challenges as the COVID-19 pandemic and its 

effects disrupted our global ocean supply chain. Increased demand exposed 

existing problems in the international ocean supply chain, leading to extreme 

supply chain port and marine terminal congestion. 

15 Lazaro Gamio and Peter Goodman, How the Supply Chain Crisis unfolded, New York Times, (Dec. 5, 

2021), https://www.nytimes.com/interactive/2021/12/05/business/economy/supply-chain.html, (last 

visited May. 17, 2021). 

16 Id. 

17 Grego1y LaRocca, Rising Maritime Freight Shipping Costs Impacted by Covid-19, Office ofh1dustries 

U.S. hltemational Trade Commission, (Apr. 2021), 

https://www.usitc.gov/publications/332/executive b1iefings/ebot greg larocca freight costs weighing c 

ovid pdf.pdf. 18 Anslm Siripurapu, What Happened to Supply Chains in 2021 ?, Council on Foreign Relations, (Dec. 13, 

2021 ), https://www.cfr.org/article/what-happened-supply-chains-2021, (last visited May. 17, 2021). 

19 Ali Ashe, Port of Virginia marks strong recovery with record September, Journal of Commerce, (Oct. 

1, 2020), https://www.joc.com/port-news/us-ports/p01t-virginia/port-virninia-marks-strong-recove1yrecord-september-volume 20201001.html, (last visited May. 17, 2021). 

 51 5 F.M.C.2d
B. Initial Order of Investigation

During the first quarter of 2020, as the COVID-19 pandemic escalated in the 

United States and internationally, the Commission considered ways to respond to 

urgent cargo delivery dislocations in the U.S. international ocean freight delivery 

system. 

In the earliest days of the pandemic, import cargo volumes dropped 

precipitously and ocean carriers "blanked" sailings. Imports that were delivered 

contributed to congestion at U.S. ports, particularly on the West Coast, because the 

import cargo was not being picked due to business shutdowns. The congestion was 

further exacerbated by empty containers. 

On March 31, 2020, the Commission issued an Order authorizing 

Commissioner Rebecca F. Dye to identify operational solutions to cargo delivery 

system challenges related to the COVID-19 pandemic. 20 Among other things, that 

Order for Fact Finding 29, International Ocean Transportation Supply Chain 

Engagement, authorized the Fact Finding Officer to form multi-industry 

Innovation Teams to develop critical supply chain interventions. 

C. Phase One - Innovation T earns

In a press release, also issued on March 31, 2020, the Fact Finding Officer 

announced the intent to engage key executives to participate on new Innovation 

Teams. The press release also invited individuals wishing to provide information to 

Commissioner Dye to email ff29@fmc.gov. 21

The Commission's use of Innovation Teams was not a novel approach. The 

Fact Finding Officer had used similar authority in Fact Finding 28 22 and in the 

20 Order: futemational Ocean Transpo1tation Supply Chain Engagement, 85 Fed. Reg. 19146 (Apr. 6, 

2020). 

21 FMC Press Release: Commissioner Dye Leading FMC Initiative to Address Urgent COVID-19 Supply 

Chain Impacts, (Mar. 31, 2020),https://www.fmc.gov/dye-leading-fmc-initiative-address-urgent-covid19-supply-chain-impacts/. 22 See Fact Finding No. 28 Final Recommendation to the Commission, (Aug. 27, 2019)

https://www.fine.gov/wp-content/uploads/20l9/09/FF28Fina1ReportLetter.pdf. 

 52 5 F.M.C.2d
2015 Supply Chain Innovation Teams Initiative. 23 When refining this approach, 

the Fact Finding Officer consulted a variety of academic and business resources 

and experts in supply chain management, process innovation, transportation 

research, and business teams. The FMC Supply Chain Innovation Teams initiative 

focuses on three concepts: teamwork, international ocean supply chain operations, 

and incremental process innovation. 

The Innovation Teams consist of 5-12 members representing multiple 

industries who are committed to a shared goal - developing the best ways to 

improve international supply chain effectiveness, reliability, and resilience. 24

Effective T earn participants are dynamic industry leaders with extensive 

experience, broad perspective, and collaboration skills that allow them to think 

beyond their immediate company or industry interests ("step out of their silos") 

and take an encompassing view of the entire ocean supply chain system. 

In Fact Finding 28, after several months of information gathering, the Fact 

Finding Officer recommended that the Commission organize Innovation Teams 

composed of industry leaders who ultimately met on a limited, short-term basis to 

refine commercially viable demurrage and detention approaches. The valuable 

discussions with stakeholders during this phase of the investigation ensured that 

recommendations that resulted from Fact Finding 28 would be advantageous and 

workable. 

As in previous Innovation Teams, the teams organized under Fact Finding 

29 were composed of business leaders whose senior level positions included 

responsibility and influence over their companies' operations and who were 

positioned to implement recommendations developed by the Innovation Teams. As 

Fact Finding 29 was conducted during a period when travel and in-person group 

meetings were constrained by pandemic-related concerns, Fact Finding 29 Teams 

met virtually to focus on the changing dynamics that various ocean carriers, 

exporters, importers, shipping intermediaries, drayage operators, seaports, 

longshore labor, and marine terminals were experiencing. 

23 See FMC Supply Chain Innovation Team Initiative Final Report, (Dec. 5, 2017), 

https://www.fine.gov/wp-content/uploads/20l8/08/SCITFinalRepo1t-reduced.pdf. 

24 Id. at 5. 

53 5 F.M.C.2d
Initially, nine Innovation Team meetings with fifty-one participants were 

held. However, in the following months, the Fact Finding Officer would ultimately 

convene two additional groupings of teams. In sum, during this first phase, three 

types of teams met: 

• Original Nine Supply Chain Innovation Teams;

• Ocean Common Carrier T earns; and

• Regional Teams.

1. Original Nine Supply Chain Innovation Teams

When the Fact Finding Officer began the Fact Finding 29 investigation, 

consumer demand was down, and ocean carriers were cancelling a significant 

number of sailings. At the same time, there was a dramatic increase of demand for 

PPE. It was in this context that teams began meeting to identify commercial 

solutions to problems facing the ocean supply chain. 

The first nine multi-industry Innovation Teams met in mid-April 2020 and 

were presented with three basic questions25:

• What can the Federal Maritime Commission do to provide relief or

assistance to mitigate negative impacts on the international ocean supply

chain related to COVID-19?

• What can companies involved in ocean cargo delivery do to respond to

existing supply chain challenges and bottlenecks?

• What can supply chain actors do to strengthen the overall performance of

the American international ocean freight delivery system?

The goal of these initial meetings was to identify what actions could provide 

immediate relief to the most pressing challenges the American freight delivery 

system faces from COVID-19 related disruptions. The desire was not only to find 

actions the industry could take on a commercial level to mitigate problems, but 

also to identify what actions the Commission could take to provide relief. It was 

25 The Fact Finding Officer shared these three initial questions with the public in a press release and 

encouraged members of the public not paiticipating on a team, but who nonetheless wished to provide 

advice, to email FF29@FMC.gov. FMC Press Release: Fact Finding 29 Supply Chain Innovation Teams

to Begin Work, (Apr. 6, 2020), https://www.finc.gov/Fact Finding-29-teains-to-begin-work/. 

 54 5 F.M.C.2d
through these initial meetings that the Fact Finding Officer was able to identify and 

recommend Commission action in the form of service contract filing exemptions to 

alleviate the strain felt by shippers. The Fact Finding Officer was also able to work 

with carriers and terminals on their efforts to prioritize cargo. Additionally, 

through these meetings, the Fact Finding Officer was able to identify the four main 

issues that would becon1e a focal point throughout the investigation. 

2. Commission Action - Service Contract Exemptions

At that time, the Fact Finding was focused on identifying things the 

Commission could do to alleviate the challenges caused by the COVID-19 

pandemic. The first Team meetings were focused on what the FMC could do to 

provide relief and FMC assistance. 26

One of the early issues raised by shipper Team members was difficulty in 

filing service contracts. Many service contracts had May 1 or June 1 end dates, and 

some businesses were struggling to conduct contract negotiations while dealing 

with issues caused by COVID-19. Several Team members also indicated that stayat-home orders had resulted in a growing number of businesses working remotely. 

At the time, Commission regulations required that ocean common carriers 

file original service contracts with the Commission "before any cargo moves 

pursuant to that service contract."27 In contrast, the Commission's regulations 

provided more flexibility to service contract amendments, which could be filed 

within 30 days afier the amendment's effective date. 28

Acting on the recommendation of the Fact Finding Officer, on April 27, 

2020, the Commission issued a temporary blanket exemption extending the current 

filing flexibilities for service contract amendments to original service contracts. 29

This exemption allowed parties time to adapt to the increased pressures that have 

26 See 

27 46 C.F.R. §§ 530.S(a)(l), 530.14(a) (2019). 

28 See id. §§ 530.3(i), 530.8(a)(2), 530.8(b)(8)(i), 530.14(a). 

29 Order: Temporary Exemption from Certain Service Contract Requirements, 2 F.M.C.2d 65 (FMC 

2020). 

 55 5 F.M.C.2d
been placed upon them by COVID-19 and minimize disruptions to the contracting 

process. 

The Commission Order granting the exemption issued on April 27, 2020, 

was set to expire on December 31, 2020. On October 1, 2020, based on additional 

information from the Fact Finding investigation and stakeholder interest, the 

Commission issued an Order extending the exemption until June 1, 2021. 30

Following the positive response of Commission stakeholders to the temporary 

service contract filing relief, the Commission considered permanently establishing 

this exemption by amending its regulations. The Commission issued a Notice of 

Proposed Rulemaking (NPRM) on January 19, 2021, to make the exemption 

permanent. 31 The Commission received eight comments on its proposed rule and 

on April 23, 2021, issued a final rule making the exemption permanent. 32

3. Other Identified Challenges

Another challenge Innovation Team members identified was that the freight 

delivery system was struggling with prioritizing cargo so that urgently needed 

goods, especially personal protective equipment (PPE) and other medical 

equipment, would be given delivery priority. As noted previously, while general 

demand decreased in the first quarter of 2020, the demand for medical equipment 

dramatically increased. The challenge presented to the T earns was how to prioritize 

cargo that was urgently needed and what to do with cargo that was not currently in 

demand. 

Marine terminals advised that they would be better able to manage cargo 

flows if they had specific, timely, and accurate information from shippers about 

which shipments contained PPE, which containers shippers were prepared to pickup, and which containers shippers would not be able to pick-up and must be stored 

30 Order: Tempora,y Exemption from Certain Service Contract Requirements, Docket No. 20-06, 2020 

FMC LEXIS 206 (FMC Oct. 1, 2020). 

31 NPRM: Service Contracts, Docket 20-22, 86 Fed. Reg. 5106 (Jan. 19, 2021). 

32 Final Rule: Service Contracts, Docket 20-22, 86 Fed. Reg. 21651 (Apr. 23, 2021).

 56 5 F.M.C.2d
in off-dock storage. Some terminals had already set up hotlines or points of 

contacts by which shippers could identify containers containing PPE. 33

To foster the use of these methods of prioritization, on May 14, 2020, the 

Fact Finding Officer issued a press release that laid out steps shippers could take to 

mitigate COVID-19 impacts on the supply chain. 34 Specifically, the Fact Finding 

Officer informed shippers that MTOs could more effectively prioritize the 

movement of PPE cargo if they are better informed. The Fact Finding Officer 

encouraged shippers to share the following information with their MTOs: 

• Identify shipments that contain Personal Protective Equipment. These

commodities must move first and MTOs need to know which containers

to prioritize.

• Identify containers that shippers want to accept and can be prepared to be

picked-up. This cargo must be moved to make more space for incoming

shipments.

• Identify containers that shippers are not able to accept or pick-up.

Terminals can more effectively store cargo if they know a shipper is not

expecting to pick it up.

Ocean common carriers also stepped up in the early phases of the pandemic 

with innovative solutions to cargo that was not urgently needed. To avoid 

nonurgent cargo piling up at ports and slowing down the retrieval of urgently 

needed medical equipment, carriers offered to detour cargo destined for U.S. ports 

to other ports with available land for storage. Instead of charging demurrage or 

detention rates at U.S. ports, a much lower storage charge could be instead 

issued.35 

In the May 2020 press release, the Fact Finding Officer noted that there was 

a similarly short list of key steps ocean carriers could take related to increase the 

33 See Press Release: COVID-19 Critical Cargo Initiative, (Apr. 17, 2020), 

littps ://www.apmtenninals.com/en/Ios-angeles/pra ctical-infonna tion/news-and-alerts/supplier-letter. 34 FMC Press Release: Fact Finding 29 Innovation Teams Identify Information Helpful to Mitigating 

COVID-19 Impacts on Supply Chain, (May 14, 2020), https://www.finc.gov/Fact Finding-29-teamscovid-19-impacts-supply-chain/. 35 Many caniers instituted programs like this under various names including, "Suspension of Transit," 

"Detention in Transit," or "Delay in Transshipment." 

 57 5 F.M.C.2d
efficiencies of the freight delivery system. 36 These key steps involved four issues 

identified in the initial T earn meetings that offered the best chance to mitigate the 

challenges faced, including: 

• The impact of increased blanked sailings and skipped port calls;

• The impact of terminal closures and reduced hours;

• Confusion around ERDs and exporter cutoffs; and

• Increased difficulty in returning empty containers.

As noted previously, one of the first notable effects of COVID-19 on the 

supply chain was a dramatic decrease in cargo volume. Carriers responded to the 

decline in volume by blanking sailings or bypassing ports to keep vessel supply 

matched to demand. Responding to both the change in vessel calls and the decline 

in demand, some terminals determined that the reduced cargo volumes did not 

financially justify maintaining full gate hours. Marine terminals also noted a need 

to adjust to new safety protocols which also resulted in reduced hours or 

unexpected closures. 

A concern grew among truckers and agricultural exporters that ocean 

carriers and marine terminals were not conveying vessel and terminal changes 

effectively. This was especially frustrating for agricultural exporters whose cargo 

must take several days to reach a port in a timely manner. Agricultural exporters 

cited examples of their cargo being loaded onto trucks or rail only to be informed 

that the vessel on which they booked cargo was not arriving at that port. Similarly, 

drayage operators and shippers were frustrated with receiving last minute notice of 

terminal closures, which did not allow them to properly adjust their operations. 

Fluctuations in volumes impacted every aspect of the supply chain and 

subsequently nearly every aspect faced some level of disruption. Changes to 

terminal operating hours, vessel schedules, and reductions in available storage 

36 Id. ("Commissioner Dye believes there is a similarly short list of key steps ocean caITiers can take 

related to customer communications, business processes, and equipment logistics that will increase the 

efficiencies of the freight delive1y system"). 

 58 5 F.M.C.2d
space inevitably spilled over into conflicts with earliest return dates (ERDs) and 

exporter cutoffs. 37

As vessel schedules fluctuated, the dates and times terminals would begin 

accepting containers for exports fluctuated. Unfortunately, if this information was 

not communicated clearly or promptly, it could lead to shippers dropping off cargo 

too early or too late. This was particularly an issue for agricultural shippers, whose 

cargo may take several days to arrive at a terminal. Some agricultural shippers 

reported that their cargo was already in transit to the port when they were notified 

of a delayed ERD. Some truckers had to tum around and return the container to the 

shipper, while others had no option but to deliver the cargo early. Many inland 

shippers transport their cargo via rail and there was little that a shipper could do 

with a container on a rail line to stop the delivery of their container to the terminal. 

Furthering this frustration was a lack of clear guidance on where truckers 

and exporters could locate reliable ERD information. Exporters and truckers 

reported conflicting ERD information on marine terminal and ocean carrier 

websites. Without clear and accurate information, some frustrated exporters 

resorted to checking every available resource on vessel arrivals and were forced to 

predict cargo availability. 

Additionally, exporters and drayage operators routinely expressed frustration 

with untimely notice when carriers' empty containers were not being accepted at 

one terminal and drayage operators were directed to an alternative terminal. The 

complexity of the process is increased because carrier alliance members may call 

at multiple terminals. Not knowing which terminal may be accepting a particular 

empty container on a given day led some drayage truckers to book multiple 

appointments to ensure they had an appointment, further exacerbating process 

confusion. 

37 The earliest return date is the first day a tenninal will accept a container for expo1t and an expo1ter 

cutoff is the last day a terminal will accept a container for expo1t. If a container anives too early, it may 

be subject to additional storage fees and if a container anives to late, it may miss the vessel entirely and 

be rolled onto the next available vessel, incuning fees and penalties. 

 59 5 F.M.C.2d
4. Ocean Common Carrier Innovation Team Meetings

The initial meetings with the nine Teams helped identify key areas that 

offered the best chance for action to mitigate the challenges faced because of the 

pandemic. At the end of April 2020, building on the information gathered in the 

initial Team meetings, the Fact Finding Officer reached out for insight and 

cooperation of the major ocean carriers. Prior to these meetings, carriers were 

instructed to consider the four topics identified by the previous Innovation Teams 

as areas that offer a reasonable prospect for mitigation of the challenges the 

industry is facing. 

Four meetings were held between May 4, 2020, and May 7, 2020, during 

which all major ocean carriers participated. 38 Like all early Team meetings, these 

groups met virtually. During these meetings, the Fact Finding Officer discussed the 

four remaining issues identified by the initial nine teams: 

• Confusion around ERDs and exporter cutoffs;

• The impact of terminal closures and reduced hours;

• The impact of increased blanked sailings and skipped port calls; and

• Enhanced difficulty in returning empty containers.

With respect to ERDs, the Teams discussed the need for proactive 

communication and to ensure shippers have access to correct and current 

information. It was noted that this will require that carriers work with terminals to 

ensure the correct information is shared. In the event the dates conflict, one idea 

proposed by T earn members was that carriers could agree to abide by the 

information published by the terminal. This guarantee would eliminate confusion 

and give shippers confidence that the infonnation they rely on is correct. 

Team members also discussed how important it is that shippers have timely 

information about reduced terminal hours, terminal closures, blanked sailings, and 

bypassed ports. Due to the uncertainty present in the early stages of the pandemic, 

it was important that shippers and truckers were given sufficient notice of reduced 

terminal hours, terminal closures, blanked sailings, and bypassed ports so that they 

38 See Appendix for a list of team participants. 

 60 5 F.M.C.2d
could prepare. Based on conversations with members of the industry, 7-day notice 

for blanked sailings or terminal closures and 48-hour notice for bypassed ports 

could mitigate some of the problems shippers and truckers faced. All agreed that 

commercial solutions to this issue require carriers to work with marine terminals to 

ensure that proper notice is given. 

Lastly, during the meetings, Team members talked about the difficulties 

drayage operators and shippers have returning empty containers. Drayage 

operators expressed frustration about being denied access to terminals and being 

forced to travel to alternative locations to return empties. The group acknowledged 

that increased collaboration on this issue could result in improved clarity and 

efficiency. 

Following these meetings, the Fact Finding Officer routinely contacted the 

carrier participants to encourage progress and remain up to date on steps being 

taken to mitigate adverse effects on the supply chain. 

5. Regional Innovation Teams

As the volume and cargo handled at ports differ, so do terminal operations 

and local conditions. Conversations with team members during the first nine teams, 

and in the meetings with carriers, demonstrated a need for a regional approach to 

the next part of the Fact Finding investigation. The Innovation Teams 

recommended that the Fact Finding Officer create teams to discuss challenges by 

specific port range. That recommendation was adopted, and over the following 

months, the Fact Finding Officer conducted regional team meetings specific to 

challenges in Southern California, New York/New Jersey, and New Orleans. 

a. Southern California Team

The regional team discussions and interviews focused on the san1e four areas 

of concern that were identified in the earlier team meetings and included: (1) 

terminal gate closure notifications, (2) blanked sailings and bypassed port 

notifications, (3) export cargo receiving timelines (ERD), and ( 4) empty container 

returns (dual moves and chassis availability). Teams discussed the intricacies of 

these supply chain challenges and proposed ways to address them. 

 61 5 F.M.C.2d
Team members stressed that notice of terminal gate closures should be given 

no fewer than three days, and preferably seven days, before gate closings. At no 

time should a closure occur mid-shift. Advance notice of blank sailings should be 

given not only to beneficial cargo owners, but also be posted prominently on a 

carrier's website, at least seven days in advance. Notice of bypassed ports should 

be posted at least three days in advance. Finally, carriers and terminals should 

collaborate more closely regarding export cargo receiving timelines with the goal 

of eliminating conflicting or confusing information. 

With respect to empty container return practices, most Team members 

agreed that the ideal approach would be to direct drayage operators to return 

empties to the terminal where they had picked up the loaded container. This would 

potentially allow the drayage operator to complete a dual move and reduce the 

number of chassis required. Other suggestions included: 

• Terminals refraining from cutoffs of empty returns mid-shift;

• Terminals adopting a goal of 7 days advance notice, but no fewer than 24

hours, for empty cutoffs; and

• Terminals allowing appointment-free returns during low use periods

(such as night gates).

The above actions by carriers and terminals could help, but Team members 

also acknowledged that there are actions shippers and truckers could also take to 

mitigate supply chain issues. First, shippers or truckers should promptly cancel any 

unused multiple bookings and terminal appointments to reduce "no show" rates 

and related inefficiencies. 

Blank sailings, port bypasses, and cancelled services increase shipper 

uncertainty about space availability. Increased uncertainty can lead truckers to 

make multiple bookings and related tem1inal appointments that compound existing 

inefficiencies. Unused bookings and appointments thwart planning and result in 

under-utilization of scarce assets. As soon as a shipper or trucker is aware that its 

extra bookings or extra terminal appointments will not be used, they should 

immediately notify their lines and terminals so that others can take advantage of 

those opportunities. 

 62 5 F.M.C.2d
The approach and recommendations developed by this T earn were published 

on the Commission's website in the form of a press release. 39 This approach was 

used in future conversations with regional Teams and throughout the later stages in 

the Fact Finding. Following the close of these meetings, the Fact Finding Officer 

and staff assigned to Fact Finding 29, continued to engage key industry leaders in 

Southern California about the progress they made in implementing four approaches 

to immediately address these critical operational issues. 

b. North Atlantic Team

Following the success of the Team meetings on the West Coast, the Fact 

Finding shifted to concentrate on issues related to operations at the Port Authority 

ofNew York & New Jersey (PANYNJ) and surrounding facilities. For the North 

Atlantic region, three Teams consisting of drayage operators, terminal operators, 

shippers, intermediaries, and other parties critical to the movement of intermodal 

ocean cargoes through the PANYNJ facilities met in July 2020. These Teams 

discussed what operational adjustments will prepare the bi-state port complex for 

dealing with increasing cargo volumes. 

The Teams began their efforts by assessing which, if any, of the four 

operational challenges identified during the examination of the San Pedro Bay 

ports may be applicable in the port ofNew York and New Jersey. Team members 

were also tasked with identifying other operational challenges to efficient port and 

supply chain operations and developing commercial solutions to address them. 

Interviews with port users revealed that New York/New Jersey Port 

Authority leadership had responded effectively to the initial challenges that arose. 

Port users reported that because of this effort, facilities in the two states were 

working well. Especially helpful was the early and active intervention of port 

leadership with local and state governments. Also cited was the effectiveness of 

stakeholder cooperation under the Council on Port Performance (CPP). 

One common challenge identified was the need to make progress in 

returning containers in a manner that facilitates a "double move." Senior port 

39 FMC Press Release: Commissioner Dye Announces Findings of San Pedro Bay Discussions, (Jun. 17, 

2020), llttps :/ /www.fine.gov/collllnissioner-dye-am1ounces-findings-of-san-pedro-bay-discussions/. 

 63 5 F.M.C.2d
executives advised that achieving that goal was a high priority and the CPP was 

working to improve the process. 40 The Fact Finding 29 team members 

recommended greater ocean carrier participation in port performance discussions 

as a step toward achieving better drayage outcomes, especially in returning 

containers. 

In a press release dated August 4, 2020, the Fact Finding Officer revealed 

these findings and announced intent of shifting focus to the U.S. Gulf Coast. 41 The 

Fact Finding Officer and staff members supporting the Fact Finding effort 

continued to stay in touch with supply chain parties in the New York/New Jersey 

area to monitor and encourage improved efficiency and better communications. 

c. Gulf Coast Ports Team

The third region incorporated into Fact Finding 29 was the U.S. Gulf Coast 

with a particular focus on the Port of New Orleans. Aside from challenges arising 

from disruptive hurricanes, users of the Gulf Coast ports expressed concerns with 

port channels, barge traffic, blanked sailings, and bypassed port calls. Stakeholders 

at Gulf Coast ports also raised issues with demurrage and detention charges and 

new charges for terminal appointments to return empty containers. 

As rising cargo volumes increasingly put pressure on port and terminal 

performance, demurrage and detention charges increased. Shippers and trucking 

companies asserted that those increases often had little to do with creating effective 

incentives. They viewed such non-incentive charges as a forced subsidy for 

continued inefficiency. Again, as with the previous two regions, following the 

conclusion of the meetings, the Fact Finding Officer and staff remained in contact 

with stakeholders in the Gulf Coast region to monitor and encourage progress. 

40 In May 2021, however, two of the largest trucking organizations in the N011heast suspended 

their participation in the CPP, citing lack of canier action taken on CPP recommendations. 

41 FMC Press Release: Commissioner Dye Completes Work in NY & NJ, Turns Attention to New Orleans, 

(Aug. 4, 2020), https://www.finc.gov/comrnissioner-dye-completes-work-in-ny-nj-tums-attention-to-neworleans/. 

 64 5 F.M.C.2d
6. Memphis Innovation Team

The FMC Memphis Supply Chain Innovation Team (Memphis Innovation 

Team) was first established following the FMC Fact Finding Investigation 28 

meeting held in Memphis on May 15, 2018. This Team is comprised of shippers, 

ocean carriers, railroads, chassis pool contributors, and motor carriers, who 

volunteered to address the collective challenges in the Mid-South area in search of 

a better and more efficient supply chain process. Anything that is an unnecessary 

complicating factor adds confusion, delay, and unnecessary costs into the supply 

chain. Especially given extreme congestion involving ocean carrier haulage in rail 

heads during the pandemic, it is imperative that the Federal Maritime Commission 

and the Surface Transportation Board renew cooperation to alleviate this crisis. 

On May 22, 2019, Commissioner Dye appeared before the Surface 

Transportation Board (STB), to discuss the recommendations of the Memphis 

Innovation Team. During this meeting, a white paper on the team's efforts to 

improve supply chain velocity and fluidity at the rail ramps in Memphis and the 

Mid-South was submitted to the STB. 

One of the Fact Finding 28 recommendations, adopted by the Commission 

on September 6, 2019, was that the Commission continue to support the Memphis 

Innovation Team in its efforts to improve the performance of the international 

ocean container freight delivery system. 42 As a result, additional meetings were 

held in Washington D.C. on December 20, 2019, and January 22, 2020. Another 

meeting was held virtually on August 11, 2021. A recording of the meeting can be 

viewed online at: 

https://www.dropbox.com/s/z7zhgorehl7yaln/FMC 2021.wmv?dl

=0. 

The white paper authored by the Memphis Innovation T earn articulates the 

essential qualities of a high performing grey chassis pool that is essential for 

efficient chassis provisioning in the rail heads in Memphis. The qualities 

articulated in the white paper not only are essential for chassis provisioning in rail 

heads in Memphis, but also in other rail facilities and seaports around the country. 

42 Fact Finding No. 28 Final Recommendation to the Commission, (Aug. 27, 2019), 

https://www.fine.gov/wv-content/uploads/2019/09/FF28Fina1ReportLetter.pdf. 

 65 5 F.M.C.2d
A copy of the white paper can be viewed online at: https://www.fmc.gov/wpcontent/uploads/2019/05/MemphisSupplyChain Whitepaper .pdf. 

The expertise the Commission has developed surrounding the international 

ocean supply chain gives the Commission a unique perspective on the extreme 

equipment dislocations that occur in Memphis rail heads, other rail facilities, and 

seaports around the country. The problems that exist in Memphis are worsening. 

This is a matter of national significance and must be addressed for the United 

States to increase the performance of our international ocean supply chain. The 

Fact Finding Officer strongly recommends a reinvigorated focus on the critical 

equipment dislocations in Memphis and in other rail facilities and seaports around 

the country. 

7. Other Approaches Considered

The Fact Finding Officer sought out ideas from the public and other 

organizations that presented ideas for alleviating challenges to the issues facing the 

international ocean supply chain. One such approach was developed by the 

Council on Port Performance (CPP). Established in June 2014 and led by the Port 

Department Director at The Port Authority of New York and New Jersey 

(P ANYNJ) and the President of the New York Shipping Association (NYSA), the 

CPP provides guidance on programs and initiatives to improve efficiency and 

reliability at the Port of New York and New Jersey. 43

At the request of the CPP, a working group of ocean carriers, trucking 

companies, marine terminal operators, shippers and third-party depot operators was 

formed to address growing concerns over empty container handling at the Port and 

to identify potential improvements to the current processes. The Empty Container 

Working Group's discussions centered on ways to increase efficiencies through 

enhanced communications and advanced notifications. The group's 

recommendations were presented to the CPP at their August 27, 2021, meeting and 

were overwhelmingly approved and endorsed by the Council. 

43 C01mcil on Pott Perfo1mance, Port of New York and New Jersey, https://wv1w.panynj.gov/po1t/en/ourport/c01mcil-on-po1t-perfonnance-.htmL (last visited May 17, 2022). 

 66 5 F.M.C.2d
The group recommended that dual transactions should be exploited as often 

as possible, and truckers should be directed to return empties to the terminal where 

they were picked up. If this is not possible, the Empty Container Working Group 

identified other steps that marine terminal operators and ocean common carriers 

can take to improve the empty container return process: 

• All terminals, depots, and carriers should publish the next day's empty

container return information no later than 1 :00 PM daily; and

• If the return location changes overnight, truckers should not be turned

away from a terminal or depot with an empty of the type that was

identified as allowable on the return information published the day

before.

There were additional suggestions that were presented to further achieve 

efficiency with empty container handling once the initial recommendations were 

addressed. These included: 

• Terminal and carrier computer systems should be synchronized;

• Carrier customer service hours should be aligned to terminal and depot

hours of operation;

• Terminals that typically require appointments should allow appointmentfree empty returns during low use periods;

• Off terminal depots should limit the number of carriers directing empties

to the same location in a single day;

• Off-hire boxes should automatically be given extra time (i.e., 10 days) to

allow scheduling for delivery to locations outside of the port district; and

• Ocean carriers should hire a drayage trucker to reposition empties where

their business needs direct them to be, rather than imposing this task, that

was not contractually negotiated, onto the motor carrier.

This approach was presented to later Fact Finding 29 Team members and 

used to develop ideas for commercial solutions. 

D. Phase Two - Information Gathering

Fact Finding 29 transitioned into its second phase in November 2020. During 

the first and second phases of Fact Finding 29, the Fact Finding Officer held over 

 67 5 F.M.C.2d
20 team meetings with 80 different participants representing shippers, carriers, 

ports, terminal operators, ocean transportation intermediaries, drayage providers, 

and trade associations. The Fact Finding Officer also spoke to hundreds of 

stakeholders through virtual speeches, meetings, phone conversations, and emails. 

Throughout the process, both the Fact Finding Officer and Commission staff 

assigned to the Fact Finding routinely followed-up with Team participants and 

stakeholders in the areas reviewed above. These frequent check-ins with Team 

members located in key areas of the United States allowed the Fact Finding Officer 

to stay abreast of changes in the challenges and, on some occasions, to witness 

improvements. 

While the industry continued to struggle with some issues, during the Fall of 

2020, Team members noted improvement with some of the key issues identified 

early in the Fact Finding and two of the original four issues identified in the initial 

team meetings had greatly dissipated by the end of 2020. 

In the early stages of the pandemic, blanked sailings were a significant issue 

on the west coast and in some southern Atlantic ports. As the months progressed, 

check-ins with Innovation Tea1n members revealed improvement on this issue. 

However, the Fact Finding Officer remains concerned that blank sailings are 

interfering with customer service and recommends Innovation Team meetings to 

develop coherent blank sailing processes. 

Similarly, in the early stages of the pandemic, there were significant issues 

with terminal closures and reduced hours. However, over the following months, 

issues with unexpected terminal closures also diminished, in part because the 

industry adjusted to new volumes and in part because safety and health procedures 

were standardized and normalized. In cases where there was still disruption to 

terminal schedules, shippers and drayage operators noted that timely conveyance 

of this information had improved. 

Other issues, however, remained outstanding and, in some cases, 

deteriorated. Stakeholders using the Port ofNew York and New Jersey, the Port of 

Los Angeles, and the Port of Long Beach expressed growing concern with carrier 

practices regarding shifting ERDs, the return of empty containers, export cutoffs, 

and how these issues were leading to increased demurrage and detention invoices. 

 68 5 F.M.C.2d
Some stakeholders also stated that increasingly, demurrage and detention charges 

were not being administered in a manner consistent with the Incentive Principle as 

articulated by the FMC's Interpretive Rule under section 41102(c) of Title 46, 

United States Code. 

1. Supplemental Order

Based on inforn1ation obtained in the Fact Finding and coverage in the trade 

press, the Commission began growing increasingly concerned that vessel-operating 

common carriers in alliances who call on the Port of New York and New Jersey, 

the Port of Long Beach, and the Port of Los Angeles may be employing practices 

and regulations that violate 46 U.S.C. § 41102(c). 

Acting on this concern, on November 20, 2020, the Commission approved a 

Supplemental Order for Fact Finding 29. 44 The Supplemental Order emphasized 

the Commission's concern with reports coming out of the Port of Los Angeles, 

Port of Long Beach, and Port ofNew York and New Jersey, and endorsed the 

efforts by the Fact Finding Officer, under the authority existing in the March 31, 

2020 Order, to investigate whether alliance carriers who call on those ports were 

employing practices or regulations in violation of§ 41102(c). 45 The Supple1nental 

Order identified three issues in particular that warranted additional scrutiny, 

especially given the rapid increase of trade volumes. These issues included: 

• Container return practices - in particular, practices that impact the

efficient drayage of empty containers to marine terminals for carrier

pickup;

• Demurrage and detention practices - specifically whether carriers'

policies, practices, and procedures align with the principle, central to the

Commission's Interpretive Rule on demurrage and detention, that

detention and demurrage charges and policies should serve the primary

purpose of incentivizing the movement of cargo and promoting freight

fluidity; and

44 Order: International Ocean Transportation Supply Chain Engagement - Possible Violations of 46 

U.S.C. § 41102(c), (Nov. 19, 2020). 

45 Id. at 2. 

 69 5 F.M.C.2d
• Practices related to container availability for U.S. exports - in

particular, reports that carriers were declining to ship U.S. agricultural

commodity exports.

The Supplemental Order signaled a transition in the focus of the Fact 

Finding 29 investigation. The initial focus in Fact Finding 29 was on commercial 

solutions. 46 This Supplemental Order signaled a shift in focus and an intensified 

effort to gather information and act on violations of the Shipping Act of 1984, as 

amended. As noted in the Supplemental Order, "the Fact Finding Officer's 

authority includes the ability to issue ... compulsory information demands under 46 

U.S.C. § 40104."47

2. Fact Finding 29 Emails

In the first Fact Finding 29 press release, the Fact Finding Officer stated that 

"individuals wishing to provide information to Commissioner Dye may do so by 

writing to ff29@fmc.gov."48 During the first phase of the Fact Finding, most of 

these emails were either individuals wishing to participate in teams or offering to 

share general news or information. 

When the Commission issued its Supplemental Order announcing a focus on 

potential violations of the Shipping Act, individuals began using this email address 

to report potential violations. Commission staff assigned to Fact Finding 29 sorted 

through and categorized these emails. 

The most common concern received in the FF29 email inbox involved 

demurrage or detention charges resulting from an inability to return containers. 

Issues involving confusion or problems with earliest return dates or export cutoffs 

also made up a significant number of emails received. These emails were 

ultimately forwarded to the FMC's Bureau of Enforcement (BOE) and the 

46 85 Fed. Reg. 19146 at 19147 (Apr. 6, 2020).

41 Id. 

48 Press Release: Commissioner Dye Leading FMC Initiative to Address Urgent COVID-19 Supply Chain

Impacts, (Mar. 31, 2020) https://www.fmc.gov/dye-leading-fmc-initiative-address-urnent-covid-19-

supply-chain-impacts/. 

 70 5 F.M.C.2d
Commission's area representatives where they were evaluated for potential 

enforcement action. 

3. Advice to the Trade

In addition to the information demands issued in early 2021, the Fact 

Finding Officer also solicited information from the public regarding alleged 

violations. On December 17, 2020, shortly after the issuance of the Supplemental 

Order, the Fact Finding Officer issued a press release titled, "Fact Finding 29: 

Advice to the Trade." In this press release, the Fact Finding Officer advised 

shippers and drayage operators to contact the FMC's Bureau of Enforcement 

(BOE) with allegations of ocean carriers and marine terminal operators employing 

practices or regulations in violation of 46 U.S.C. § 41102(c).49

The Fact Finding Officer advised that shippers and truckers could contact 

the BOE with allegations of ocean carriers and marine terminal operators 

employing practices or regulations in violation of 46 U.S.C. § 41102(c) involving 

non-compliance with the Final Rule published earlier this year by the agency that 

addresses detention and demurrage. Reports of allegations should typically be 

directed to area representatives; however, to facilitate the irmnediate need and gain 

understanding of the issues, individuals with specific allegations of behavior that 

violates 46 U.S.C. § 41102(c) were instructed to submit their complaint and 

supporting evidence to the BOE by writing boe@fmc.gov. 50

4. Information Demands

The Supplemental Order reemphasized that "the Fact Finding Officer's 

authority includes the ability to issue compulsory information demands under 46 

U.S.C. § 40104." 51 On February 17, 2021, in an additional effort to gain 

information on the practices of carriers and terminals and to determine if legal 

obligations related to detention and demurrage practices were being met, the Fact 

49 FMC Press Release: Fact Finding 29: Advice to the Trade, (Dec. 17, 2020), https://\\'WW.fmc.gov/Fact 

Finding-29-advice-to-the-trade/. 50 This email address was provided in pa1t to curb the ongoing emails being sent to ff29@fmc.gov. 

Despite this press release however, the FF29 inbox continued to receive email complaints which were 

forwarded to BOE. 

51 85 Fed. Reg. 19146 at 19147. 

 71 5 F.M.C.2d
Finding Officer announced that information demands would be issued to ocean 

carriers and marine terminal operators (MTOs). 52

On March 8, 2021, the Fact Finding Officer served 26 Information Demand 

Orders. 53 The information demands sought additional information on a variety of 

subjects including empty container return and ERDs, two of the original four issues 

identified by the early work of the Innovation Teams. These information demands 

resulted in thousands of pages of answers and documents. Commission staff 

reviewed and categorized the information received and, on several occasions, 

sought clarifying information from carriers and MTOs. 

The information demands covered a variety of subjects related to demurrage 

and detention and export procedures. For example, the information demands 

inquired on system changes in light of the Interpretive Rule on demurrage and 

detention charges, empty container return practices, earliest return date practices, 

and ideas for innovation and improvement. The information demands also 

requested information about export container availability and to ensure that the 

Fact Finding Officer was fully informed on agricultural export issues, a letter was 

also sent to the carriers providing them with the opportunity to respond to these 

complaints and media reports in May 2021. 

a. Demurrage and Detention

The information demands asked questions on how carriers and MT Os 

changed their practices or policies on demurrage and detention since the issuance 

of 46 C.F.R. § 545.5. Many identified actions included clarifying terminology and 

procedures on websites, providing more information, simplifying dispute 

resolution policies, and making practices more consistent with the Interpretive 

Rule on Demurrage and Detention. Several others noted changes to their 

calculation metrics, such as, which days count toward free time. 

The information demands also asked questions on how demurrage and 

detention was collected since the issuance of the Interpretive Rule. Unfortunately, 

52 FMC Press Release: Information Demand on Detention & Demurrage Practices to Be Issued, (Feb. 17, 

2021), l1ttps://www.finc.gov/infonnation-demand-on-detention-de11nmage-practices-to-be-issued/. 

53 In total, 26 orders were se1ved seeking information from 10 ocean common carriers and 16 MT Os. 

 72 5 F.M.C.2d
evaluating the impact of the Interpretive Rule proved difficult in reviewing the 

information demands. The issuance of the Interpretive Rule on Demurrage and 

Detention coincided with the COVID-19 pandemic lockdown in the United States. 

This makes it challenging to disentangle the effects of the Interpretive Rule from 

the effects of the pandemic. Most carriers and MTOs do not track free time 

extensions granted, and thus, it was difficult to evaluate how carriers and MTOs 

mitigated demurrage and detention. 

b. Empty Container Return

Commission concerns about empty container returns are not new. In the 

Commission's 2019 Notice of Proposed Rulemaking on demurrage and detention, 

the Commission stated that under the "incentive principle," if empty containers 

cannot be returned due to a lack of appointments, demurrage and detention cannot 

incentivize equipment return. 54 The Commission went on to propose that "[ a ]bsent 

extenuating circumstances, practices and regulations that result in detention being 

imposed when a container cannot be returned weigh heavily in favor of a finding 

of unreasonableness." 55 The Commission reiterated these principles in its final rule 

on demurrage and detention, which states that: "Absent extenuating circumstances, 

practices and regulations that provide for imposition of detention when it does not 

serve its incentivizing purposes, such as when empty containers cannot be 

returned, are likely to be found umeasonable." 56

However, trucker complaints about difficulties in timely returning empty 

containers persisted after the Commission published its Interpretive Rule and 

increased in light of supply chain disruptions associated with the CO VID-19 

pandemic. The information demands sought information from carriers and 

terminals on notification processes for empty container return and impediments to 

empty container return. Specifically, how much notice is given regarding return 

policies and what happens when inadequate notice is given. These two areas were 

54 NPRM: Interpretive Rule on DemUirnge and Detention Under the Shipping Act, 84 Fed. Reg. at 48852 

(Sept. 17, 2019). 

55 Id. at 48853 ("imposing detention in situations of U11co1nmunicated or untimely collllllUilicated changes 

in container return location also weighs on t11e side of unreasonableness, as nlight doing so when there 

have been uncommunicated or untimely commmlicated notice oftenninal closures for empties"). 

56 46 C.F.R. § 545.S(c)(2)(ii). 

 73 5 F.M.C.2d
identified in both the Team meetings in 2020 and through follow up conversations 

with stakeholders. 

1. Empty Container Return Notification

During the T earn meetings, drayage operators and shippers raised concerns 

over the notice provided about where to return an empty container. Reported 

frustrations included receiving last minute notice of changes to which terminals 

were receiving empties and difficulty in determining where to return empties. 

Some even claimed that there were periods where no return location would be 

available at all. 

Through the information demands, the Fact Finding Officer sought to 

determine whether carriers were operating under standard practices and what was 

preventing notice from reaching its intended audience. MTOs largely said that they 

were not in a good position to provide information about the processes of empty 

container return because containers are carrier equipment, not terminal equipment, 

and detention charges are imposed by carriers, not MTOs. Furthermore, they stated 

that carriers determined when to begin and when to stop receiving equipment. 

Carriers generally acknowledged their responsibility, but the answers 

demonstrated regional approaches for dealing with notifying drayage operators and 

shippers of return locations. Operations on the east coast typically relied on the 

terminals to notify shippers and drayage operators of changes to return locations. 

On the west coast, carriers relied on processes like E-Modal or Pier PASS to notify 

shippers or drayage operators of return locations or changes to return location. In 

addition, west coast MTOs generally broadcast empty container return information 

on their website, terminal system, or through blast email notifications. 

Every ocean carrier who received an information demand stated that it 

provides notice to the terrninal57 by at least 4:00 pm the day before and many 

claimed to provide even more notice, including giving several days' notice of 

return locations. This 4:00pm deadline is derived from the Uniform Intermodal 

Interchange and Facilities Access Agreement (UIIA) which requires that carriers 

57 As noted above, the canier then relies on the terminal to broadcast this info1mation. 

 74 5 F.M.C.2d
post container return locations by 4:00pm the day prior. 58 Additionally, the UIIA 

states that the default equipment return location is the location at which it was 

picked up, unless the carrier directs otherwise. If a carrier does not provide notice 

of return location by 4:00pm, the UIIA provides that a trucker is entitled to one 

extra business day to return equipment. 59

ii. Empty Return Impediments

In their responses, carriers acknowledged that there are instances where they 

are unable to provide notice of empty container return information by 1 :0Opm or 

4:00pm. They also acknowledged that there may be situations where there are no 

available empty container return locations, but universally stated that multiple days 

without return locations are rare. As noted above, in these cases, the UIIA would 

require the extension of free time. When this happens, carriers stated that 

additional free time is granted on a case-by-case basis. 

Every carrier stated if a party wishes to dispute a detention charge incurred 

because no return locations were available, they do not need to pay that charge 

first. Every carrier also claimed to grant free time extension when return locations 

are unavailable on a case-by-case basis. This case-by-case language was common 

in answers regarding disputes and demonstrated that in terms of resolving issues, 

there is a wide range of approaches carriers take. 

For example, MTOs were asked what would happen if a drayage operator is 

in line to return a container only to have the return location change. MTOs 

presented two different solutions. Some said they would issue a trouble ticket and 

the trucker would need to dispute any charges with the carrier. Others said they 

would honor the appointment regardless. 60 These responses not only demonstrated 

58 Uniform Intennodal Interchange and Facilities Access Agreement,§ E,1, b ("Whenever a return 

location is changed, Provider must notify the Motor Cai1ier by e-mail by 16:00 p.m. local time the 

business day prior to the change becoming effective."). 

59 Id. at § E. l .d ("Should the notification required under subsection 1.b. above not be made one (1) 

business day prior to the effective date of the change, and the late notification delayed the Interchange of 

Equipment, then the Motor Canier would be entitled to one (1) additional business day to return the 

Equipment."). 

60 Still others avoided the question entirely and said such a siUlation never happens. 

 75 5 F.M.C.2d
the variety of approaches operators take, but also provided insight into the need for 

greater coherence of operational processes concerning empty container return. 

Most MTOs said that they have no control over container detention charges 

or free time extensions related to empty container returns. However, some of these 

MTOs indicated that they will accept an empty return if the trucker has a 

confirmed appointment. Others said they could only issue a trouble ticket so that 

the drayage operator had proof of the issue when disputing detention charges with 

a earner. 

The information demands also asked for policies and procedures regarding 

the use of dual moves. Commission stakeholders from all aspects of the industry 

have repeatedly spoke of merits of dual moves and they have been widely 

recognized as a solid method of alleviating congestion. In situations in which a 

drayage operator does not have a dual move and they are required, dual moves can 

be an impediment to the return of an empty container. Thus, the Commission has 

strongly encouraged the use of dual moves, while allowing flexibility for truckers 

to return an empty if a dual move is not possible. 

While most MTOs allowed dual moves, few had programs or policies that 

actively encouraged or incentivized their use. Of the MTOs that did encourage dual 

moves, a common method of encouraging or incentivizing dual moves involved 

easing or removing appointment requirements for dual moves. One MIO said that 

it would accept empties even if was over a carrier's quota or it was part of a dual 

move. Nearly all MTOs stated that they recognized the benefits of dual moves. 

In sum, the information demands shed some light on the frustration shippers 

and drayage operators noted regarding notice of where and when empty containers 

can be returned. It appears that there is a lack of consistency across the United 

States with respect to the return of empties and it is not always clear who is 

responsible for communicating return locations. While carriers are taking strides to 

communicate the infonnation to shippers and drayage operators, there re1nains a 

disconnect over who is ultimately responsible for sharing the correct information 

and how timely the information is shared. 

 76 5 F.M.C.2d
c. Earliest Return Dates

One enduring issue for exporters throughout the Fact Finding was with 

Earliest Return Dates (ERDs). The information demands asked how carriers 

provided notice to exporters/drayage truckers of blanked sailings, bypassed ports, 

or changes to earliest return dates, and how carriers mitigated the effects of those 

events to exporters and drayage truckers. MTOs were similarly asked whether they 

post information about earliest return dates and vessel schedules on their website. 

Though all carriers claimed that they communicated vessel schedule or ERD 

information to their customers, as with empty container return, responses indicated 

a large array of methods being employed to communicate information. 

A relatively small number of carriers stated that they do not actively notify 

shippers of changes, instead, these carriers rely on shippers and drayage operators 

to check the carriers' websites to determine if any changes have taken place. Some 

carriers distinguished ERD issues from blanked sailing or bypassed port issues and 

said for ERD concerns, customers need to check with MTOs. 

In contrast, other carriers send push notifications or other form of active 

notice to customers when there are changes to vessel schedules or ERDs. One 

carrier said, in addition to website updates and push notifications, it also sends 

emails describing and explaining any changes to ERDs. In addition to enhanced 

notification systems, two carriers also provide updated bookings in the event there 

is a blanked sailing or bypassed port. These carriers will automatically update 

bookings and make alternative plans for shipments already confinned for the 

vessels impacted by blanked sailings or bypassed ports. MTOs uniformly stated 

that they post information about vessel schedules on their websites, but that this 

information comes from the carrier or is based on information provided by the 

carrier. 

All carriers said that they would mitigate export demurrage or detention 

charges caused by changes in vessel schedules and ERDs. About half 

automatically account for vessel schedules or ERD changes in assessing demurrage 

and detention and will preemptively extend free time or waive demurrage or 

detention without issuing an invoice and without requiring additional action by the 

shipper or trucker. Other carriers said that they required the customer to act before 

 77 5 F.M.C.2d
mitigating charges related to schedule changes. Most carriers will extend free time 

by the same number of days the vessel schedule is delayed. 

These findings suggest a variety of methodologies being employed to 

communicate ERD information to shippers and truckers and supports the need for 

greater clarity in ERD practices. 

d. Innovation Ideas

Finally, carriers were also asked what other solutions (e.g., container depots, 

collapsible containers, or new carrier offerings) could improve the availability of 

containers for exports. Many carriers suggested the use of container depots which 

could mitigate some of the bottlenecks currently experienced. A few others 

discussed a need for increased supply, including increased container supply or 

increased rail capacity. Some also noted innovative ideas such as collapsible 

containers which would allow multiple empty containers to be loaded on a vessel. 

Carriers also had suggestions for things that shippers, truckers, and MTOs 

could do to improve container flow. These included, for example, shippers pooling 

facilities to facilitate export loading; increasing the size and operating hours for 

distribution centers and terminals; and improving technology. 

e. Container Availability

Questions about the availability of containers for export and, in particular, 

agricultural exports, were asked through the information demands and additional 

letters sent to carriers. Carriers emphasized that the driver of cargo from Asia to 

the U.S. is a demand surge from U.S. consumers. Consequently, carriers stated, 

they must reposition equipment from the U.S. to Asia to meet their contractual 

obligations to U.S. importers. Many carriers reported that exports increased from 

2019 to 2022. Some carriers further suggested that because of exceptional 

conditions caused by the COVID pandemic, there were competing demands for the 

same empty container supply. One carrier noted the historically peak import season 

(August-October) does not coincide with peak agricultural export season 

(November-March). But in 2020 and the beginning of 2021, import peak volumes 

were sustained beyond traditional peak periods, which changed network 

calculations. 

 78 5 F.M.C.2d
Carriers stated that they do not fill their ships entirely with loaded export 

containers on the backhaul voyage from the U.S. to Asia. This is in part due to 

safety considerations, commercial considerations, and congestion considerations. 

Many carriers noted that because agricultural exports are relatively heavy, they 

must be balanced with containers loaded with lighter cargo or with empty 

containers. 

5. Supplemental Carrier and Marine Terminal Innovation Teams

There were four primary issues initially identified by the original nine 

Teams. Of these four, two were resolved in the first phase of the Fact Finding, but 

two others have persisted throughout, namely issues with the return of empty 

containers and issues with earliest return dates. Using the information gathered 

over the last two years, in late 2021 and early 2022, the Fact Finding Officer 

convened team meetings with carriers on an alliance-by-alliance basis, together 

with their terminal partners, to explore commercial solutions to these two 

outstanding issues. 

These Teams met between November 2021 and February 2022 and 

discussed potential commercial solutions to lingering issues with ERDs and empty 

return. Teams explored some of the previous proposals on these issues identified 

by the Fact Finding and by the CPP. Ultimately through these meetings, a new 

framework was developed by the Fact Finding Officer that e1nphasized coherence 

at the ports. This framework was presented to the Teams for their thoughts on its 

feasibility. 

With respect to container return, the emphasis was on creating a reliable 

container return process. Specifically, containers should always be allowed to be 

returned to the originating terminal, regardless of whether other locations are 

available, operations should emphasize and encourage the use of dual moves. 

When, in rare cases it is not possible to return a container to the terminal of 

original pickup, notice should be received by at least 1 :00pm the day before and 

requirements for appointments at the new terminal should be waived. 

With respect to ERDs, the emphasis was on improving certainty for 

exporters. Specifically, confirming that the carrier is responsible to communicate 

 79 5 F.M.C.2d
the ERD to shippers, but MTOs and carriers will communicate to establish reliable 

ERD information for exporters. In rare cases in which a tenninal cannot honor the 

original ocean common carrier's ERD or on occasions where a vessel is delayed 

after an export container is delivered to the terminal in accordance with the 

carrier's ERD, the carrier and terminal will not invoice or otherwise charge export 

demurrage to the shipper. 

Like previous proposals from the Fact Finding and from outside, team 

members had mixed reactions to the effectiveness of these proposals. Some 

questioned the feasibility of incorporating these changes during this time of 

extreme congestion in seaports and terminals. 

III. FACT FINDING OFFICER CONCLUSIONS FROM PHASE I

AND PHASE II

A. International Ocean Freight Pricing and Market Analysis

1. Background

Over the course of Fact Finding 29, the focus of the investigation has shifted 

to meet new demands and respond to the interests and needs of stakeholders. One 

area of increased concern is the increased price of ocean shipping in the wake of 

the pandemic. Ocean shipping freight rates have risen dramatically in the last two 

years. The average spot market price of shipping a 40-foot container hovered 

around $1,500 in the first week of May 2020, reached a peak of $11,109 in 

September 2021, and in spring 2022, are near $9,000. 61 This average increase in 

prices has strained exporters and importers and the Fact Finding Officer is aware 

and acknowledges concerns that have been both raised by shippers and reported in 

the trade press. 

61 Figures were taken from the Freightos Baltic Index (FBX): Global Container Freight Index. Available 

online at: https://fbx.freightos.com/. 

 80 5 F.M.C.2d
Freight rates for ocean shipping are subject to volatility. 62 Supply and 

demand fluctuates on an annual and seasonal basis, and due to external events. 

Notwithstanding the nature of freight rates, as discussed throughout this report, the 

effects of the COVID-19 pandemic were evident in the global supply chain quickly 

and intensely. 

Consumer spending also was dramatically impacted by the change in 

circumstances. 63 As people stayed home and governments imposed lockdowns and 

restrictions, consumer spending on goods, particularly through e-commerce, rather 

than services, surged in the fall of 2020. 64 This increased demand overwhelmed 

limited supply, which was further affected by other COVID-19 impacts, such as 

government restrictions and decreased workforces because of illness. 65 Supply 

chain congestion globally further decreased the available supply of ship capacity 

and container availability for exporters and importers. 

62 Fernando Leibovici and Jason Dunn, The Dynamics of International Shipping Costs, Federal Reserve 

Bank of St. Louis, (Jan. 3, 2022), https://www.stlouisfed.org/on-the-economy/2022/janua1y/dy11a111icsinternational-shippingcosts#:~:text=A %20salient%20feature%20of%20the.in%20the%20week%20of%20Feb (last visited May. 

17, 2021)("Our first observation is that international shipping costs are volatile. Their deviations from 

trend p1ior to COVID-19 range from -26.8% to 19.0%, with a.standard deviation of 12.8%. Thus, even 

though recent changes of international shipping costs stand significantly above this range, it is impo1tant 

to note that seaborne shipments typically feature significant plice swings even outside clisis episodes."). 

63 Id. ("These sha1p changes in international shipping costs are paitially in response to the COVID-19 

economic environment. Unprecedented levels of fiscal stimulus, combined with a sha1p reallocation of 

demand from services into durable goods, have been straining supply chains, leading to the resurgence of 

inflation across developed economies. Given that durable goods ai·e pa1ticularly likely to be traded 

internationally, these developments have led to the increased demand for international shipping services 

and, thus, to the rise of international shipping costs."). 

64 See United Nations Conference on Trade and Development, Review of Maritime Transport 2021, 

https:/ /unctad.org/system/files/o fficial-docmnent/mlt2021 en O.pdf. 65 United Nations Conference on Trade and Development, High freight rates ca5t a shadow over 

economic recovery, (Nov. 18, 2021), https://unctad.org/news/high-freight-rates-cast-shadow-overeconomic-recovery ("This large swing in containe1ized trade flows was met with supply-side capacity 

constraints, including container ship canying capacity, container sho1tages, labour sho1tages, continued 

on and off COVID-19 restrictions across port regions and congestion at po1ts. This mismatch between 

surging demand and de facto reduced supply capacity then led to record container freight rates on 

practically all container trade routes."). 

 81 5 F.M.C.2d
Even as COVID-19 cases dropped, vaccines became available, and the 

impact of the pandemic was less pronounced at ports and with supply chain actors, 

the supply remained outmatched by the demand. 66

2. Commission Competition Enforcement and Shipping Act 6(g)

Standard

The number of major carriers in the U.S. transpacific and Atlantic trades has 

decreased from 20 in 2015 to 11 by 2022, due to ocean carrier mergers and the 

bankruptcy of one major carrier. 67 The Federal Maritime Commission and the 

Department of Justice have a statutory division of competition authority over 

international liner shipping in the U.S. trades. The Department of Justice reviews 

and approves mergers of ocean carriers. 68 The Federal Maritime Commission 

analyzes the competitive market effects of collaborative agreements among 

competitors, such as vessel sharing agreements ( alliances are vessel sharing 

agreements that operate globally) or joint ventures. It is noted that market 

concentration results from mergers, not from the market effects of collaborative 

agreements among competitors. 

While it is characterized as an "exemption," the Shipping Act of 1984 is not 

an exemption from the antitrust laws, but an alternative competition regime put in 

place by Congress in recognition of the multinational nature of international ocean 

66 In response, ocean caniers are responding to the imbalance between supply and demand by ordering of 

new vessels. Tiuough this investment, caniers are responding to the lack of supply. While ultimately 

these orders will increase supply, it will be sometime before their effects are felt due in pa.it to the time 

necessary to produce new vessels and the time it will take for the mai·ket to feel their effect. 

67 The ocean caITier consolidation and bankrnptcy since 2014 include: 

CSAV and Hapag-Lloyd merger (2014); 

COSCO and China Shipping merger (2016, aimounced in 2015 but not completed until Feb. 2016); 

Hanjin baitlm1ptcy (2016); 

CMA CGM purchase of APL through acquisition of NOL (2016); 

Maersk purchase of Hamburg Sud (2017); 

COSCO purchase of OOCL (completed 2018, announced 2017); 

Hapag-Lloyd/UASC merger (2017); and 

MOL/K Line/NYKjoint venture as ONE (2017/2018). 

68 The Fact Finding Officer believes that the most wholistic approach would be to include ocean cai1ier 

merger activity under the FMC, similar to railroad merger activity which is overseen by the Surface 

Transportation Board. 

 82 5 F.M.C.2d
shipping and importance of working with our international trading partners in this 

arena. The Federal Maritime Commission, with its specialized knowledge and 

expertise, is the agency responsible for administering this alternative competition 

law. The competition standard in the Shipping Act of 1984, as amended, 46 U.S.C. 

§ 41307(b)(l), is modeled on the same laws administered by the Department of

Justice. 69 The basic framework for initial analysis aligns with established

guidelines used for evaluating collaboration among competitors and is performed

by economists and industry analysts who are experts in the ocean transportation

system. 70

Agreements that may pose competitive concerns are subject to continuous 

monitoring by Commission staff. The Commission validates the data and 

information collected through our monitoring with external sources of information 

on ship schedules, capacity, and measures of cargo moved. The FMC also 

regularly reviews and revises monitoring data to ensure that the data collected 

aligns with the realities of the industry. During the pandemic, "blank sailings" 

were a particular concern because of their potential to be used for anti-competitive 

purposes. Our monitoring, however, indicated that this reduced service by ocean 

carriers was driven by port congestion rather than a desire to reduce capacity, and 

delays and skipped ports have been a frequent occurrence. The Commission staff 

have adjusted the data collected on blank sailings to provide additional detail on 

the factors driving schedule delays and blanked sailings. 

There are three global alliance agreements on file with the Commission: 2M, 

OCEAN, and THE. These agreements contain authority for the carriers to share 

vessels, exchange space, and coordinate scheduling and utilization, among other 

provisions. These are the most heavily monitored carrier agreements, due to the 

potential anticompetitive impacts from their authority to efficiently use their 

69 Section 6(g) of the Shipping Act of 1984, 46 U.S.C. § 41307(b)(l), is modeled on the Hait-ScottRodino Antitmst Improvements Act of 1976 which amended the Clayton Act to require companies to file 

premerger notifications with the Federal Trade Commission and the Antitrnst.Division of the Justice 

Department for certain mergers and acquisitions. 

7

° Federal Trade Commission and Depaitment of Justice, Antitrust Guidelines for Collaborations Among

Competitors, (April 2000), htms://www.ftc.gov/sites/default/files/documents/public events/joint-vennirehearings-antitmst-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf. 

 83 5 F.M.C.2d
resources. As of May 5, 2022, the three global ocean carrier alliances and each of 

their member companies will now be required to provide enhanced pricing and 

capacity information. Additional agreement changes may be required by the 

Commission to alleviate competition concerns as warranted. 

3. Market Analysis

Though there have been charges of illegal activity or concerns of market 

concentration driving increased ocean freight costs, the Fact Finding Officer's 

assessment is that our transpacific market is not concentrated and that the increased 

rates in that market are a result of an extreme spike of consumer demand in the 

United States that overwhelmed the supply of ship capacity. Similarly, the U.S. 

Atlantic market for ocean shipping is barely concentrated, and increased rates in 

that market are also a result of overwhelming U.S. demand.71 Furthermore, a 

reassuring data trend indicates that the individual ocean carriers within each 

alliance continue to compete on pricing and marketing independently and 

vigorously. Individual ocean carriers within alliances continue to add and withdraw 

vessels from trades both inside and outside the alliances in which they participate 

and, particularly in the transpacific, new entrants have been entering the trade. The 

transpacific is a highly contestable market. 

Using the Herfindahl-Hirschman Index (HHI) the Commission's Bureau of 

Trade Analysis has found that the transpacific markets are competitive and have 

been for some time. In fact, moving beyond HHI, the fact that the non-alliance 

share in the transpacific increased throughout 2021 provides further evidence of 

competition in that market. The transatlantic numbers are slightly higher in terms 

of HHI, indicating a moderately concentrated market over the past year, but is at 

the very bottom of that range. 

The Commission has ongoing contact with our international ocean liner 

competition partners. Competition officials of the European Union, China, and the 

71 Similar conclusions have been reached by European counterparts. See Peter Thomsen, EU rejects cartel 

charges against carriers, ShippingWatch, (Feb. 2, 2022), 

https:/ /shippingwatch.com/regulation/article 13 7 57 511.ece#:~:text=The%20Emopean%20Commission%2 

0denies%20allegations.alliances%2C%20states%20spokesperson%20to%20Shipping Watch. (last visited 

May 17, 2022) ("It was concluded that so far no evidence of anti-competitive behavior from shipping 

alliances aimed at increasing freight rates has been identified"). 

 84 5 F.M.C.2d
Federal Maritime Commission regularly discuss our ocean shipping markets and 

we have, to date, observed no indication that the current prices for liner shipping 

are a result of collusive or illegal conduct on the part of the major ocean carriers in 

our markets. 

B. Detention and Demurrage

1. Interpretive Rule

The second category of concern that the Fact Finding Officer heard about 

from stakeholders during the Fact Finding was detention and demurrage charges 

and other new charges by carriers and marine terminals. Many have charged that 

empty container return practices, and other carrier practices, have not only resulted 

in increased operating costs, but in many cases, resulted in demurrage and 

detention charges due to terminals unwillingness to accept empty containers. 

Issuing the Interpretive Rule on Demurrage and Detention Under the 

Shipping Act in May 2020, was one of the biggest challenges the Commission has 

ever undertaken. Demurrage and detention charges are controversial 

internationally. The United States is the first nation to take steps to confine the 

charges to the purpose for which they are intended: to incentivize shippers to pick 

up cargo and return equipment during allotted time periods. Central to the 

Commission's Interpretive Rule on Demurrage and Detention is the principle that 

detention and demurrage charges and policies should serve the primary purpose of 

incentivizing the movement of cargo and promoting freight fluidity. 

The Commission employed an Interpretive Rule to provide a standard - the 

incentive principle- to govern analysis of detention and demurrage charges. This 

standard is issued under the existing statutory requirements of 46 U.S.C. 

§ 41102( c) that ocean carrier and marine terminal operators "may not fail to

establish, observe, and enforce just and reasonable regulations and practices

relating to or connected with receiving, handling, storing, or delivering property."

The Interpretive Rule is based on the incentive principle - that detention and

demurrage fees must facilitate freight fluidity. In effect, this principle allocates the

risk of congestion to those in the best position to address the issues - ocean

common carriers, seaports, marine terminal operators, and in some cases, shippers.

 85 5 F.M.C.2d
The Commission is enforcing the Interpretive Rule to define and address 

"unreasonable" detention and demurrage charges. Cases have been filed, giving the 

Commission the opportunity to clarify unreasonable charges. Based on information 

developed as part of our "Vessel-Operating Common Carrier Audit Program," the 

Commission is moving forward to investigate situations that may violate 46 U.S.C. 

§ 41102( c) in the case of demurrage and detention.

2. Information Demands

Due to concerns that carriers were not following the Commission's rule on 

detention and demurrage practices, the Fact Finding Officer issued information 

demands to ocean carriers about their detention and demurrage practices. The Fact 

Finding also solicited information and evidence from shippers, truckers, 

intermediaries, and their trade associations and required carriers and marine 

terminal operators to provide information and evidence on demurrage and 

detention, empty container return, and export container availability. 

3. Enforcement of Interpretive Rule

A major misunderstanding surrounds the nature of the Demurrage and 

Detention Interpretive Rule. The Interpretive Rule is not merely guidance. We 

have issued several "guidance statements" as part of Fact Finding 29, and they are 

useful regulatory tools. But the Interpretive Rule acts as the "interpretation" of 

demurrage and detention charges as potential "unreasonable practices" under 

section 41102(c) of Title 46, United States Code. 72 The Interpretive Rule is the 

basis for Commission investigations of potential violations of section 41102( c) 

against ocean carriers for unreasonable practices regarding demurrage and 

detention. This law enforcement aspect of Fact Finding 29 is aimed at potential 

unreasonable demurrage and detention charges and is currently underway, and it 

may result in civil penalty proceedings or other formal enforcement actions. 

Based on the Interpretive Rule, the Commission has completely reoriented 

our resources to focus on demurrage and detention, including beginning a new 

72 Without the h1terpretive Rule, it would take years of investigations and complaints for the Commission 

to develop a coherent approach to "unreasonable" demunage and detention charges case-by-case. 

 86 5 F.M.C.2d
program to reach out to ocean carriers and audit their demurrage and detention 

compliance. 

4. Need for Information on Which to Base Enforcement Actions

One final point regarding a violation of any law or regulation: to enforce the 

Interpretive Rule, the Commission must be made aware of the facts surrounding a 

potential violation to pursue an investigation. Whether it is through a complaint or 

a notice to the Commission's Bureau of Enforcement, the Commission needs facts 

to pursue demurrage and detention violations. 

IV. COMMISSION ACTION: INTERJVI AND SUPPLEMENTAL

RECOMMENDATIONS

A. Interim Recommendations

On July 28, 2021, during the open session of a Federal Maritime 

Commission meeting, the Fact Finding Officer provided the Commission with 

Interim Recommendations to address current conditions contributing to 

inefficiencies and congestion in the freight delivery system exacerbated by impacts 

associated with the ongoing COVID-19 pandemic. 73 The recommendations aimed 

at minimizing barriers to private party enforcement of the Shipping Act, clarifying 

Commission and industry processes, encouraging shippers, drayage operators, and 

other stakeholders to assist Commission enforcement actions, and support the 

ability of our Office of Consumer Affairs and Dispute Resolution Services to 

facilitate prompt and fair dispute resolution and assist shippers in emergency 

situations. 

In sum, eight interim recommendations were submitted to and approved by 

the Commission to address the three goals: 

• Minimizing Barriers to Private Party Action;

• Clarifying Commission and Industry Processes; and

73 FMC Press Release: Remarks of Commissioner Rebecca Dye on Fact Finding 29 Interim 

Recommendations, (Jul. 28, 2021 ), https://www.f.mc.gov/remark:s-of-commissioner-rebecca-dye-on-Fact 

Finding-29-interim-recommendations/. 

 87 5 F.M.C.2d
• Encouraging Assistance with Commission Investigation.

The Commission voted to implement the four recommendations that do not 

require legislative action in September 2021. As of the writing of this report, all 

these recommendations have either been accomplished or are underway at the 

Commission. 

1. Minimizing Barriers to Private Party Action

Despite persistent criticism of carrier and terminal practices since the very 

beginning of Fact Finding 29, few private parties have filed complaints seeking 

reparations. This apparent disconnect fueled discussions with stakeholders and an 

internal review of Commission policies. It appears that shipper and trucker 

concerns about retaliation, litigation costs, and attorney fees are important 

disincentives to private party enforcement of 46 U.S.C. § 41102(c). The Fact 

Finding Officer recommended three actions to address these concerns: 

• Amend section 41104( a)(3) of title 46, United States Code, to broaden

the anti-retaliation provision in the Shipping Act to respond the concerns

raised by shippers, especially exporters;

• Amend section 41305( c) of title 46 to authorize the Commission to order

double reparations for violations of section 41102( c ), with Commission

guidance focusing this provision on demurrage and detention violations

and other types of cases or behavior; and

• Issue a Commission policy statement regarding three areas related to

private party complaints: retaliation, attorney fees, and representational

complaints, including trade associations.

The first recommendation is a request from the Fact Finding Officer to 

Congress to amend the statute to remove a potential barrier to private party action. 

This recommendation was based on perceived fears from the industry that they will 

face retaliation when filing a complaint. The Shipping Act does prohibit 

retaliation,74 but it only applies to retaliation by carriers against "shippers," it does 

not apply to retaliation by other regulated entities or to retaliation against nonshippers, such as drayage operators or others working on behalf of shippers. Thus, 

74 46 U.S.C. § 41104(a)(3).

 88 5 F.M.C.2d
the Fact Finding Officer recommended amending the statue to reflect the different 

types of entities who could be subject to retaliation and to make clear that 46 

U.S.C. § 41104(a)(3) is not limited to protecting competition among carriers, but 

also protects the ability to complain to the Commission about potentially unlawful 

conduct free from retaliatory fears. 

The second recommendation is also for a statutory change and again asks 

Congress to remove a potential barrier to private party action. One potential 

disincentive to private party complaints is the cost of litigating against carriers or 

marine terminal operators, especially when the amount in dispute may be 

comparatively small. The Fact Finding Officer recommended that Congress change 

these incentives, and deter unlawful demurrage and detention practices, by 

amending 46 U.S.C. § 41305(c) to add 46 U.S.C. § 41102(c) to the list of 

prohibitions for which double reparations are available. 

The third recommendation was to create Commission guidance or "policy 

statements" on three areas related to private party complaints: (1) the current antiretaliation prohibition, (2) attorney fees, and (3) who may file a complaint. All 

three policy statements were issued on December 28, 2021 and were announced 

via press release 75 and through the Federal Register. 76

In the first policy statement (Docket No. 21-13), the Commission reiterated 

that shippers' associations and trade associations may file a complaint alleging a 

prohibited act violation under 46 U.S.C. Chapter 411. This allows these 

organizations to protect the interests of their members while also providing 

shippers with a degree of separation and insulation from potential retaliation. 77 The 

second statement (Docket No. 21-14) explained the Commission's approach on 

attorney fees and reiterates that a party who brings an unsuccessful complaint is 

not automatically required to pay the other party's attorney fees. 78 The 

75 See Press Release: FMC Policy Statements Provide Guidance on Complaints Process, (Dec. 18, 2021), 

https://www.fine.gov/fmc-policy-statements-provide-guidance-011-complaints-process/. 76 87 Fed. Reg. 13292. 

77 Docket No. 21-13: Statement on Representative Complaints, (Dec. 28, 2021), 

https://www2.fmc.gov/readingroom/docs/21-13/21-13 Representative Complaints.pd.£'. 78 Docket No. 21-14: Statement on Attorney Fees, (Dec. 28, 2021), 

https://www2.fmc.gov/ReadingRoom/docs/21-14/21-14 Policy Atty Fees.pd.£'. 

 89 5 F.M.C.2d
Commission will look favorably upon complainants who raise non-frivolous 

claims in good faith, who litigate zealously but within the rules and for proper 

purposes, and who comply with Commission Orders. Finally, in the third statement 

on retaliation (Docket No. 21-15), the Commission emphasized that it broadly 

defined both who can bring a retaliation complaint, as well as the types of shipper 

activity that is protected under the existing retaliation prohibitions. This policy 

statement also addresses the proof necessary for certain retaliation complaints. 79

2. Clarifying Commission and Industry Processes

Throughout the Fact Finding, stakeholders repeatedly demonstrated 

confusion with the processes currently available at the Commission. There was 

misunderstanding, for example, about the differences between small claims and 

formal private party complaints, and between private party complaints and 

"complaints" to the Commission alleging potential violations of the Shipping Act 

for investigation or "complaints" to the Office of Consumer Affairs and Dispute 

Resolution Services (CADRS) for requests for dispute resolution services. To 

remedy this confusion and to generate more interest in using the preexisting 

Commission processes, the Fact Finding Officer recommended: 

• Revising the Commission's website to provide clarity regarding the

Commission's existing processes to bring factual allegations to the

Commission for resolution; and

• Holding a webinar to explain Commission processes.

The first two recommendations were aimed at accomplishing the same 

objective, clarifying Commission processes. The Fact Finding Officer 

recommended that the Commission's website should more clearly explain the 

differences between private party complaints, the Bureau of Enforcement's 

investigation and enforcement process, and dispute resolution services provided by 

CADRS. While all this information is currently on the Commission's website, 

housing it on the same page will allow stakeholders to discern the differences more 

clearly. Similarly, holding a webinar that discusses all three options and compares 

them could help dispel confusion and may aid the public as they choose a process. 

79 Docket No. 21-15: Statement on Retaliation, (Dec. 28, 2021),

https://www2.fmc.gov/ReadingRoom/docs/21-15/21-15 Policy Retaliation.pdf/. 

 90 5 F.M.C.2d
This webinar was released on April 25, 2022. 80 To further aid the public on 

February 15, 2022, the Fact Finding Officer issued a press release explaining 

options for filing complaints at the FMC. 81

In addition to clarifying Commission practices, the Fact Finding Officer also 

recommended action to clarify industry practices, specifically with respect to 

billing. Throughout the Fact Finding, industry men1bers reported confusion about 

the information contained in invoices. Although the Commission declined to 

prescribe specific billing practices in the Interpretive Rule on Demurrage and 

Detention, 82 it nonetheless referred to the content and clarity of practices and 

regulations regarding demurrage and detention billing in the final rule, 46 C.F.R. 

§ 545.5(d). To evaluate whether further action should be taken to clarify billing

practices, the Fact Finding Officer recommended:

• Issuing a rulemaking concerning information on demurrage and detention

billings.

Since the close of Fact Finding 28 and the issuance of the Interpretive Rule, 

the Surface Transportation Board adopted a rule requiring certain rail carriers to 

include "certain minimum information on or with demurrage invoices and provide 

machine-readable access to the minimum information." 83 The Fact Finding Officer 

recommended that the Commission issue an Advanced Notice of Proposed 

Rulemaking (ANPRM) to assess whether a similar rule is appropriate in the ocean 

shipping context. 

The Commission recently moved forward on this Interim Recommendation. 

On February 4, 2022, the Commission voted unanimously to issue an ANPRM 

seeking information from the public on whether a new rule governing demurrage 

and detention billing practices would benefit the trade. 

8

° FMC Press Release: FMC Launches Instructional Video on How to File Complaints, (Apr.25, 2022), 

https://www.fine.gov/finc-law1ches-instrnctional-video-on-how-to-file-complaints/. 81 FMC Press Release: Commissioner Dye Explains Option.sfor Filing Complaints at FMC, (Feb. 15, 

2022), https:/ /www.fine.gov/commissioner-dye-explains-options-for-filing-complaints-at-fine/. 82 85 Fed. Reg. at 29661. 

83 Final Rule: Demurrage Billing Requirements, 86 Fed. Reg. 17735 (Apr. 6, 2021). 

 91 5 F.M.C.2d
The ANPRM requested comments on five areas related to demurrage and 

detention billing and whether they should be subject to future regulation. These 

include what data should be included on bills, reasonable timeframes for billing 

and response, and whether other charges should be included in billing regulation. 

The ANPRM noted the Commission is considering the merits of establishing 

regulations mandating certain minimum information be included in bills issued for 

demurrage and detention. Through the ANPRM, the Commission is also 

considering prescribing a maximum period in which an invoice can be sent. The 

ANPRM also inquired whether this rule should apply to marine terminal operators 

and non-vessel-operating common carriers in addition to vessel-operating common 

carriers. The ANRPM was published in the Federal Register on February 25, 2022, 

with comments due on March 17, 2022. 84 This comment period was later extended 

to April 16, 202285 and the Commission received eighty-one comments. 

3. Encouraging Assistance with Commission Investigation

Though the Commission brings enforcement actions under 46 U.S.C. 

§ 41302(a), the Commission needs stakeholders to participate in all stages of the

enforcement process. Not only does the Commission use information provided by

stakeholders to inform the Commission of violations, but as noted above, the

Commission also needs stakeholders who are willing to support enforcement

actions. To encourage members of the shipping community to aid the Commission

in its enforcement actions, the Fact Finding Officer recommended:

• Amending 46 U.S.C. §§ 41109 and 41309 to authorize the Commission

to order refund relief in addition to civil penalties in enforce1nent

proceedings.

Under the current statutory framework, in an enforcement proceeding, the 

Commission can assess a civil penalty for a violation of a prohibited act, 86 but that 

penalty goes to the United States Government, not injured parties. 87 The Fact 

Finding Officer believes that granting the Commission the discretionary authority 

84 ANPRM: Demmrnge and Detention Billing Requirements, 87 Fed. Reg 8506, (Feb 25, 2022). 

85 Extension of Comment Period, 87 Fed. Reg. 15179, (Mar. 11, 2022). 

86 46 U.S.C. §§ 41107(a), 41109.

81 Id. at§ 41107(a). 

 92 5 F.M.C.2d
to order refunds in enforcement proceedings in addition to civil penalties, or in lieu 

of civil penalties, would incentivize parties to work with Commission investigatory 

staff. 

4. Bolstering CADRS

Throughout the Fact Finding, stakeholders repeatedly mentioned the benefits 

of the Office of Consumer Affairs and Dispute Resolution Services (CADRS) and 

the vital role it plays in assisting stakeholders resolve disputes without litigation. In 

doing so, CADRS serves as a liaison between different groups and educates them 

about their responsibilities. Export-related issues are similar but not identical to 

import-related issues. Due to the rise in export-related issues, the Fact Finding 

Officer recommended: 

• Designating an Export Expert in CADRS.

On December 18, 2021, a Commission staff member was detailed to this 

position to begin assisting stakeholders encountering export issues. The 

experienced staff member has been pem1anently reassigned to assist CAD RS as the 

export advocate to promptly address export matters. In addition, the Commission is 

actively recruiting and hiring positions to provide further resources for CADRS. 

Through later work with carriers, the Fact Finding Officer also worked to 

revitalize the "Rapid Response" program housed in CADRS. The Commission 

established Rapid Response Teams in 2010 to provide prompt solutions for 

commercial disputes between shippers and carriers. The Fact Finding Officer was 

able to secure a recommitment from carriers to commit Chief Operating Officers to 

this program for resolving the most urgent emergencies. 

B. Final Recommendations

The last two years have demonstrated that the Commission is uniquely 

positioned to handle the challenges facing our global supply chain. While the 

primary focus of this investigation has been seeking commercial solutions, there 

have been moments where direct Commission action was warranted. In the 

Supplemental Order issued in November 2020, the Commission endorsed the Fact 

Finding Officer to investigate: (1) practices and regulations related to demurrage 

 93 5 F.M.C.2d
and detention, (2) empty container return in light of 46 C.F.R. § 545.5, and (3) 

practices related to the carriage of U.S. exports. 

Much time has been spent in this report documenting efforts and actions 

taken by the Fact Finding Officer to investigate and provide relief to demurrage 

and detention issues, including initiating a rulemaking earlier this year to bring 

clarity to demurrage and detention billing practices. With respect to the issues of 

empty container return and U.S. exports, the Fact Finding Officer also believes the 

industry could benefit through additional recommendations, collaboration, and new 

rulemakings to similarly bring coherence and clarity to these sectors of the 

industry. The Fact Finding Officer, therefore, recommends the following additional 

recommendations: 

• A new Commission "International Ocean Shipping Supply Chain

Program" with dedicated personnel;

• A rulemaking to provide coherence and clarity on empty container

return practices;

• A rulemaking to provide coherence and clarity on earliest return date

practices;

• Continued Commission support for the new FMC "Vessel-Operating

Common Carrier Audit Program" including developing a new

requirement for ocean common carriers, seaports, and marine

terminals to employ an FMC Compliance Officer;

• An FMC outreach initiative to provide more inforn1ation to the

shipping public about FMC competition enforcement, service

contracts, forecasting, and shippers associations, among other topics;

• An enhanced cooperation with the federal agency most experienced in

agricultural export promotion, the Department of Agriculture,

concerning container availability and other issues;

• A Commission Investigation into practices relating to charges

assessed by ocean common carriers and seaports and marine terminals

through tariffs;

• A rulemaking to provide coherence and clarity on n1erchant haulage

and carrier haulage;

• A new "National Seaport, Marine Terminal, and Ocean Carrier

Advisory Committee" to work cooperatively with the Commission's

National Shipper Advisory Committee;

 94 5 F.M.C.2d
• A revival of the Rapid Response Team program as agreed by all ocean

carrier alliance CEOs;

• A FMC Supply Chain Innovation Teams engagement to discuss blank

sailing coordination and information availability; and

• A reinvigorated focus on the extreme supply chain equipment

dislocations in Memphis railheads, other rail facilities and other

facilities around the country.

These recommendations are discussed more fully below. 

1. New FMC Supply Chain Program

Over the last five years, the Commission has supported three investigations 

to explore and remedy challenges in our international ocean supply chain. In the 

Supply Chain Innovation Initiative, the focus was on enhancing supply chain 

reliability and resilience. In Fact Finding 28, the focus was on the effects of 

demurrage and detention charges. In Fact Finding 29, the emphasis has been on 

ocean supply chain issues exacerbated by the COVID-19 pandemic. 

Throughout each of these investigations, the Fact Finding Officer has dealt with 

international ocean supply chain disruptions. The reasons that these problems 

persist despite great strides made by the industry and the Commission, resides in 

the nature of the supply chain. The United States international ocean supply chain 

is a complex system, and the operational interdependence of the actors within it 

make it difficult to develop solutions to individual supply chain challenges. 

Fortunately, the Commission stands in a unique place to understand and 

address the issues facing the U.S. international ocean freight delivery system. 

Therefore, the Fact Finding Officer strongly supports a dedicated program office 

for studying and addressing the growing needs in our Nation's supply chain. This 

dedicated program office should study the issues facing our supply chain and 

propose solutions to challenges. 

2. Rulemaking on Empty Container Return

In the November 2020 Supplemental Order, the Commission endorsed the 

Fact Finding Officer's efforts to investigate, among other things, empty container 

 95 5 F.M.C.2d
return in light of 46 C.F.R. § 545.5 in our major gateways. Over the last two years, 

teams have explored three approaches to dealing with these issues and dozens of 

meetings were conducted exploring potential solutions. The Fact Finding Officer 

also obtained infonnation on the practices of carriers and terminals on these issues 

through the use of information demands. The data collected emphasized the need 

for the Commission to regulate the comn1unication of vital information to shippers. 

Again, issues with empty container return are not new. In its Final Rule on 

demurrage and detention the Commission stated that, "Absent extenuating 

circumstances, practices and regulations that provide for imposition of detention 

when it does not serve its incentivizing purposes, such as when empty containers 

cannot be returned, are likely to be found unreasonable."88 However, trucker 

complaints about difficulties in timely returning empty containers persisted after 

the Commission published its interpretive rule and increased in light of supply 

chain disruptions associated with the COVID-19 pandemic. The information 

demands served in the Fact Finding sought information from carriers and terminals 

on notification processes for empty container return and impediments to empty 

container return. Specifically, how much notice is given regarding return policies 

and what happens when inadequate notice is given. These two areas were 

identified as problematic issues in both the team meetings in 2020 and through 

follow up conversations with stakeholders. 

As noted in the earlier discussion, the information demands shed some light 

on the frustration shippers and drayage operators noted regarding notice of where 

and when empty containers can be returned. It appears that there is a lack of 

consistency across the United States with respect to the return of empties and it is 

not always clear who is responsible for communicating return locations. While 

carriers are taking strides to communicate the information to shippers and drayage 

operators, there remains a disconnect over who is ultimately responsible for 

sharing the correct inforn1ation and how timely the information is shared. 

The Fact Finding Officer therefore recommends that the Commission begin 

a rulemaking to bring coherence and consistency to practices surrounding the 

return of empty containers. Relying on the approaches examined in the 

88 46 C.F.R. § 545.S(c)(2)(ii).

 96 5 F.M.C.2d
investigation, the rulemaking should focus on ensuring information is 

communicated timely and that shippers can rely on the information provided to 

them. 

3. Rulemaking on Earliest Return Dates

The Fact Finding Officer is pleased that American agricultural exporters 

enjoyed record breaking trade levels in 2021. 89 However, American exporters have 

still endured hardships over the last two years. One enduring issue for stakeholders 

throughout the Fact Finding was with earliest return dates (ERDs) for containers. 

As discussed earlier, the information demands asked how carriers provided notice 

to beneficial cargo owners/drayage operators of blanked sailings, bypassed ports, 

or changes to ERDs, and how carriers mitigated the effects of those events to 

drayage operators and shippers. MTOs were similarly asked whether they post 

information about ERDs and vessel schedules on their website. Though all carriers 

stated that they communicated vessel-schedule and/or ERD information to their 

customers, as with empty container return, responses indicated a large array of 

methods being employed to communicate information. 

Confusion over where to locate reliable information on ERDs and who is 

ultimately responsible for determining ERDs has frustrated the shipping public. 

Stakeholders have continued to express frustration regarding poor notice of where 

and when empty containers can be returned. Others mentioned instances of 

terminals refusing to receive empty containers, requiring dual transactions, or not 

having appointments for the return of empty containers. Many further charged that 

empty container return practices, ERD issues, and other carrier practices, have not 

only resulted in increased operating costs, but in demurrage and detention charges. 

Again, in sum, the information demands and conversations with stakeholders 

suggest there is a variety of methodologies being employed to communicate ERD 

information to shippers. The Fact Finding Officer recommends launching an 

additional rulemaking to bring coherence and consistency to practices surrounding 

the issuance of ERDs. As with the rulemaking on empty container return, this 

89 USDA Press Release: American Agr

icultural Exports Shattered Records in 2021, (Feb. 8, 2022), 

https://www.usda.gov/media/press-releases/2022/02/08/amelican-agiiculmral-exports-shattered-records2021 ("the American agiicultural industry posted its highest annual export levels ever recorded in 2021 "). 

 97 5 F.M.C.2d
rulemaking should rely on the approaches discussed and generated during the Fact 

Finding and should primarily focus on removing confusion about responsibility 

and notification procedures. 

4. Ocean Carrier and Marine Terminal Compliance Officers

The Supplemental Order directed the Fact Finding Officer to investigate 

whether carriers' policies, practices and procedures align with the principle, central 

to the Commission's Interpretive Rule, that detention and demurrage charges and 

policies should serve the primary purpose of incentivizing the movement of cargo 

and promoting freight fluidity. 

The Commission currently focuses resources on industry-wide compliance 

with the demurrage and detention Interpretive Rule and underlying statutory 

authorization. This includes actions taken by the new Commission audit teams, and 

the Commission's compliance program to ensure conformity with the 

Commission's regulations. 

To aid in compliance operations, the Fact Finding Officer further 

recommends a new regulatory requirement that all ocean carriers and MTOs 

designate a Commission compliance officer who reports directly to the Chief 

Executive Officer (USA). Having designated officials responsible for FMC 

compliance will aid in ensuring industry-wide observance of the law and 

Commission regulations. 

5. Outreach Initiatives to Stakeholders

One of the first findings of Fact Finding 29 was a lack of awareness in the 

industry of how the Commission can serve stakeholders. Over the last two years, 

the Fact Finding Officer has shared information and advice to the shipping public. 

In the Interim Recommendations, the Fact Finding Officer provided information to 

the public on filing complaints through the issuance of three policy statements and 

the publication of an instructional video. The Fact Finding Officer recommends the 

Commission continue to focus and support outreach initiatives to continue 

engaging the shipping public on ways the Commission can assist them. 

 98 5 F.M.C.2d
6. Enhanced Interagency Cooperation for Agricultural Exporters

The Fact Finding Officer encourages increased Commission engagement 

with the U.S. Department of Agriculture, whose experience and expertise in 

handling the needs of exporters could be of great value to the Commission. One of 

the most important issues to be addressed for agricultural exporters involves access 

to ocean shipping containers. Container availability is a chronic challenge for 

agricultural exporters and the Commission should engage with the U.S. 

Department of Agriculture to assist U.S. exporters in this and other vital matters. 

7. Commission Investigation into Tariff Surcharges and Other

Charges

There are currently only limited Commission regulations to evaluate charges 

by ocean common carriers, MTOs, and seaports, contained in tariffs. Specifically, 

with any tariff change or rate increase, ocean common carriers are required to 

provide a 30-day notice to shippers and ensure that published tariffs are clear and 

definite. Recently, stakeholders have raised concerns about new charges appearing 

in their invoices. The Fact Finding Officer recommends the Commission launch an 

investigation into practices by carriers, MTOs, and seaports relating to charges 

assessed through tariffs. 

8. Rulemaking to Define Merchant Haulage and Carrier Haulage

Throughout the course of the Fact Finding, a number of stakeholders have 

expressed a lack of clarity among the parties regarding the differences between 

merchant haulage and carrier haulage. Having a clear definition of these terms will 

provide coherence and definition for the responsibilities of parties. The Fact 

Finding Officer recommends a rulemaking that defines these terms for the shipping 

public. 

9. New National Seaport, Marine Terminal, and Ocean Carrier

Advisory Committee

One of the recommendations of the Fact Finding 28 investigation was the 

development of a Commission shipper advisory committee. The charter for the 

National Shipper Advisory Committee (NSAC) was issued on June 7, 2021, and 

 99 5 F.M.C.2d
the committee has been meeting regularly since then. The Committee provides 

information, insight, and expertise pertaining to conditions in the ocean freight 

delivery system to the Commission. The Fact Finding Officer believes the 

Commission and the National Shipper Advisory Committee would equally benefit 

with the creation of an ocean carrier, seaport, and marine terminal advisory 

committee. This was identified early in the Fact Finding 29 investigation90 and 

could serve the Commission as it continues to deal with issues pertaining to the 

industry. 

10. Rapid Response Team in Office of Consumer Affairs and Dispute

Resolution Services

The Commission has successfully used Rapid Response T earns (RR Ts) in 

CADRS to provide a prompt solution for emergency commercial disputes between 

exporters and ocean carriers. In the past, the success of this program depended on 

carrier CEO level participation in this process. The involvement of high-level 

company leadership ensured that concerns were addressed and resolved quickly. 

Unfortunately, over the years, carrier CEO level participation with the Commission 

RRTs has diminished. 

The Commission should reestablish a RRT process that involves ocean 

carrier CEOs. Through meetings with the CEOs of the U.S.-based subsidiaries of 

all major ocean carriers, the Fact Finding Officer has obtained their commitment to 

the program. This program will ensure that the most serious and time-sensitive 

issues are addressed and resolved promptly. 

11. FMC Supply Chain Innovation Teams on Blank Sailings

Early in the pandemic, shippers struggled with remaining informed on 

blanked sailings and bypassed ports. Recently, stakeholders have raised concerns 

about information availability and coordination with respect to blanked sailings. 

The Fact Finding Officer recommends engaging Innovation Teams to identify 

commercial solutions to lingering issues with blanked sailings and other issues. 

90 See FMC Press Release: Commissioner Dye Announces Findings of San Pedro Bay Discussions, (Jun. 

17, 2020), bttps://www.fmc.gov/commissioner-dye-announces-findings-of-san-pedro-bav-discussions/. 

 100 5 F.M.C.2d
12. Memphis Supply Innovation Team

The Fact Finding Officer strongly recommends a reinvigorated focus with 

the Surface Transportation Board on the critical equipment dislocations in 

Memphis and in other rail facilities around the country. Unfortunately, the situation 

in Memphis and in railheads around the country has deteriorated. The Fact Finding 

Officer strongly encourages a renewed effort to resolve the challenges faced by 

stakeholders in Memphis. 

V. PATH FORWARD - MUTUALLY ENFORCEABLE

CONTRACTS

For the last two years, the international ocean supply chain has weathered 

effects of the COVID-19 pandemic, exacerbated by an unprecedented surge in 

consumer demand created in part by COVID-19 lockdowns and facilitated by ecommerce. Whether high consumer demand and the resulting congestion is the 

"new normal," time will tell. The Fact Finding Officer believes that the actions 

taken pursuant to the Interim Recommendations, and the approval and 

implementation of the Final Recommendations, will address a number of the 

challenges experienced in the international ocean supply chain as a result of 

COVID-19. 

The Fact Finding Officer also believes that to address bottlenecks in the 

supply chain and make the ocean supply chain more efficient, it is crucial that 

shippers and ocean carriers move beyond vague and unenforceable rate 

agreements. One important thing for shippers and carriers alike would be for 

service contracts to entail a "meeting of the minds" with mutual obligations and 

commitments that are part of enforceable commercial documents. This is what was 

anticipated in the Ocean Shipping Reform Act of 1998. Mutual commercial 

commitments and understanding will provide protection for exporters and 

importers from volatile shipping rates and the forecasting that ocean carriers need 

to provide capacity to serve the needs of their customers. 

 101 5 F.M.C.2d
ACKNOWLEDGEMENTS 

This has been the fourth Fact Finding Investigation for which I have served 

as Fact Finding Officer during my tenure at the Commission. Of the three, I have 

found this one, launched to respond to a global pandemic, to be the most 

challenging - and the most rewarding. First, I wish to thank my fellow 

Commissioners for placing their confidence and trust in me to examine these issues 

and make recommendations to eliminate bottlenecks in the U.S. international 

ocean supply chain caused or exacerbated by the COVID-19 pandemic. I wish to 

thank former Chairman Michael A. Khouri, and current Chairman Daniel B. 

Maffei, for their unfailing support for this effort. 

Second, I wish to thank all the stakeholders that met and communicated with 

me over the last two years and actively participated in the Innovation Teams that 

contributed to the work of this Fact Finding. The recommendations flowing from 

this Fact Finding would not have been nearly as well thought out and beneficial 

without the participation of those who contributed to this effort. I also wish to 

acknowledge several on whose work I relied: Bjorn Jensen of Sea Intelligence, 

Drewry Maritime Research, and the Federal Reserve Banks of St. Louis and 

Cleveland. 

Finally, I wish to thank those here at the Federal Maritime Commission who 

helped me with this work. I could not have done it without the experienced staff at 

the Federal Maritime Commission. 

Thank you all! 

Rebecca F. Dye 

 102 5 F.M.C.2d
APPENDIX 

Team Participants 

Original Team Members 

April 2020 

Amazon Global Logistics 

Maersk 

American Coffee Corporation 

Mohawk Global Logistics 

APM Terminals 

MOL America 

ASF Global 

MSC 

Atlantic Container Line 

North American Chassis Pool 

Cooperative 

BassTech International 

Northwest Seaport Alliance 

Best Transportation 

Oliver Wyman 

Cal Cartage Transportation 

OOCL 

Cargill Inc. 

Port Authority of New York and New 

Jersey 

CMA CGM America 

Port of Long Beach 

ContainerPort Group 

Port of New Orleans 

Fenix Marine Services 

Port of Olympia 

Flexport 

Ports America 

Gap, Inc. 

Scoular 

Gemini Shippers Association 

Seaboard Marine 

Georgia Ports 

SeaCube Container Leasing 

Global Container Terminals 

South Carolina Ports Authority 

Hapag-Lloyd 

T.G.S. Transportation 

IMC Companies 

Target 

International Longshore and 

Warehouse Union 

Total Terminals International 

ITS Terminals 

Walmart 

Louis Dreyfus Company 

Yusen Terminals 

Amazon Global Logistics 

ZIM 

 103 5 F.M.C.2d
Carrier Team Participants 

May 2020 

CMA CGM 

Maersk 

COSCO 

MSC 

Evergreen Line 

Ocean Network Express 

Hapag Lloyd 

OOCL 

HMM 

Yang Ming 

Southern California Team 

June 2020 

Fenix Marine Terminals Ports America 

Total Terminals International Yusen Terminals 

North Atlantic Teams 

July 2020 

American Coffee Corporation NJ Motor Truck Association 

Gemini Shippers Best Transit 

Association of Bi-State Motor Port ofNew York and New Jersey 

Carriers Consolidated Chassis Management 

IMC Companies Seaboard Marine 

Atlantic Container Line Container Port Group 

Gulf Coast Teams 

September and October 2020 

American Coffee Corporation 

Pacorini Group 

Ceres Global Ag 

Ports An1erica 

DOW Corporation 

Resin Tech 

IP aper.com 

Rooms To Go 

J.W. Allen 

The Dupuy Group 

New Orleans Terminal 

Triple G Express 

FACT FINDING 29 - FINAL REPORT 

 104 5 F.M.C.2d
Memphis Team 

August 2021 

Ashley Furniture Industries 

Louis Dreyfus Company Cotton 

AutoZone, Inc. 

IMC Companies 

BNSF Railway 

International Paper 

CMA CGM 

Maersk 

CN Railroad 

Mallory Alexander International 

Logistics 

COFCO International 

Mohawk Global Logistics 

Cornerstone Systems 

Nike 

Delta Strategy Group 

Olam International 

Dunavant Logistics Group 

Port of Memphis 

ECOMUSA 

Protective Industrial Products 

FedEx Logistics 

Pyramex Safety Products 

Greater Memphis Chamber 

TCW 

IMC Companies 

The Mitchell Group 

International Paper 

Wayfair 

Additional Terminal and Carrier Meetings 

November 2021- February 2022 

APL 

Long Beach Container Terminal 

APM Terminals 

Maersk 

CMA-CGM 

Maher Terminals 

COSCO 

MSC 

Evergreen Line 

ONE 

Everport Terminals 

OOCL 

Fenix Marine Services 

SSA Marine Terminals 

Global Container Terminals 

Total Terminals International 

Hapag Lloyd 

Yang Ming 

HMM 

Yusen Terminals 

ITS Terminals 

FACT FINDING 29 - FINAL REPORT 

 105 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

FOREIGN TIRE SALES, INC., Complainant 

v. 

EVERGREEN SHIPPING AGENCY (AMERICA) CORPORATION, 

AS AGENT FOR EVERGREEN LINE, EVERGREEN GROUP D/B/A/ 

EVERGREEN LINE, Respondent. 

DOCKET NO. 22-05 

Served: June 6, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s May 3, 2022, Initial Decision Approving Settlement Agreement has 

expired. Accordingly, the decision has become administratively final. 

William Cody 

Secretary 

106 5 F.M.C.2d
FEDERAL MARITME COMMISSION 

INTERNATIONAL OCEAN

TRANSPORTATION SUPPLY CHAIN

ENGAGEMENT

Fact Finding No. 29 

Served: June 9, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Louis E. SOLA, Carl W. BENTZEL, Max M. 

VEKICH, Commissioners. 

Order Discontinuing Proceeding 

On March 31, 2020, the Federal Maritime Commission 

(Commission) issued an order establishing Fact Finding 29.1 The 

primary purpose of the Fact Finding was to identify operational 

solutions to cargo delivery system challenges related to recent 

global events and Commissioner Rebecca F. Dye was appointed the 

Fact Finding Officer. 

On November 19, 2020, the Commission issued a 

supplemental order expanding the scope of the investigation.

2 The 

1 Order: International Ocean Transportation Supply Chain Engagement, 85 Fed. 

Reg. 19146 (April 6, 2020). 

2 Supplemental Order: International Ocean Transportation Supply Chain 

Engagement (FMC November 19, 2020). 

107 5 F.M.C.2d
 

 

INT’L OCEAN TRANSP. SUPPLY CHAIN ENGAGEMENT 2 

expanded scope included investigating whether alliance carriers 

calling on the Port of New York and New Jersey or the Port of Long 

Beach and the Port of Los Angeles were employing practices or 

regulations in violation of 46 U.S.C. § 41102(c). 

On May 18, 2022, Commissioner Dye reported her findings 

to the Commission in the open session of the Commission’s Public 

Meeting, and on May 31, 2022, Commissioner Dye issued her Final 

Report and accompanying recommendations to the Commission and 

made the report available to the public via the Commission’s 

website, www.fmc.gov. 

THEREFORE IT IS ORDERED, That, this Proceeding is hereby 

discontinued; and 

IT IS FURTHER ORDERED, That, notice of this Order be 

published in the Federal Register. 

By the Commission. 

William Cody 

Secretary 

108 5 F.M.C.2d
 

 

 

FEDERAL MARITME COMMISSION 

MAVL CAPITAL INC. ET AL., 

 Complainants, 

v. 

MARINE TRANSPORT LOGISTICS, INC. 

ET AL., 

 Respondents. 

 Docket No. 16-16 

Served: June 10, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Louis E. SOLA, Carl W. BENTZEL, Max M. 

VEKICH, Commissioners. 

Order Affirming Initial Decision on Remand 

This case is before the Commission following a remand to 

the Administrative Law Judge (ALJ) to address the merits of 

Complainants’ claim that Respondent Marine Transport Logistics, 

Inc. (Marine Transport) violated 46 U.S.C. § 41102(c) by selling 

two vehicles stored as export/import cargo to cover unpaid fees 

without prior notice or due process. Marine Transport justified the 

sale as authorized by its house bill of lading. On remand, the ALJ 

found Marine Transport acted unreasonably and consistent with its 

normal, customary, and continuous practice in selling the two 

109 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

vehicles and that its actions violated § 41102(c). However, the ALJ 

denied Complainants’ claim for reparations because they failed to 

prove “actual injury” as required by 46 U.S.C. § 41305 and did not 

produce sufficient reliable evidence substantiating the amounts they 

seek for the loss of the two vehicles and related expenses. The ALJ 

also denied Complainants’ request to hold Marine Transport’s 

employee, Respondent Dmitry Alper, personally liable for the 

§ 41102(c) violation.

In timely-filed exceptions, Complainants argue that the ALJ 

misapplied the burden of proof and erred in finding their reparations 

evidence insufficient. Complainants seek $48,500 for the loss of a 

2006 Mercedes SL 26 and $67,000 for the loss of a 2011 Porsche 

Panamera and $10,000 for ocean freight charges related to the 

Porsche and also ask to be declared the prevailing parties. 

Complainants argue that a declaration of value for customs purposes 

for the Mercedes and a contract from an overseas buyer for the 

Porsche prove their claim. Marine Transport argues the ALJ’s 

decision is soundly based on the record and legally correct and 

further asserts that the reparations Complainants seek for the two 

used vehicles are clearly excessive. 

For the reasons set forth below, the Commission affirms the 

ALJ’s decision in its entirety, denies Complainants’ claim for 

reparations for lack of evidence, and denies as premature 

Complainants’ request to be declared the prevailing parties. 

 

I. BACKGROUND

A. Factual Background

 

 

 

 

 

 

Complainants MAVL Capital Inc. (MAVL) and IAM & AL 

Group, Inc. (IAM) are in the business of importing and exporting 

vehicles for the overseas market. Initial Decision on Remand 

(I.D.R.), 6. Maxim Ostrovskiy is a principal in both companies. 

Marine Transport is a licensed non-vessel operating common carrier 

(NVOCC), and Dmitry Alper acted as its General Counsel and later 

110 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

as Director of Operations. Id. Complainants stored the Mercedes and 

the Porsche in Marine Transport’s New Jersey warehouse as 

import/export cargo. Id. at 7-9, 23. At some point, the parties had a 

disagreement over Mr. Ostrovskiy gaining access to the Mercedes, 

and he allegedly issued verbal instructions to ship the Mercedes to 

Germany. Id. at 9. 

The Mercedes was not shipped to Germany but was instead 

sold, along with the Porsche, to cover Complainants’ unpaid storage 

charges. Marine Transport sold the vehicles pursuant to its bill of 

lading which provides that “the Carrier shall have the right in its 

absolute discretion to dispose of the Goods and/or to sell the Goods 

by public auction or private sale without notice to the Merchant.” Id. 

at 11-12. Both vehicles were shipped to Dubai, United Arab 

Emirates where the Mercedes was sold for under $4,000. Id. at 9. 

B. Procedural History

Complainants alleged that Respondents violated 46 U.S.C. 

§§ 41102(c) and 41104(a)(3) and (10) and 46 C.F.R. Part 515 in

selling the Mercedes and the Porsche and by Respondents

unlawfully interfering with Complainants’ attempt to export three

motorcycles stored by a competitor NVOCC. Complainants

originally sought “[d]irect damages in excess of $180,000

constituting the amounts paid for the purchase of the vehicles plus

additional consequential damage for sums arising out of lost

contracts, plus interest.” Complaint, 9.

In January 2017, the ALJ dismissed all Complainants’ 

claims except the § 41102(c) claim for the sale of the Porsche. The 

Commission reversed the ALJ’s dismissal of the § 41102(c) claim 

for the sale of the Mercedes and remanded that claim to the ALJ to 

be decided along with the § 41102(c) claim for the sale of the 

 111 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

Porsche.1 On remand, the ALJ determined that Marine Transport 

violated § 41102(c) by selling the Mercedes and Porsche without 

prior notice or due process but denied Complainants’ reparations 

claim for lack of sufficient evidence. I.D.R., 20-32. 2 

In timely-filed exceptions, Complainants argue that the ALJ 

erred in finding their reparations evidence insufficient and ask the 

Commission to declare them the prevailing party since the ALJ 

found liability under § 41102(c). Complainants’ Br. in Support of 

Exceptions (Exceptions) (Nov. 12, 2021). Marine Transport urges 

the Commission to affirm the ALJ’s decision in its entirety and deny 

the request for prevailing party status. 

 

 

II. DISCUSSION

A. Standard of Review

When the Commission reviews exceptions to an ALJ’s 

Initial Decision, it has “all the powers which it would have in 

making the initial decision.” 46 C.F.R. § 502.227(a)(6). The 

Commission therefore reviews the ALJ’s findings de novo. Id.; see 

also Maher Terminals, LLC v. Port Auth. of N.Y. & N.J., FMC 

Docket No. 12-02, 2015 FMC LEXIS 43, *110-*11 (FMC Dec. 18, 

2015). Complainants bear the burden of proving their allegations by 

a preponderance of the evidence. 5 U.S.C. § 556(d); 46 C.F.R. § 

502.155; Maher Terminals, LLC v. Port Auth. of N.Y. & N.J., FMC 

Docket No. 08-03, 2014 FMC LEXIS 35, *41 (FMC Dec. 17, 2014). 

Under the preponderance standard, Complainants must show that 

their allegations are more probable than not. DSW Int’l, Inc. v. 

Commonwealth Shipping, Inc., FMC Docket No. 1898(F), 2012 

FMC LEXIS 32, at*2 (FMC July 23, 2012). 

 

 

 

 

 

1The Commission’s decision is published at MAVL Capital Inc. v. Marine Transp. 

Logistics, Inc., FMC Docket No. 16-16, 2020 FMC LEXIS 216 (FMC Oct. 29, 

2020). 

2The ALJ’s Initial Decision on Remand is published at MAVL Capital Inc. v. 

Marine Transport Logistics, Inc., No. 16-16, 2021 FMC LEXIS 161 (ALJ Sept. 

29, 2021). 

 112 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

B. Reparations Claim

The ALJ determined that Complainants failed to meet their 

burden of proving an actual injury commensurate with the 

reparations they seek for the loss of the Mercedes and Porsche. 

 

I.D.R., 32. The ALJ found that Complainants’ evidence was

insufficient and inconclusive. Id. With respect to the Mercedes, the

ALJ found that while it “is possible that Complainants paid for the

Mercedes in Germany and paid the shipping costs from Germany,”

it was “also possible that someone else paid the purchase price and

shipping fees.” Id. The ALJ reached a similar conclusion with

respect to the Porsche and determined that while it was possible

Complainants had paid various sums referenced in Complainants’

documents, it was equally possible that they had not. See id.

1. Legal Standard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 41305(b) provides that the Commission “shall direct 

the payment of reparations to the complainant for actual injury 

caused” by a Shipping Act violation if the claims were brought 

within the three-year time period for filing a complaint.3 46 U.S.C. 

§ 41305(b); § 41301(a). Complainants bear the burden of proving

that they are entitled to reparations. Yakov Kobel v. Hapag-Lloyd

A.G., FMC No. 10-06, 2014 WL 25316331, at *13 (FMC July 30,

2014). As the Commission has explained:

(a) damages must be the proximate result of violations

of the statute in question; (b) there is no presumption of

damage; and (c) the violation in and of itself without

proof of pecuniary loss resulting from the unlawful act 

does not afford a basis for reparation.

James J. Flanagan Shipping Corp. v. Lake Charles Harbor & 

Terminal Dist., FMC Docket No. 94-32, 2003 WL 22067203, at *7-

3This action was filed within three years of the sale of Complainants’ vehicles, so 

timeliness is not an issue. 

113 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 (FMC Aug. 26, 2003) (quoting Waterman v. Stockholms 

Rederiaktiebolag Svea , 3 F.M.B. 248, 249 (1950)). Establishing a 

Shipping Act violation alone does not justify reparations— 

complainants must also show that they sustained a pecuniary loss as 

a result of the unlawful act. Yakov Kobel, 2014 WL 5316331, at *13. 

“Reparations will only be awarded based on actual 

damages.” Yakov Kobel, 2014 WL 5316331, at *14 (citing Tractors 

and Farm Equipment Ltd. v. Cosmos Shipping Co., Inc., FMC No. 

 

81-57, 1992 FMC LEXIS 86, at *59-60 (ALJ Nov. 23, 1992)

(admin. final Dec. 31, 1992)). Actual damages means

“compensation for the actual loss or injuries sustained by reason of

the wrongdoing” which complainants must show to a reasonable

degree of certainty. Cal. Shipping Line, Inc. v. Yangming Marine

Transport Corp., FMC No. 88-15, 1990 WL 427466, at *23 (FMC

Oct. 19, 1990); Rose Int’l Inc. v. Overseas Moving Network, FMC

No. 96-05, 2001 WL865708, at *76 (FMC June 7, 2001). That does

not require absolute precision but does require evidence sufficient

to reasonably infer the actual loss sustained. See Yakov Kobel, 2014

WL 5316331, at *14. Reparations claims that come before the

Commission generally involve lost or damaged cargo, and the

Commission bases reparations either on the cargo market price or

the invoice price paid by the complainant. The method chosen

depends on the evidence available and which calculation more

accurately measures the actual loss. See id.

2. Complainants’ Evidence of Market Value

Complainants seek reparations based on the vehicles’ 

“market value at the port of destination.” Exceptions, 7. 

Complainants do not point to direct evidence of market value and 

instead rely on a customs broker’s valuation estimate for the 

Mercedes and a contract to purchase the Porsche as proof of their 

loss. See id. at 8-13. Complainants also refer to other miscellaneous 

documents relating to wire transfers and payments as supporting 

their claim. See id. 

 114 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a. Mercedes’ Alleged Market Value 

Complainants’ sole basis for claiming the Mercedes had a 

market value of $48,500 is the value declared for customs purposes 

when it arrived from Germany in November 2012. Id. at 8-9.4 

Complainants do not point to any evidence indicating that this 

estimate was based on the car’s actual condition or to show that it is 

a reasonable, accurate, or reliable approximation of the car’s actual 

value. See id. Instead, they focus on evidence that has no apparent 

bearing on those critical factors. See id. For example, Complainants 

state that the customs declaration was signed by customs broker 

John F. Kilroy Co. Inc. as “attorney in fact” and that Kilroy received 

a “Customs Clearance Pass Through” fee of $1,106.81 from Atlantic 

Cargo Logistics. Id. at 9. They also rely on language on the United 

States Customs and Border Patrol form indicating that the signer 

declares the information and prices on the form are true. Id. 

Complainants argue that this evidence regarding the customs 

broker and the fees paid somehow cures the defects the ALJ found 

and refutes the ALJ’s determination that their evidence was too 

speculative and unreliable to prove the Mercedes had a market value 

of $48,500. Even if the invoice and related documents show what 

Complainants contend--which is not at all clear since the documents 

do not show payments coming directly from MAVL (the Mercedes’ 

alleged owner)--all that would establish is that Kilroy was the 

customs broker and was paid a fee. See id. The evidence 

Complainants discuss in their exceptions does not cure the critical 

deficiencies in the customs declaration. See id. Namely, the 

evidence does not address the broker’s basis for assigning $48,500 

as the declared value, indicate what knowledge (if any) he had about 

the car’s actual condition, or what factors he considered in assigning 

4Complainants ask the Commission to note that Complainant (presumably 

referring to Mr. Ostrovskiy) purchased the Mercedes “three years prior to its 

import into the United States” for his personal use. Exceptions, 8. Complainants 

have not produced the invoice for the Mercedes’ purchase and do not cite any 

support in the record for this assertion or explain how (if at all) it supports the 

amount they seek for the loss of the Mercedes. See id. 

115 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

that value. Those ambiguities are not cured by language on the form 

indicating that signer represents the information provided is true. 

Even if the broker believed that the information he provided was 

accurate, that does not prove his belief was reasonable or accurate, 

since there is nothing to suggest he had a factual basis for that 

opinion. See generally Flanagan, 2003 WL 22067203, at *7-8 

(“conclusory statements” that do not demonstrate lost business with 

“any particularity” insufficientto prove reparations). 

Apart from the reliability issues with the customs 

declaration, Complainants’ own statements indicate that the 

Mercedes was not in good condition which suggests that $48,500 is 

unrealistically high. Mr. Ostrovskiy had the Mercedes shipped back 

to the United States from Germany so he could inspect it for needed 

repairs and order custom parts. See I.D.R., 7-8 (Finding Nos. 21-23). 

That plan clearly suggests that Mr. Ostrovskiy believed the 

Mercedes needed repair work. See id. Otherwise he would not have 

gone to the trouble and expense of having the car shipped back to 

the United States in the fall of 2012. The ALJ’s finding that the 

Mercedes was “sold for under $4,000 in Dubai” sometime in 2013 

also suggests that the brokers’ estimated value was unrealistic. See 

I.D.R., 9 (Finding No. 42).

The record also includes a June 2013 invoice naming 

Copart/Car Express as the seller that describes the Mercedes as 

having sustained “severe water damage” and lists $3,600 as the total 

purchase price. See I.D.R. at 9 (Finding No. 39). Complainants 

submitted this invoice in support of their remand brief. See 

Complainants’ App., Vol. 1, App. H (Bates Nos. DEF 4, DEF 15). 

The ALJ entered several findings related to this invoice which 

collectively suggest that the information it contains is not accurate. 

See I.D.R., 9 (Finding Nos. 39-41). Specifically, the ALJ found that: 

(1) the June 7, 2013 invoice “was not created and/or generated by

Copart and ‘Car Express did not purchase the VIN that is Lot

26998321,” (2) the June 7, 2013 invoice “was provided to Alexander 

Safonov after the Mercedes arrived in Dubai;” and (3) “Aleksandr

Solovyev, sole principal and officer of Car Express and [Royal

116 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance Group]” stated that those companies “were not involved 

with the 2006 Mercedes.” Id. These findings suggest that the June 

2013 invoice in and of itself does not have evidentiary value, and 

the Commission did not consider it as evidence that the Mercedes 

had actually sustained water damage, but this invoice does raise 

further doubts about the accuracy of the customs brokers’ $48,500 

estimate. 

Complainants assert that the ALJ erred in finding that the 

evidence was equally balanced because Marine Transport made 

contradictory statements about selling the Mercedes to Middle East 

Asia Alfa for $3,500. See Exceptions, 10-11. That argument 

misstates the ALJ’s reasoning and misapplies the law. As the party 

seeking reparations, Complainants had the burden of proving their 

actual injury, and the ALJ correctly found that Complainants’ 

evidence was not sufficiently reliable to reasonably infer that the 

Mercedes had a market value of $48,500. See I.D.R. 9 and 32. 

Marine Transport’s statements about the amount the Mercedes later 

sold for in Dubai was not a factor in finding that Complainants’ 

evidence insufficient. Whether Complainants have met their burden 

of persuasion does not turn on which side’s evidence is more 

credible--it is a matter of determining whether the Complainants’ 

evidence is reliable and trustworthy and supports a reasonable 

inference that they are entitled to the reparations that they seek. See 

id. at 32; see also Yakov Kobel, 2014 WL 5316331, at *13. 

Complainants have not met their burden of proving that the 

Mercedes actually had a market value of $48,500 as of November 

2012 or in the June to August 2013 timeframe when Marine 

Transport seized the car and had it sold to cover its outstanding 

charges. Further, Complainants do not point to evidence that 

supports awarding a different amount for the loss of the Mercedes. 

For all the reasons discussed above, the Commission affirms 

the ALJ’s decision denying reparations for the loss of the Mercedes. 

 117 5 F.M.C.2d
 

b. Porsche’s Alleged Market Value or Invoice Price

Complainants’ sole basis for asserting that the Porsche had a 

market value of $67,000 is a sales contract with a Russian buyer who 

agreed to purchase the car in April 2013 for that price. See 

Exceptions, 12-14. The contract provides that IAM agrees to sell the 

2011 Porsche Panamera to Sokolov Oleg Yuryevich of Moscow, 

Russia for $67,000 with delivery to Kotka, Finland to take place 

within 30 days. 

The ALJ did not adopt Complainants’ proposed findings 

regarding the sale contract. See I.D.R., 9-11. Complainants proposed 

that the ALJ find that: 

114. On April 25, 2013, IAM had sold the Porsche to

“Sokolov Oleg Yuryevich” for $67,000.00 and received

payment from him . . .

115. After complainants failed to deliver the Porsche

to Sokolov Oleg Yuryevich, and pursuant to

complainants’ contract with Mr. Sokolov, complainants

were forced to refund the $67,000.00 to him, plus an

additional penalty for failure to deliver, resulting in a

total loss of $98,088.00 for this car . . .

Complainants’ Remand Br. 32-33 (Mar. 17, 2021). Complainants 

did not object to the ALJ’s failure to adopt these proposed findings. 

See Exceptions, 12-14. 

Complainants’ arguments challenging that the ALJ’s finding 

that they failed to meet their burden of proof on reparations for the 

loss of the Porsche and related expenses ($10,000 in ocean freight) 

are not persuasive. First, Complainants challenge the ALJ’s 

determination that a $10,000 wire transfer to Royal Finance Group 

on April 22, 2013 may or may not have been a payment related to 

the Porsche Panamera and could have been payment for a different 

vehicle altogether. See Exceptions, 13. Complainants cite to a 

118 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

declaration from Aleksandr Solovyev of Royal Finance Group 

submitted in a related federal court action “wherein he explains that 

[Royal Finance] never tried to collect on invoices . . . related to the 

subject Mercedes” as support for their contention that the $10,000 

wire transfer “could only have been applied to the subject Porsche.” 

Id. (emphasis original). 

From this assertion, Complainants argue that the ALJ erred 

in finding the evidence “evenly balanced” since “there is no 

evidence on the record contradicting complainants’ argument that 

the $10,000 was payment for anything other than the subject 

Porsche.” Id. Complainants summarize their argument for 

overturning the ALJ’s denial of reparations for the loss of the 

Porsche as follows: 

At the end of the day, MTL has not provided any 

evidence to contradict complainants’ evidence that the 

Porsche was in fact sold to a customer overseas for the 

sum of $67,000 pursuant to a contract of sale, nor that 

the value of the car at the port of destination was 

anything other than $67,000 pursuant to the case law set 

forth above. Above that amount, and pursuant to the 

contract of sale, complainants were also obligated to pay 

a penalty to their customer for failure to deliver the car 

pursuant to paragraph 12.1 of the contract. 

Exceptions, 13. 

Complainants’ argument misapplies the law and turns their 

burden of proof on its head. See id. at 13-14. As the party seeking 

reparations, Complainants bear the burden of producing reliable 

evidence supporting a reasonable inference that $67,000 equals or is 

at least a reasonable approximation of their actual injury for the loss 

of the Porsche and showing that they actually paid the $10,000 for 

ocean freight or other charges they now seek to recover. See Yakov 

Kobel, 2014 WL 5316331, at *13. Complainants’ evidence rises or 

falls on its own merit. See id. It is not a question of whether Marine 

119 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transport produced evidence refuting Complainants’ documents or 

whether its evidence or arguments are less credible. Respondents do 

not have the burden of proof. If the Complainants’ evidence is 

inherently too weak or unreliable to reasonably infer that the amount 

they seek reasonably approximates their actual injury--they have not 

met their burden of persuasion and their claim fails and reparations 

are not awarded. See id. That is exactly how the ALJ applied the 

law. 

Further, multiple findings--which Complainants do not 

challenge--cast doubt on the reliability of $67,000 as a reliable 

reflection of the Porsche’s actual market value. For example, the 

ALJ found that Aleksandr Solovyev, sole principal and officer of 

[Royal Finance] and Car Express, stated that ‘Car Express 

purchased the Porsche Panamera for $41,940 on or about April 18, 

2013, at Plaintiff’s request with financing provided by Royal 

Finance Group.’” I.D.R., 9-10 (Finding No. 44). Likewise, the ALJ 

found that an invoice from Royal Finance referencing the 2011 

Porsche Panamera indicated the car cost $35,379 plus shipping and 

other charges which brought the total cost to $40,429. Id. at 10 

(Finding No. 46). According to the ALJ’s findings, another 

document dated April 23, 2013 from Insurance Auto Auctions 

(IAA) listed a price of $40,500 for the Porsche and a $46,440 total 

with variousfees included. Id. (Finding No. 48).5 

The invoices on which the ALJ’s findings are based involve 

other entities and there is no mention of IAM--the Porsche’s alleged 

owner. See, e.g., I.D.R., 10-11 (Finding Nos. 49-54). As such, they 

clearly support the ALJ’s determination that while the evidence does 

not clearly show that Complainants actually purchased or paid for 

the Porsche. I.D.R., 32. As the ALJ stated, while it was “possible” 

that Complainants wired $5,500 to IAA on April 18, 2013 and 

5The Commission did not take into account evidence suggesting that the Porsche 

was purchased as a salvage vehicle since the ALJ concluded that it “is not clear if 

these [documents] are reliable. I.D.R., 9 (Finding No. 43). If the Porsche was in 

fact sold as a salvage vehicle, that would further undermine Complainants’ 

$67,000 reparations claim. 

120 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$10,000 to Royal Finance on April 22, 2013 for the Porsche 

Panamera, it is also possible that “those payments were made by 

someone else or were for a different shipment.” See id. The ALJ also 

noted that the lack of clear evidence is consistent with and perhaps 

attributable to Complainant’s practice of “conduct[ing] their 

business with limited written documentation, including making 

verbal requests and agreements,” which makes it more difficult for 

them to “provid[e] evidence to establish actual injury.” Id. 

Complainants appear to argue that it is simply a matter of 

connecting the dots between a series of documents (including 

invoices, checks, and wire transfers) that collectively support their 

reparations claim and show that IAM actually paid for the Porsche. 

See Exceptions, 13-14. The record does not support that argument. 

Complainants do not point to a clear traceable line between these 

various documents which leads one to reasonably conclude that 

IAM paid $67,000 for the Porsche or incurred the other losses 

(ocean freight) it now seeks to recover from Marine Transport. See 

id. The ALJ’s determination that the evidence istoo speculative and 

inconclusive to support Complainants’ reparations claim is 

supported by the record and sound legal reasoning. Further, 

Complainants do not point to evidence that supports awarding a 

different amount for the loss of the Porsche or related expenses. 

For all the reasons discussed above, the Commission affirms 

the ALJ’s decision denying reparations for the loss of the Porsche. 

D. Request to be Declared the Prevailing Party

Complainants ask the Commission to declare them the 

prevailing party based on the ALJ’s determination that Marine 

Transport violated § 41102(c). Exceptions, 6-7. Complainants assert 

that they qualify as prevailing even though no reparations were 

awarded because the ALJ’s determination that Marine Transport 

violated § 41102(c) altered the parties’ legal relationship. Id. 

121 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 41305(e) provides that a prevailing party “may be 

awarded reasonable attorney fees” in any private party action 

brought under § 41301. 46 U.S.C. § 41305(e). This provision was 

enacted as part of the Howard Coble Coast Guard and Maritime 

Transportation Act of 2014, Pub. L. No. 113-281, § 402, 128 Stat. 

3022 (Dec. 18, 2014). The Commission adopted implementing 

regulations and provided further guidance on qualifying to recover 

fees and the discretionary factors the Commission will consider in 

deciding whether the petitioning party should recover its attorney 

fees. See 46 C.F.R. § 502.254; Final Rule: Organization and 

Functions; Rules of Practice and Procedure; Attorney Fees (Final 

Rule), 81 Fed. Reg. 10508 (Mar. 1, 2016). 

Prevailing party status is the first step of the two-party 

inquiry the Commission engages in to decide whether to grant a 

petition for attorneys’ fees under 46 C.F.R. § 502.254(c). The 

Commission’s regulations provide that “the Commission may, upon 

petition, award the prevailing party reasonable attorney fees” in a 

private complaint proceeding brought under 46 U.S.C. § 41301. 

Complainants’ request to be declared the prevailing party is 

premature because there is not yet a final decision in this matter. 

Petitions for attorney fees are due “within 30 days after a decision 

becomes final.” 46 C.F.R. § 502.254(c). The ALJ’s Initial Decision 

on Remand is not a final order since Complainants filed exceptions. 

The Commission’s decision on Complainants’ exceptions will not 

become final until the period for appealing that decision to the 

United States Court of Appeals has expired. Under 28 U.S.C. § 

2344, “[a]ny party aggrieved by the final order” issued by the 

Commission has 60 days following entry of the order to petition for 

its review. Therefore the Commission’s order in this case will not 

become final until the 60 days allotted for appeal has expired. 

For all the reasons discussed above, the Commission denies 

as premature Complainants’ request to be declared the prevailing 

party. 

122 5 F.M.C.2d
 

IV. CONCLUSION 

The Commission hereby: 

(1) denies Complainants’ exceptions; and

 (2) affirms the ALJ’s Initial Decision in its entirety. 

By the Commission. 

 William Cody 

Secretary 

123 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

OCEAN NETWORK EXPRESS (NORTH AMERICA), INC. AND DOCKET NO. 21-17 OCEAN NETWORK EXPRESS, PTE., LTD. - POSSIBLE

VIOLATIONS OF 46 U.S.C. § 41102(C) 

Served: June 28, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

I 1 NITIAL DECISION APPROVING SETTLEMENT AGREEMENT

I. Background and History

On June 23, 2022, Respondent Ocean Network Express, Pte., Ltd. (“ONE”) and the 

Bureau of Enforcement (“BOE”), filed a joint motion for approval of a proposed settlement 

agreement by the parties and a joint memorandum for, and memorandum in support of, a 

proposed settlement (“Motion”), together with a copy of the settlement agreement. Respondent 

Ocean Network Express (North America), Inc. was dismissed from this proceeding on May 4, 

2022, and is no longer a party. The parties seek approval of the settlement agreement, 

confidential treatment of the settlement agreement, and, upon approval of the settlement 

agreement, dismissal of this proceeding with prejudice. Motion at 1, 6. 

The Federal Maritime Commission (“Commission”) initiated this proceeding on 

December 30, 2021, by issuing an Order of Investigation and Hearing (“OIH”) to determine 

whether Respondents violated section 41102(c) of the Shipping Act by overbroadly defining and 

applying the definition of merchant in ONE’s bill of lading in such a manner as to unilaterally 

impose joint and several liability for freight and/or charges on a party with whom ONE was not 

in contractual privity and who had not consented to be bound by the terms of the bill of lading. 

OIH at 2. In addition, the Commission ordered the proceeding to be expedited, with an initial 

decision issued by an Administrative Law Judge within six months of the date of the OIH and 

the final decision of the Commission issued within ninety days of service of the Initial Decision. 

OIH at 7-8. 

The proceeding was temporarily stayed while the Commission considered a petition 

seeking reconsideration and rescission, which was denied on January 28, 2022. A motion to 

dismiss was denied on February 23, 2022. The parties engaged in discovery, with an order 

granting a motion to individually identify respondents issued on March 28, 2022, and an order on 

motions to compel and to dismiss issued on May 4, 2022. Briefing deadlines were set but the 

parties requested multiple extensions while they negotiated the settlement agreement. 

1 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

124 5 F.M.C.2d
II. Settlement Agreement

The parties describe the settlement agreement, stating: 

The Settlement Agreement addresses the conduct alleged in the [OIH] to 

constitute potential violations of the Shipping Act. It resolves the proceeding in 

the best interests of the Parties and the shipping public, without the need for 

further litigation, and it requires ONE to take certain measures intended to address 

the conduct alleged in the [OIH], without any admission of violations by the 

Respondent. 

Motion at 2. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a long history of approving settlement agreements that meet the 

required criteria, including in enforcement proceedings. 

The Commission’s decisions and regulations have long indicated a broad policy 

favoring settlement. In reviewing a proposed settlement, the Commission 

evaluates whether it would contravene any law or public policy, and whether it is 

“fair, reasonable, and adequate.” As the parties note, the Commission weighs 

enforcement policy in terms of deterrence and compliance, likely costs and delay, 

and “pragmatic litigative possibilities” regarding the proceeding’s potential

outcomes. 

Possible Unfiled Agreement Between Hyundai Merchant Marine Company, Ltd. and 

Mediterranean Shipping Co., S.A., Docket No. 97-07, 2000 FMC LEXIS 2 at *4 (FMC May 2, 

2000) (citing Old Ben Coal Co. v. Sea-Land Serv., 21 F.M.C. 506, 512-513; 18 S.R.R. 1085, 

1091 (ALJ Nov. 29, 1978); Far Eastern Shipping Co. – Possible Violations of Sections 16, 

Second Paragraph 18(b)(3) and 18(c), Shipping Act, 1916, 21 S.R.R. 743, 1014 (ALJ Mar. 25, 

1982)). 

The Commission has routinely held that negotiated settlement agreements should 

be approved unless the agreements present one of a few defects requiring 

disapproval. The Commission has consistently adhered to a policy of encouraging 

settlements and engaging in every presumption which favors a finding that they 

are fair, correct, and valid. Despite the general preference for approval of 

settlement agreements, the Commission does not merely rubber stamp any 

proffered settlement. Instead, the Commission typically reviews a settlement 

 125 5 F.M.C.2d
agreement to ensure that it does not contravene law or public policy. Such review 

typically includes evaluating factors to determine that the settlement agreement 

was not a product of fraud, duress, undue influence, or mistake. The Commission 

also reviews the terms of settlement agreements to ensure that the terms are fair, 

reasonable, and adequate. The review process frequently involves a balancing of 

the likelihood of success on the merits against the cost and complexity of 

proceeding to final judgment. 

World Chance Logistics (Hong Kong), Ltd. and Yu, Chi Shing, a.k.a. Johnny Yu – Possible 

Violations of Section 10 of the Shipping Act of 1984, Docket No. 09-07, 2010 FMC LEXIS 27 at 

*5, 31 S.R.R. 1346, 1350 (FMC May 20, 2010) (internal citations omitted).

Here, the parties assert that the settlement agreement “negotiated by BOE and ONE, with 

the advice and assistance of their respective counsel, is reasonable and not inconsistent with any 

law or policy;” that the parties “have carefully considered the costs, benefits, and risks of further 

litigation, and determined that settlement is in their mutual interests, as well as that of the 

shipping public;” and that the settlement “was reached without fraud, duress, undue influence, or 

any other defect that would bar its approval.” Motion at 3. The parties further assert that 

“proposed settlements are to be evaluated on the basis of balancing agency enforcement policy, 

deterrence by respondents, the industry, and the shipping public with the litigative probabilities, 

litigative and administrative costs, and such other matters as justice may require” and that the

“balance favors approval of this proposed settlement.” Motion at 5.

A review of the settlement agreement indicates that it satisfies the criteria for approval. 

The terms of the settlement agreement appear to be fair, reasonable, and adequate; the agreement 

does not appear to contravene law or public policy; and the agreement serves the interests of both 

BOE and Respondent by preventing the need for them to engage in costly, uncertain, and 

protracted litigation of the issues in contention. “The policy of encouraging and approving 

settlements is firmly embedded in precedent and is especially welcome as a means for the 

Commission and respondents to conserve their resources.” Direct Container Line Possible 

Violations of Sections 10(a)(1) and 10(b)(1) of the Shipping Act of 1984; Direct Container Line 

Inc. and Owen Glenn Possible Violations of Section 10(a)(1) of the Shipping Act of 1984, Docket 

Nos. 99-01 and 99-06, 1999 FMC LEXIS 7 at *6 (ALJ June 29, 1999). Therefore, the settlement 

agreement is reasonable and will be approved. 

III. Confidential Treatment Request

The parties further request that the settlement agreement be held confidential by the 

Commission, stating that the Commission routinely honors such requests and citing Commission 

Rule 5 and private party decisions. Motion at 4. In addition, the terms of the settlement 

agreement require the parties to keep the terms of the settlement agreement confidential. Motion 

at 4. The parties state that this “confidentiality requirement is an important and necessary 

element of the Settlement Agreement; it could be compromised by a breach of such 

confidentiality. The Parties therefore respectfully request that the Commission keep the 

unredacted copy of the Settlement Agreement confidential.” Motion at 4. Because the entire

settlement agreement is confidential, no public version is provided. Motion at 4. 

 126 5 F.M.C.2d
Commission Rule 603(a), governing the assessment of civil penalties in Commissioninstituted proceedings, states that the “full text of any settlement must be included in the final 

order of the Commission.” 46 C.F.R. § 502.603(a). The parties do not address this requirement. 

This is an expedited proceeding which has been heavily litigated. The confidentiality 

provision is central to the agreement to settle this proceeding. Given both of these factors, the 

confidentiality provision will be permitted due to the unique circumstances of this particular 

proceeding. However, in future enforcement proceedings, the parties must address the 

requirements of Commission Rule 603(a) when submitting settlements and should not assume 

that confidentiality provisions will be approved. 

If enforcement proceedings are meant to deter violations of the Shipping Act and 

Commission regulations as well as to inform the shipping public of regulatory requirements, 

reliance on confidential material impedes those goals. The requirement that the full text of 

settlements be included in the Commission’s order benefits the public. This is especially true 

where an agreement requires a respondent “to take certain measures intended to address the

conduct alleged” and where a respondent has “agreed to adjust their conduct to address the 

Commission’s concerns.” Motion at 2, 5. Even where it may be appropriate to redact particular 

words in a settlement agreement, confidential treatment should not be requested or expected for 

the entire agreement. 

For the reasons outlined above, under the unique circumstances of this settlement and this 

expedited proceeding, the confidentiality provision will be permitted. The full text of the 

settlement agreement has been reviewed by the undersigned and is available to the Commission 

to review while maintaining the required confidentiality. 

IV. Order

Accordingly, upon consideration of the motion, settlement agreement, and the record, and

good cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between the Bureau of 

Enforcement and Ocean Network Express, Pte., Ltd. be GRANTED. It is 

FURTHER ORDERED that the request for confidential treatment be GRANTED and 

the settlement agreement be maintained in the Secretary’s confidential files. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 127 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

FULTER LOGISTICS LLC, REVOCATION OF OCEAN

TRANSPORTATION INTERMEDIARY LICENSE NO. 027912NF DOCKET NO. 22-09 

Served: July 26, 2022

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge.

INITIAL DECISION R 1 EVOKING OCEAN TRANSPORTATION LICENSE

I. INTRODUCTION

A. Summary

Respondent Fulter Logistics LLC (“Fulter Logistics”) is licensed as an ocean 

transportation intermediary (“OTI”) by the Federal Maritime Commission (“FMC” or 

“Commission”). On March 11, 2022, the Commission’s Bureau of Certification and 

Licensing (“BCL”) notified Fulter Logistics that the Commission intended to revoke its 

OTI license on the basis that Fulter Logistics had failed to respond to a lawful inquiry by 

the Commission and lacks the necessary character to render ocean transportation 

intermediary services under the Commission’s regulations at 46 C.F.R. § 515.11(a)(2). 

Fulter Logistic then requested a hearing on the proposed revocation pursuant to the 

Commission’s regulations at 46 C.F.R. § 515.17 and 46 C.F.R. Part 502, Subpart X. In 

accordance with the provisions of 46 C.F.R. § 502.702(a), the Secretary of the Commission 

assigned this proceeding to the Office of Administrative Law Judges (“OALJ”) for 

adjudication. 

As required under the Commission’s Rules at Subpart X, BCL and the 

Commission’s Bureau of Enforcement (“BOE”) were notified that Fulter Logistics had 

requested a hearing and BOE was ordered to serve a copy of the revocation notice and 

materials supporting the revocation notice. In addition, Fulter Logistics was informed that 

it had a right to file a response within thirty days of BOE’s submission. On the day of the 

established deadline for Fulter Logistics to file its response, Fulter Logistics sent an email 

to the Secretary indicating that it intended to file a motion requesting an extension of the 

deadline to submit its response, but then failed to file the motion or to participate any 

further in the proceeding despite a reminder from OALJ. BOE subsequently submitted a 

1 This initial decision will become final within 22 days of service in the absence of 

exceptions filed by either party or review by the Commission. 46 C.F.R. § 502.708(c). 

128 5 F.M.C.2d
reply brief in support of its argument that Fulter Logistics’ license should be revoked. As a 

result of Fulter Logistics’ failure to submit any evidence to support its request for a 

hearing, the evidence of record consists solely of the materials submitted by BOE.

As discussed below in greater detail, the evidence provided by BOE supports a 

finding that Fulter Logistics’ OTI license should be revoked and no evidence in the record 

contradicts or disproves that evidence. Fulter Logistics’ OTI license is therefore revoked.

II. BACKGROUND

A. Factual Allegations

Respondent Fulter Logistics is a limited liability Delaware entity with its principal 

place of business in the State of Florida, operating under the name Fulter Logistics USA 

LLC. BOE 2.

2

It has been licensed with the Commission as an OTI since December 31, 

2019. BOE 2. Nicolas Soria is Fulter Logistics’ qualifying individual (“QI”). BOE 6. 

On July 28, 2021, Fulter Logistics submitted a Form FMC-18 Application to BCL 

to add a trade name to Fulter Logistics’ OTI license. During processing of the application, 

BCL discovered that there was an undisclosed judgment against Fulter Logistics dated 

July 11, 2021, in the amount of $12,832.37, in favor of Platinum Cargo Logistics Inc. 

(“Platinum Logistics”). BOE 39. Part B, item 7 of Form FMC-18 requires an applicant to 

disclose a legal judgment for debt against it and the Commission’s Rules at 46 C.F.R 

§ 515.20(e) require licensees to report changes of material fact to the Commission within

thirty days. Fulter failed to report the debt judgment against it during its application to add

a trade name and within the thirty-day period required by Rule 515.20(e). When questioned

about the judgment on October 27, 2021, Fulter Logistics stated that it would pay the debt

judgment but did not explain why it failed to disclose the debt to the Commission. Further,

upon follow-up, BCL staff was advised by Platinum Logistics on November 17, 2021, that

Fulter Logistics still had not paid the debt judgment. To date, Fulter Logistics has neither

submitted proof to BCL that it has paid the debt judgment nor provided an explanation why

it failed to disclose the debt judgment to the Commission. BOE 2.

In addition, BCL discovered that there had been two recent complaints against 

Fulter Logistics - one by GLT Transportation Group filed in the Miami-Dade County 

Court, Florida on September 29, 2021, for failure to pay freight charges totaling 

$17,778.50, and the second by Paycargo LLC, dated February 3, 2021, which was 

voluntarily dismissed on May 21, 2021. BOE 3.

Thirdly, BCL learned of past debt owed by Fulter Logistics’ QI, Nicolas Soria, 

incurred when Mr. Soria was the QI and twenty percent owner of Talwin Transport Service 

LLC (“Talwin”), a Commission-licensed OTI. The debt by Nicolas Soria resulted in a 

transportation related claim against Talwin’s bond, which Mr. Soria entered into an 

agreement with Roanoke Trade Services to pay but subsequently defaulted on the payment.

2 Citations to BOE # are to the bates page numbers in BOE’s Submission of Materials 

Supporting Notice of Revocation Appendix.

 129 5 F.M.C.2d
Mr. Soria paid the debt only after BCL learned about the debt and inquired about it in 

connection with BCL’s processing of Fulter Logistics’ application to add a trade name to 

its OTI license. BOE 3.

As a result of these events and Fulter Logistics’ failure to respond to multiple FMC 

requests for information, BCL decided to revoke Fulter Logistics’ OTI license.

B. Procedural History

On March 31, 2022, the Secretary of the Commission issued a Notice of Hearing 

Request and Assignment, noting that on March 11, 2022, BCL had notified Fulter Logistics

by letter that the Commission intended to revoke Fulter Logistics’ OTl license. The 

Secretary also noted that on March 29, 2022, Fulter Logistics had requested a hearing on 

the proposed revocation pursuant to the Commission’s Rules at 46 C.F.R. § 515.17 and 46 

C.F.R. Part 502, Subpart X. Pursuant to Rule 702(a), the Secretary assigned this proceeding

to OALJ for adjudication. 46 C.F.R. § 502.702(a).

On April 7, 2022, as required under Rule 702(b), a Notice and Initial Order (“Initial 

Order”) was issued, notifying BCL and BOE that Fulter Logistics had requested a hearing

and directing BOE to file by May 9, 2022, a copy of the notice given to Fulter Logistics

and BCL’s materials supporting the notice. 46 C.F.R. § 502.702(b). The initial order also 

stated that “BOE may file a brief with legal arguments, proposed findings of fact, or 

additional information, and any requests for confidential treatment as well as an appendix

with supporting documents.” Initial Order at 1. 

On May 9, 2022, BOE filed a Notice of Appearance, Submission of Materials 

Supporting Notice of Revocation, and an Appendix containing twenty exhibits. On May 11, 

2022, pursuant to Rule 703 (46 C.F.R. § 502.703), a Notice of Right to Respond was

issued, stating in pertinent part:

Pursuant to Rule 703, Fulter Logistic is hereby notified of its right to file a 

response to the May 9, 2022, filing. 46 C.F.R. § 502.703. Fulter Logistics

may file a brief with legal arguments, proposed findings of fact, additional 

information, and any requests for confidential treatment as well as an 

appendix with supporting documents. Fulter Logistics’ response is due on 

June 10, 2022. 46 C.F.R. § 502.703(a).

Pursuant to Rule 704, BOE may file a reply brief within twenty days of 

Fulter Logistics’ filing. 46 C.F.R. 502.704. This notice serves as BOE’s 

notification of its right to file a reply.

Notice of Right to Respond at 1.

On June 10, 2020, an email was received from Fulter Logistics stating:

 130 5 F.M.C.2d
Good morning Mr. Secretary, 

Per 46 C.F.R. 502.702 I am requesting [an] extension date for the 

Submission of Materials Supporting Notice of Revocation. Finishing las[t] 4 

Appendix. 

Waiting your confirmation, 

All[] my Best. 

Email dated Friday, June 10, 2022 9:16 AM, From: Nicolas Soria, QI of Fulter Logistics; 

To: Serena Tang (BOE), Office of the Secretary; CC: ALJ (and other BOE and BCL staff). 

On June 10, 2022, the Secretary responded to Mr. Nicolas Soria in pertinent part as 

follows: 

Good morning Mr. Soria, 

The Commission’s Rules on Practice and Procedure and the ALJ’s Initial 

Order provide instruction on requesting extension of deadlines. Please 

refer to § 502.102 which includes the requirements for motions for 

enlargement of time to file documents, and § 502.71 which indicates you 

must confer with the opposing party (which is reiterated in the ALJ’s 

Initial Order). I have copied the regulations below. 

Email dated Friday, June 10, 2022 11:48 AM, From: Secretary (of the FMC); To: Nicolas 

Soria; CC: Judges Mailbox (and the BOE and BCL offices and staff included in the email 

from Mr. Soria). 

On June 10, 2022, another email was received from Mr. Soria, stating: 

Mr. Secretary good afternoon! 

I really appreciated your email and legal information about the regulation 

(My apologies)[.] Following now procedures and reg. 

Best Regards, 

Email dated Friday, Friday June 10, 2022 12:50 PM, From: Nicolas Soria; To: the 

Secretary; CC: Judges Mailbox (and the BOE and BCL staff included in the previous email 

exchanges).

No materials nor any further communication was received from Fulter Logistics. 

Therefore, on June 22, 2022, OALJ sent an email to Fulter Logistics, copying BOE and 

stating: “The Judge expected to receive a filing from Fulter Logistics on June 10, 2022. If 

additional time is needed, a motion requesting an extension must be filed. Any filings 

should be copied to this email address.” Fulter Logistics did not respond to the email from 

OALJ and no submissions or communications have been received from Fulter Logistics to 

date. 

 131 5 F.M.C.2d
On June 30, 2022, BOE filed a reply brief, arguing that a revocation of Fulter 

Logistics’ OTI license is warranted by the Shipping Act of 1984, Commission regulations, 

and established legal precedent. As previously noted, due to Fulter Logistics’ failure to 

submit any arguments or evidence in the proceeding, the evidence of record consists solely 

of the materials submitted by BOE.

III. DISCUSSION

A. BOE’s Arguments

BOE submitted twenty exhibits and a verified statement by Luther Johnson, an 

industry analyst at BCL, in support of its contention that revocation of Fulter Logistics’ 

OTI license is warranted. BOE argues that revocation of Fulter Logistics’ OTI license 

should be upheld because: Fulter Logistics and its QI, Soria, failed to notify the 

Commission of three changes in material facts, contrary to 46 C.F.R. §§ 515.12(e) and 

515.20(e) of the Commission’s regulations; failed three times to respond to BCL’s lawful 

inquiries, contrary to the Commission’s regulations at 46 C.F.R. § 515.16(a)(2); made 

material false and misleading statements to BCL, contrary to the Commission’s regulations 

at 46 C.F.R. § 515.16(a)(3); and lacks the necessary character to render OTI services as set 

forth in the Commission’s regulations at 46 C.F.R. §§ 515.11 and 515.16(a)(4). BOE Reply 

at 8-12. BOE asks that an order be issued directing Fulter Logistics to cease and desist all 

OTI activities. BOE Reply Brief at 12.

B. Controlling Authority

An applicant seeking an OTI license must demonstrate through its qualifying 

individual that it has the necessary experience by showing that “its qualifying individual 

has a minimum of three years’ experience in ocean transportation intermediary activities in 

the United States, and the necessary character to render ocean transportation intermediary 

services.” 46 C.F.R. § 515.11(a)(1). The Commission shall conduct an investigation of the 

applicant’s qualifications for a license. Such investigations may address:

(a) The accuracy of the information submitted in the application;

(b) The integrity and financial responsibility of the applicant;

(c) The character of the applicant and its qualifying individual; and

(d) The length and nature of the qualifying individual’s experience in

handling ocean transportation intermediary duties.

46 C.F.R. § 515.13.

The Shipping Act grants authority to revoke an OTI’s license under certain 

conditions.

 132 5 F.M.C.2d
The Federal Maritime Commission, after notice and opportunity for a 

hearing, shall suspend or revoke an ocean transportation intermediary’s 

license if the Commission finds that the ocean transportation intermediary –

(1) is not qualified to provide intermediary services; or

(2) willfully failed to comply with a provision of this part or with an

order or regulation of the Commission.

46 U.S.C. § 40903(a). 

Further, under the Commission’s regulations a license may be revoked or 

suspended for any of the following reasons: 

(1) Violation of any provision of the Act, or any other statute or

Commission order or regulation related to carrying on the business of an

ocean transportation intermediary;

(2) Failure to respond to any lawful order or inquiry by the Commission;

(3) Making a materially false or misleading statement to the Commission in

connection with an application for a license or an amendment to an

existing license;

(4) A Commission determination that the licensee is not qualified to render

intermediary services; or

(5) Failure to honor the licensee’s financial obligations to the Commission.

46 C.F.R. § 515.16(a). 

C. BOE Demonstrates that Revocation of Fulter Logistics’ OTI License is

Warranted

The materials and brief submitted by BOE support a finding that Fulter Logistics’ 

OTI license should be revoked, and no evidence of record contradicts BOE’s arguments or 

the materials BOE submitted in support of its arguments. Thus, the record supports a 

finding that Fulter Logistics and its QI, Mr. Soria, failed to notify the Commission of 

changes in material facts, contrary to 46 C.F.R. §§ 515.12(e) and 515.20(e) of the 

Commission’s regulations; failed to respond to BCL’s lawful inquiries, contrary to the 

Commission’s regulations at 46 C.F.R. § 515.16(a)(2); made material false and misleading 

statements to BCL, contrary to the Commission’s regulations at 46 C.F.R. § 515.16(a)(3); 

and lacks the necessary character to render OTI services as set forth in the Commission’s 

regulations at 46 C.F.R. §§ 515.11 and 515.16(a)(4). 

 133 5 F.M.C.2d
Based on the foregoing, it is found that the evidence supports a finding that Fulter 

Logistics and its qualifying individual, Nicolas Soria, violated the Commission’s 

regulations at 46 C.F.R. §§ 515.12(e) and 515.20(e) and that Fulter Logistics and its 

qualifying individual, Nicolas Soria, lack the necessary character to render OTI services as 

set forth in the Commission’s regulations at 46 C.F.R. § 515.11(a). Accordingly, Fulter 

Logistics’ OTI license is revoked.

IV. ORDER

Upon consideration of the evidence and arguments submitted by BOE, and for the

reasons stated above, it is hereby 

ORDERED that Fulter Logistics’ ocean transportation license number 027912NF

be REVOKED pursuant to 46 C.F.R. § 515.16(a) and 46 U.S.C. § 40903(a). It is 

FURTHER ORDERED that Fulter Logistics LLC cease and desist all ocean 

transportation intermediary activities.

Erin M. Wirth

Chief Administrative Law Judge

 134 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

C.V. INT’L SERVICES LLC, INTENT TO DENY AN OCEAN

TRANSPORTATION INTERMEDIARY APPLICATION

DOCKET NO. 22-10

Served: July 26, 2022

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge.

INITIAL DECISION DENYING OCEAN T 1 RANSPORTATION INTERMEDIARY LICENSE

I. INTRODUCTION

A. Summary

On July 14, 2021, C.V. Int’l Services LLC (“C.V. Int’l”) applied for an ocean 

transportation intermediary (“OTI”) license with the Federal Maritime Commission (“FMC” or 

“Commission”). On March 11, 2022, the Commission’s Bureau of Certification and Licensing 

(“BCL”) notified C.V. Int’l that the Commission intended to deny its OTI license on the basis 

that C.V. Int’l lacks the necessary character to render ocean transportation intermediary services 

under the Commission’s regulations at 46 C.F.R. § 515.11. On March 28, 2022, C.V. Int’l 

requested a hearing on the proposed revocation pursuant to the Commission’s regulations at 46 

C.F.R. § 515.17 and 46 C.F.R. Part 502, Subpart X. In accordance with the provisions of 46

C.F.R. § 502.702(a), the Secretary of the Commission assigned this proceeding to the Office of

Administrative Law Judges (“OALJ”) for adjudication.

As required under the Commission’s Rules at Subpart X, BCL and the Commission’s 

Bureau of Enforcement (“BOE”) were notified that C.V. Int’l had requested a hearing, and BOE 

was ordered to serve a copy of the denial notice and materials supporting the denial notice. BOE 

filed the required documents on May 12, 2022. C.V. Int’l was then informed that it had a right to 

file a response within thirty days of BOE’s submission. C.V. Int’l failed to file a response or to 

participate any further in the proceeding, despite a reminder from OALJ. BOE subsequently 

submitted a reply brief in support of its argument that C.V. Int’l’s license application should be 

denied for lack of the necessary character to hold a license under section 40903 of the Shipping 

Act of 1984. 46 U.S.C. § 40903. As a result of C.V. Int’l’s failure to submit any evidence to 

support its request for a hearing, the evidence of record consists solely of the materials submitted 

by BOE. 

1 This initial decision will become final within 22 days of service in the absence of exceptions 

filed by either party or review by the Commission. 46 C.F.R. § 502.708(c).

135 5 F.M.C.2d
As discussed below in greater detail, the evidence provided by BOE supports a finding 

that C.V. Int’l’s application for an OTI license should be denied, and no evidence in the record 

contradicts or disproves that evidence. C.V. Int’l’s application for an OTI license is therefore

denied. 

II. BACKGROUND

A. Factual Allegations

Applicant is a Florida limited liability company with its principal place of business in the 

State of Florida, operating under the name C.V. Int’l Services LLC doing business as C.V. Int’l 

Ocean Services. BOE 7

2

, BOE 135. On July 14, 2021, BCL received an FMC Form-18 

application on behalf of C.V. Int’l. Verified Statement of Michael Sumrall (“Sumrall Verified 

Statement”) at 1. Mr. Christian Velazquez is C.V. Int’l’s proposed qualifying individual (“QI”); 

BOE 7. The deficiencies in C.V. Int’l’s application for an OTI license, as described by BCL, are 

summarized as follows:

On or about July 15, 2021, a standard background check, “Accurint,” was 

conducted. The Accurint report revealed Velazquez, CV Int’l’s proposed QI, has a 

felony conviction for trafficking in cocaine and has other unrelated, but relevant, 

criminal acts/arrests. None of this information was disclosed in the applicant’s 

FMC-18. BOE Exhibit 5, FMC-18 at BOE 0007-0018; BOE Exhibit 12, Federal 

Criminal Court Records Search at BOE 0145-0172.

On or about July 15, 2021, an Acknowledgement Letter was sent to Velazquez via 

the FMC18 Message Center requesting, among other things, the declaration of all 

prior criminal convictions and a request for documentation demonstrating the 

resolution of all prior criminal convictions. BOE Exhibit 6, FMC-18 

Correspondence Log at BOE 0100-0101. See also Attachment A, BCL Applicant 

Acknowledgement Letter.

On or about July 15, 2021, Velazquez submitted a revised FMC-18 for C.V. Int’l. 

In the revised application no prior criminal conviction or activity was disclosed. 

BOE Exhibit 5, FMC-18 at BOE 0019-0031; BOE Exhibit 6, FMC-18 

Correspondence Log at BOE 0101.

On or about July 23, 2021, [BCL] requested Velazquez to update information. 

Among other things, [BCL] asked that he indicate all prior criminal convictions. 

BOE Exhibit 6, FMC-18 Correspondence Log at BOE 0102.

On or about July 29, 2021, Velazquez submitted a revised FMC-18 for C.V. Int’l. 

In the updated application no prior criminal convictions were disclosed. BOE 

Exhibit 5, FMC-18 at BOE 0032-0044; BOE Exhibit 6, FMC-18 Correspondence 

Log at BOE 0103.

2 Citations to BOE # are to the bates page numbers in BOE’s Submission of Materials 

Supporting Notice of Denial.

 136 5 F.M.C.2d
On or about August 4, 2021, Velazquez updated CV Int’l’s application via the 

message center. He specifically addressed prior criminal activity, stating, “I have 

never been convicted of anything. I have just have been arrested for some things 

in the past, and dismissed in court.” Additionally, he provided court documents 

relating to criminal activity in Miami-Dade County, FL. BOE Exhibit 6, FMC-18 

Correspondence Log (BOE 0104). Exhibit 14: Criminal Charges 11th Judicial 

Circuit Miami-Dade County, FL – Applicant (BOE 191-194). 

Sumrall Verified Statement at 2, ¶¶ 7-13 (paragraph numbering omitted). 

Subsequent efforts by BCL to obtain from C.V. Int’l an updated application correcting 

the deficiencies in C.V. Int’l’s FMC-18 Application and disclosing all crimes for which Mr. 

Velazquez has been charged or convicted were unsuccessful. Sumrall Verified Statement at 2-3, 

¶¶ 14-24. As a result of these events, as well as C.V. Int’l’s failure to respond to multiple FMC 

requests for information, BCL notified Mr. Velazquez that it intended to deny C.V. Int’l’s OTI 

application. 

B. Procedural History

On March 31, 2022, the Secretary of the Commission issued a Notice of Hearing Request 

and Assignment, noting that on March 11, 2022, BCL had notified C.V. Int’l by letter that the 

Commission intended to deny C.V. Int’l’s OTl license. The Secretary also noted that on 

March 28, 2022, C.V. Int’l had requested a hearing on the proposed denial pursuant to the 

Commission’s Rules at 46 C.F.R. § 515.17 and 46 C.F.R. Part 502, Subpart X. Pursuant to Rule 

702(a), the Secretary assigned this proceeding to OALJ for adjudication. 46 C.F.R. § 502.702(a). 

On April 12, 2022, as required under Rule 702(b), a Notice and Initial Order (“Initial 

Order”) was issued, notifying BCL and BOE that C.V. Int’l had requested a hearing and 

directing BOE to file by May 12, 2022, a copy of the notice given to C.V. Int’l and BCL’s 

materials supporting the notice. 46 C.F.R. § 502.702(b). The Initial Order also stated that “BOE 

may file a brief with legal arguments, proposed findings of fact, or additional information, 

including requests for confidential treatment.” Initial Order at 1. 

On May 12, 2022, BOE filed a Notice of Appearance, Submission of Materials 

Supporting Notice of Revocation, and an Appendix containing 24 exhibits. On May 18, 2022, 

pursuant to Rule 703 (46 C.F.R. § 502.703), a Notice of Right to Respond was issued, stating in 

pertinent part: 

Pursuant to Rule 703, C.V. Int’l Services LLC (“C.V. Int’l”) is hereby notified of 

its right to file a response to the May 12, 2022, filing. 46 C.F.R. § 502.703. C.V. 

Int’l may file a brief with legal arguments, proposed findings of fact, additional 

information, and any requests for confidential treatment as well as an appendix 

with supporting documents. C.V. Int’l’s response is due on June 17, 2022. 46 

C.F.R. § 502.703(a).

Pursuant to Rule 704, BOE may file a reply brief within twenty days of C.V. 

Int’l’s filing. 46 C.F.R. 502.704. This notice serves as BOE’s notification of its 

right to file a reply. 

 137 5 F.M.C.2d
Notice of Right to Respond at 1.

No materials or any further communication was received from C.V. Int’l. Therefore, on 

June 22, 2022, OALJ sent an email to C.V. Int’l, copying BOE and stating: “The Judge expected 

to receive a filing from C.V. Int’l Services on June 17, 2022. If additional time is needed, a 

motion requesting an extension must be filed. Any filings should be copied to this email 

address.” C.V. Int’l did not respond to the email from OALJ and no submissions or 

communications have been received from C.V. Int’l to date.

On July 7, 2022, BOE filed a reply brief and the Sumrall Verified Statement with 

attachments. BOE argues that a denial of C.V. Int’l’s OTI license based on C.V. Int’l’s character 

is warranted by the Shipping Act of 1984, Commission regulations, and established legal 

precedent. As previously noted, due to C.V. Int’l’s failure to submit any arguments or evidence 

in the proceeding, the evidence of record consists solely of the materials submitted by BOE. 

III. DISCUSSION

A. BOE’s Arguments

BOE submitted 24 exhibits and a verified statement by Michael P. Sumrall, an industry 

analyst at BCL, in support of its contention that denial of C.V. Int’l’s OTI license is warranted. 

BOE argues that denial of C.V. Int’l’s OTI license should be upheld because C.V. Int’l lacks the 

necessary character to provide OTI services in the United States as the evidence demonstrates 

that C.V. Int’l’s principal and proposed QI, Mr. Velazquez, lacks the necessary character to hold 

a license under section 40903 of the Shipping Act due to his failures to disclose his “no contest” 

plea to trafficking of cocaine and “other” criminal activity in C.V. Int’l’s OTI license application

and for repeatedly making misleading statements to BCL, as well as his failure to correct C.V. 

Int’l’s Form FMC-18 and to provide accurate and truthful information despite several 

opportunities that he was provided to do so. BOE Reply at 8. In addition, BOE asks that C.V. 

Int’l be directed to cease and desist any and all OTI activities. BOE Reply at 9.

B. Controlling Authority

An applicant seeking an OTI license must demonstrate that:

(a)(1) It possesses the necessary experience, that is, its qualifying individual has 

a minimum of three (3) years’ experience in ocean transportation intermediary 

activities in the United States, and the necessary character to render ocean 

transportation intermediary services... 

(a)(2) In addition to information provided by the applicant and its references, 

the Commission may consider all information relevant to determining whether 

an applicant has the necessary character to render ocean transportation 

intermediary services, including but not limited to, information regarding: 

Violations of any shipping laws, or statutes relating to the import, export, or 

transport of merchandise in international trade; operating as an OTI without a 

license or registration; state and federal felonies and misdemeanors... 

 138 5 F.M.C.2d
46 C.F.R. § 515.11. The Commission shall conduct an investigation of the applicant’s 

qualifications for a license. Such investigations may address:

(a) The accuracy of the information submitted in the application;

(b) The integrity and financial responsibility of the applicant;

(c) The character of the applicant and its qualifying individual; and

(d) The length and nature of the qualifying individual’s experience in handling

ocean transportation intermediary duties.

46 C.F.R. § 515.13.

The Shipping Act grants authority to deny an OTI’s license application under certain 

conditions.

If the Commission determines, as a result of its investigation, that the applicant:

(a) Does not possess the necessary experience or character to render intermediary

services;

(b) Has failed to respond to any lawful inquiry of the Commission; or

(c) Has made any materially false or misleading statement to the Commission in

connection with its application; then, a notice of intent to deny the application shall be

sent to the applicant stating the reason(s) why the Commission intends to deny the

application. The notice of intent to deny the application will provide, in detail, a

statement of the facts supporting denial. An applicant may request a hearing on the

proposed denial by submitting to the Secretary, Federal Maritime Commission,

Washington, DC 20573, within twenty (20) days of the date of the notice, a statement of

reasons why the application should not be denied. Such hearing shall be provided

pursuant to the procedures contained in § 515.17. Otherwise, the denial of the application

will become effective and the applicant shall be so notified.

46 U.S.C. § 515.15.

C. BOE Demonstrates that Denial of C.V. Int’l OTI License is Warranted

The materials and brief submitted by BOE support a finding that C.V. Int’l’s application 

for an OTI license should be denied, and no evidence of record contradicts BOE’s arguments or 

the materials BOE submitted in support of those arguments. The record shows that as part of a 

plea bargain, Mr. Velazquez pled no contest and was adjudicated and convicted of a felony on 

April 30, 2009. BOE 157, BOE 182. This felony conviction was not disclosed on C.V. Int’l’s

OTI license application even after BCL’s request for additional information. BOE 0102-0104.

 139 5 F.M.C.2d
Therefore, the record supports denying C.V. Int’l’s OTI license application because its 

QI, Mr. Velazquez, lacks the necessary character to provide OTI services in the United States

due to his failure to disclose a felony conviction and failure to provide accurate and truthful 

information in the OTI license application. Therefore, C.V. Int’l does not meet the requirements 

of 46 C.F.R. § 515.11. Accordingly, C.V. Int’l’s application for an OTI license is denied

pursuant to 46 C.F.R. § 515.15.

IV. ORDER

Upon consideration of the evidence and arguments submitted by BOE, and for the

reasons stated above, it is hereby 

ORDERED that C.V. Int’l’s application for an ocean transportation license be DENIED. 

It is

FURTHER ORDERED that C.V. Int’l cease and desist any and all ocean transportation 

intermediary activities.

Erin M. Wirth

Chief Administrative Law Judge

 140 5 F.M.C.2d
 

 

 

 

FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

ACHIM IMPORTING COMPANY INC., Complainant 

v. 

YANG MING MARINE TRANSPORT CORP., Respondent. 

DOCKET NO. 22-08 

Served: August 22, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

I A 1 NITIAL DECISION PPROVING SETTLEMENT AGREEMENT

On August 4, 2022, Complainant Achim Importing Company Inc. (“Achim”) and 

Respondent Yang Ming Marine Transport Corporation (“Yang Ming”) filed a joint motion 

(“Motion”) seeking approval of a settlement agreement, dismissal of the claims with prejudice, 

confidential treatment of the settlement agreement, and, an extension of the deadlines in the 

proceeding until a ruling on the motion. A copy of the confidential settlement agreement was 

attached to the motion. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

1 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

141 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties state: 

In this action, Achim and Yang Ming, both sophisticated corporate entities, 

arrived at the Settlement Agreement through extensive, arm’s length negotiations

that involved businesspeople and counsel on both sides, and make this motion to 

approve the Settlement Agreement jointly. The Settlement Agreement does not 

contravene any law or public policy, and is neither unjust nor discriminatory. It 

does not contemplate any adverse effects on any non-parties or the shipping 

public. Instead, the Settlement Agreement is intended to restore and reinforce the 

long-standing business relationship between the Parties. As such, the Settlement 

 142 5 F.M.C.2d
Agreement is fair and reasonable, and reflects the Parties’ desire to resolve their

issues without the need for costly and uncertain litigation. 

Motion at 3. 

Based on the representations in the motion and other documents filed in this matter, the 

parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions. The proceeding would require 

potentially expensive discovery and briefing. The parties have determined that the settlement 

reasonably resolves the issues raised in the complaint without the need for costly and uncertain 

litigation. Accordingly, the settlement agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The full text of the settlement agreement has been reviewed by the undersigned and is 

available to the Commission. Given the parties’ request for confidentiality, confidential

information included in the settlement agreement, and the Commission’s history of permitting 

agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files.

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between Complainant 

Achim Importing Company Inc. and Respondent Yang Ming Marine Transport Corporation be 

GRANTED. It is 

FURTHER ORDERED that the request to extend deadlines be DENIED AS MOOT. It 

FURTHER ORDERED that the request for confidential treatment be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 143 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

PRO TRANSPORT CHARLESTON, INC., Complainant

v.

ALLROUND MIDWEST FORWARDING, INC., Respondent. 

DOCKET NO. 22-15 

Served: August 22, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING DISMISSAL AGREEMENT

This complaint was initiated on June 13, 2022, when Complainant Pro Transport 

Charleston, Inc. (“Pro Transport”) filed a complaint alleging that Respondent Allround Midwest 

Forwarding, Inc. (“Allround”) violated the Shipping Act. On June 27, 2022, Pro Transport filed a 

Notice of Dismissal, requesting that the proceeding be dismissed pursuant to an agreement 

between the parties. Pro Transport was advised that a copy of the parties’ agreement must be 

filed. On August 8, 2022, the parties filed an Agreement in Support of Dismissal of Petitioner’s 

Complaint. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

144 5 F.M.C.2d
The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might 

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

This proceeding was filed based upon the alleged failure of Allround to maintain a surety 

bond. The existence of the bond has been established to Complainant’s satisfaction. The parties 

have agreed to dismiss the proceeding with each party bearing their own fees and costs. Based on 

the documents filed in this matter, the parties have established that the agreement does not 

appear to violate any law or policy or contain other defects which might make it unapprovable. 

The parties are both represented by counsel and have engaged in arms-length negotiations. The 

proceeding would require potentially expensive discovery and briefing. The parties have 

determined that the agreement reasonably resolves the issues raised in the complaint without the 

need for costly and uncertain litigation. Accordingly, the agreement requesting dismissal is 

approved.

 145 5 F.M.C.2d
Upon consideration of the notice of dismissal, the agreement in support of dismissal, and 

the record, and good cause having been stated, it is hereby: 

ORDERED that the request to approve the agreement between Pro Transport and 

Allround and dismiss the proceeding be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 146 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

FULTER LOGISTICS LLC, REVOCATION OF OCEAN 

TRANSPORTATION INTERMEDIARY LICENSE NO. 027912NF DOCKET NO. 22-09 

Served: August 26, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s July 26, 2022, Initial Decision Revoking Ocean Transportation 

License, has expired. Accordingly, the decision has become administratively final. 

William Cody

Secretary

147 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

C.V. INT’L SERVICES LLC, INTENT TO DENY AN OCEAN AN

TRANSPORTATION INTERMEDIARY Application DOCKET NO. 22-10 

Served: August 26, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s July 26, 2022, Initial Decision Denying Ocean Transportation 

Intermediary License, has expired. Accordingly, the decision has become administratively final. 

William Cody 

Secretary 

148 5 F.M.C.2d
 

 

 

FEDERAL MARITIME COMMISSION 

NNABUGWU CHINEDU ANDREW, AVERS

LOGISTICS LTD., AND CJ DELUZ NIGERIA

LTD. 

 Complainants,

 v. 

MARINE TRANSPORT LOGISTICS, INC., 

ALLA SOLOVYEVA, AND RAYA BAKHIREV

 Respondents. 

 Docket No. 20-12 

Served: September 22, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Max M. VEKICH, Commissioners; Louis E. 

SOLA, Carl W. BENTZEL, Commissioners, concurring in the 

result. 

Order Affirming Initial Decision 

On January 24, 2022, the Administrative Law Judge (“ALJ”) 

issued an Initial Decision (“I.D.”) finding that none of the allegedlyunlawful actions by Respondent Marine Transport Logistics 

(“MTL”) were unjust or unreasonable under 46 U.S.C. § 41102(c), 

and that Complainants had failed to pierce MTL’s corporate veil 

149 5 F.M.C.2d
 

 

 

such that either Respondents Alla Solovyeva or Raya Bakhirev, 

MTL employees, were properly named. Doc. 37. Thus, the ALJ 

dismissed the action. Id. 

On February 15, 2022, Complainants Nnabugwu Chinedu 

Andrew, Avers Logistics Ltd., and CJ Deluz Nigeria Ltd., filed a 

“Brief in Support of Their Exceptions to the Initial Decision.” Doc. 

38. Despite the document’s title, Complainants’ filing does not

constitute “exceptions” because it fails to comply with the

Commission’s particularity requirements set forth in 46 C.F.R. §

502.227(a). Under § 502.227(a), “any party may file a memorandum

excepting to any conclusions, findings, or statements contained in

[an initial] decision.” 46 C.F.R. § 502.227(a)(1). Such exceptions

“shall indicate with particularity alleged errors, [and] shall indicate

transcript page and exhibit number when referring to the record[.]”

Id. Complainants’ filing does no such thing. See generally Doc. 38

(failing to identify any findings of fact or issues of law with which

Complainants disagree). Indeed, Complainants’ only specific

citation to the I.D. concerns an obvious typographical error by the

ALJ. See id. at 5 (citing Doc. 37 at 15 and spuriously maintaining

that because the ALJ wrote “Respondents” where she obviously

meant “Complainants,” the ALJ is “confused” as to “who are the

complainants and who are the respondents in this matter”). To the

extent that Complainants state anything specific at all, they

primarily (and improperly) rehash discovery disputes that have been

thrice raised before—and ruled on by—the ALJ. Compare Doc. 38

at 2-8 with Complainants’ Motions to Compel and Reconsider,

Docs., 18, 24, 28 and Orders on Complainants’ Motions, Docs. 21,

26, 29.

Indeed, Complainants acknowledge that their filing is 

deficient. See Doc. 38 at 9 (“The purpose of these Exceptions are 

[sic] to make a record of key issues raised by the [I.D.] and to request 

that the Commission now review the decision.”). Complainants do 

not, however, ask that the Commission waive the particularity 

requirements in § 502.227(a). Instead, without citing any authority, 

 150 5 F.M.C.2d
 

 

 

 

 

Complainants maintain that “[i]t is fundamentally unfair for 

complainants, who are of limited means and resources (as well as 

the undersigned [Complainants’ counsel], a solo practitioner whose 

resources and time are also limited) to be expected to now sift 

through all reversible errors in the Initial Decision[.]” Id. 

Complainants are incorrect. It is well-established that counsel’s 

busy schedule and being a solo practitioner are not good grounds for 

failing to comply with rules and regulations.

1 See, e.g., Chebro v. 

Great Dane, LLC, 2020 WL 4499970, at *3 (D. Conn. Aug. 5, 2020) 

(citing cases); see also Tremper v. Air-Shields Inc., 2001 WL 

1000686, at *2 (S.D. Ind. Aug. 27, 2001) (noting that the Seventh 

Circuit has characterized as the “opposite of good cause” for having 

violated relevant rules and orders, “excuses” such as “[p]oor time 

management and attorney neglect-even excusable neglect”) 

(internal citation omitted). 

Though not required to engage in the type of review that 

Complainants themselves are required—but chose not—to do, the 

Commission has considered the arguments made in the 

Complainant’s filing. See 46 C.F.R. § 502.227(a); Complainants’ 

Exceptions at 9 (inappropriately requesting that the Commission 

“take into consideration all arguments and evidence previously set 

forth in Complainants’ [Summary Decision] Brief and Proposed 

Findings of Fact and Appendix,” which were, of course, before the 

ALJ). The Commission finds these arguments lacking. 

Specifically, Complainants’ discovery-related assertions 

appear to be directly refuted by Complainants’ own Proposed 

Findings of Fact and the record that Complainants themselves 

produced. Compare Complainants’ Exceptions, Doc. 38 at 7 

1 Further, Complainants did not request an extension of time in which to file their 

exceptions—a request that the Commission often grants. 

151 5 F.M.C.2d
 

 

 

 

 

 

 

(maintaining that Complainants “still have not received” invoices, 

bills of lading, dock receipts, and other paperwork for four vehicles 

at issue: those with Vehicle Identification Numbers (“VINs”) ending 

in 6693, 5968, 0283, and 2288) with Complainants’ Proposed 

Findings of Fact, Doc. 31 at PDF 414, 501, 517, 528 (reflecting 

various invoices for the vehicle with the VIN ending in 6693); id. ¶ 

140 (referencing the “MTL Invoice” for the vehicle with the VIN 

ending in 5968); id. ¶¶ 136-137 (referencing the “MTL Invoice” and 

the “MTL Dock Receipt” for the vehicle with the VIN ending in 

0283); id. ¶¶ 141-44 (referencing the “MTL Invoice” and the “MTL 

Dock Receipt” for the vehicle with the VIN ending in 2288). 

Complainants do not explain or even state how the ALJ reached an 

incorrect conclusion as to any of the I.D.’s relevant, corresponding 

findings of fact; instead, Complainants maintain that the ALJ 

reached a decision “prior to the development of a full and complete 

record[.]” Doc. 38 at 4. Here, too, Complainants fail to explain to 

themselves, choosing instead to “refer[]” the Commission to their 

“various motions” before the ALJ “which, for the purposes of 

brevity will not be regurgitated” in their Exceptions. Id. at 4. Thus, 

the Commission agrees with the ALJ that “the extensive record was 

sufficient to rule on the material issues in this proceeding.” I.D. at 

18.2

Furthermore, the Commission reiterates the Administrative 

Law Judge’s caution to Counsel for Complainants regarding the 

naming of individuals instead of, or in addition to corporations, 

without sufficient basis to do so. As the Judge indicated in the I.D., 

2 Although the I.D. includes analysis of all the elements in the Commission’s 

interpretive rule on § 41102(c), initial decisions “should address only those issues 

necessary to a resolution of the material issues presented on the record.” 46 C.F.R. 

§ 502.223. Accordingly, once the ALJ determined that Respondents’ conduct was

not unreasonable, further analysis was not necessary and the Commission did not

review and does not adopt the ALJ’s other findings. See I.D. at 12-18.

 152 5 F.M.C.2d
 

 

future instances of this conduct may result in a finding that the claim 

against the named individual was frivolous and may warrant 

sanctions. Id. at 13. Moreover, Counsel is cautioned about the tone 

and allegations made in the brief supporting exceptions. The 

Commission reminds Counsel that it expects practitioners to treat 

the ALJ (and the Commission) with respect and to otherwise act in 

accordance with the applicable rules of professional conduct. See 46 

C.F.R. § 502.26.

For the reasons set forth above, the Commission AFFIRMS 

the Initial Decision. THEREFORE IT IS ORDERED that 

Complainant’s Complaint be DISMISSED WITH PREJUDICE. 

IT IS FURTHER ORDERED that any other pending 

motions or requests be DISMISSED AS MOOT. 

IT IS FURTHER ORDERED that this proceeding be 

DISCONTINUED. 

By the Commission. 

William Cody 

Secretary 

153 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

ACHIM IMPORTING COMPANY INC., Complainant

v. 

YANG MING MARINE TRANSPORT CORPORATION, 

Respondents. 

DOCKET NO. 22-08 

Served: September 23, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s August 22, 2022, Initial Decision has expired. Accordingly, the 

decision has become administratively final.

William Cody

Secretary

154 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

PRO TRANSPORT CHARLESON, INC., Complainant

v. 

ALLROUND MIDWEST FORWARDING, INC., Respondents. 

DOCKET NO. 22-15 

Served: September 23, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s June 16, 2022, Initial Decision has expired. Accordingly, the 

decision has become administratively final.

William Cody

Secretary

155 5 F.M.C.2d
 

 

 

 

FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

ORANGE AVENUE EXPRESS, INC., Complainant 

v. 

HAPAG LLOYD AG, Respondent. 

DOCKET NO. 21-10 

Served: October 3, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

I A 1 NITIAL DECISION PPROVING SETTLEMENT AGREEMENT

On September 15, 2022, Complainant Orange Avenue Express, Inc. and Respondent 

Hapag Lloyd AG (“Hapag Lloyd”) filed a joint motion for approval of confidential settlement 

agreement (“Motion”) and a copy of the confidential settlement agreement. The motion seeks 

approval of the settlement agreement, voluntary dismissal of the complaint with prejudice, and 

confidential treatment of the settlement agreement. Motion at 4. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

1 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

156 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties state that they “established a procedural schedule and engaged in discovery”

and have “engaged in settlement discussions at various points in time throughout the course of 

the proceeding, ultimately concluding the Confidential Settlement Agreement accompanying this 

memorandum.” Motion at 3. The parties further state: 

In this action, the parties, both sophisticated corporate entities, arrived at the 

Confidential Settlement Agreement through arm's length negotiations and support 

this motion and the relief that it seeks. The Confidential Settlement Agreement 

does not contravene any law or public policy, and is neither unjust nor 

discriminatory. It does not contemplate any adverse effects on any third parties or 

the shipping public. Instead, the Confidential Settlement Agreement is a fair and 

reasonable resolution of the dispute between the parties and reflects their desire to 

resolve their issues without the need for costly and uncertain litigation. For these 

reasons, the parties respectfully request that the Confidential Settlement 

157 5 F.M.C.2d
 

 

Agreement be approved and, on that basis, the complaint in this matter be 

dismissed with prejudice. 

Motion at 6. 

Based on the representations in the joint motion and other documents filed in this matter, 

the parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions. The proceeding would require 

potentially expensive briefing. The parties have determined that the settlement reasonably 

resolves the issues raised in the complaint without the need for costly and uncertain litigation. 

Accordingly, the settlement agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The parties properly redacted confidential bank account information from the confidential 

settlement agreement. The confidential settlement agreement has been reviewed by the 

undersigned and is available to the Commission. Given the parties’ request for confidentiality,

confidential information included in the settlement agreement, and the Commission’s history of

permitting agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files.

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement Complainant Orange 

Avenue Express, Inc. and Respondent Hapag Lloyd AG be GRANTED. It is 

FURTHER ORDERED that the request for confidential treatment be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

158 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

OJ COMMERCE, LLC, Complainant 

v. 

HAMBURG SÜDAMERIKANISCHE DAMPFSCHIFFFAHRTSGESELLSCHAFT A/S & CO KG AND HAMBURG SUD NORTH

AMERICA, INC., Respondents. 

DOCKET NO. 21-11 

Served: October 6, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s August 31, 2022 decision to grant Respondents’ motion to dismiss 

Complainant’s 46 U.S.C. §§ 41102(b)(2), 41104(a)(5), and 41104(a)(9) claims has expired. 

Accordingly, the corresponding portion of the “Order on Respondents’ Motion to Partially 

Dismiss and for a Protective Order and Complainant’s Motion for Expedited Relief” has become 

administratively final. 

William Cody 

Secretary 

159 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

INTERNATIONAL EXPRESS TRUCKING, INC., Complainant

v.

ZIM INTEGRATED SHIPPING SERVICES LTD., Respondent. 

DOCKET NO. 22-13 

Served: October 20, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING SETTLEMENT AGREEMENT

On October 5, 2022, Complainant International Express Trucking, Inc. (“IXT”) and 

Respondent Zim Integrated Shipping Services Ltd. (“Zim”) filed a joint motion seeking approval 

of a settlement, confidential treatment of the settlement agreement, and voluntary dismissal of 

the complaint (“Motion”) and a copy of the confidential settlement agreement. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

160 5 F.M.C.2d
contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might 

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties state that the “claims at issue relate to allegations that the Respondent 

engaged in unjust and unreasonable practices in violation of the Shipping Act. The Respondent 

has denied all such allegations.” Motion at 2. The parties further state:

Here, the Parties’ settlement reflects a fair and considered judgment of the relative 

strengths of their respective positions, the desire to avoid continuing litigation 

costs and to avoid the risks inherent in litigation. The settlement is the product of 

arms-length negotiations, in which counsel for both parties participated, and is free 

of fraud, duress, or undue influence. The Parties also submit that the settlement is 

free of mistake or other defects which might make it unapprovable. 

Further, the settlement does not contravene law or public policy. It is not an unjust 

or discriminatory device, has no adverse effect on any third parties or the market 

for transportation services, and does not run afoul of any provision of the Shipping 

 161 5 F.M.C.2d
Act. Rather, it constitutes a prudent decision to settle costly litigation in which the 

ultimate outcome was uncertain. In sum, because the settlement is fair, reasonable 

and adequate, and is the product of prudent and considered judgment on the part of 

the Parties, it should be approved. 

Motion at 2-3. 

Based on the representations in the joint motion and other documents filed in this matter, 

the parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions. The proceeding would require 

potentially expensive briefing. The parties have determined that the settlement reasonably 

resolves the issues raised in the complaint without the need for costly and uncertain litigation. 

Accordingly, the settlement agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The confidential settlement agreement has been reviewed by the undersigned and is 

available to the Commission. Given the parties’ request for confidentiality, confidential 

information included in the settlement agreement, and the Commission’s history of permitting 

agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files.

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between Complainant 

IXT and Respondent Zim be GRANTED. It is 

FURTHER ORDERED that the request for confidential treatment be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 162 5 F.M.C.2d
 

 

 

 

FEDERAL MARITIME COMMISSION 

ONE NETWORK EXPRESS PTE. LTD. – 

POSSIBLE VIOLATIONS OF 46 U.S.C.

§ 41102(c)

 Docket No. 21-17 

 

Served: October 27, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Louis E. SOLA, Carl W. BENTZEL, Max M. 

VEKICH, Commissioners. 

Order Reversing the Initial Decision and Remanding 

On June 28, 2022, the Administrative Law Judge (“ALJ”) in 

Docket No. 21-17, One Network Express Pte. Ltd.1 – Possible 

Violations of 46 U.S.C. § 41102(c), issued an Initial Decision 

(“I.D.”) approving a confidential settlement between Respondent 

and the Bureau of Enforcement (“BOE”), and dismissing the 

proceeding with prejudice. I.D., Doc. 42. On July 15, 2022, the 

Commission requested review of the I.D. The Secretary’s 

corresponding Notice of Commission Determination to Review 

rendered the I.D. inoperative and settlement agreement 

1 At the Bureau of Enforcement’s request, former Respondent Ocean Network 

Express (North America) was dismissed from this action in May 2022. See Order 

on Mots. to Compel and Dismiss, Doc. 36. 

163 5 F.M.C.2d
 

 

 

unenforceable. Notice, Doc. 43; see 46 C.F.R. § 502.227. 

Having reviewed the I.D., the settlement agreement, and all 

other relevant materials, the Commission now reverses the I.D. and 

remands the action to the ALJ for further proceedings consistent 

with this Order. 

I. BACKGROUND

On December 30, 2021, the Commission instituted this 

adjudicatory proceeding to determine whether the apparent practice 

of ocean common carrier Ocean Network Express Pte. Ltd. (“ONE”) 

of attempting to collect charges from persons who did not agree to 

be bound under the relevant bills of lading, is unreasonable under 46 

U.S.C. § 41102(c). Order of Investigation and Hearing, Doc. 1. 

A. Private Party Litigation Involving ONE

In May 2020, ONE filed suit against Greatway Logistics 

Group, LLC (“Greatway”), a licensed non-vessel operating common 

carrier (“NVOCC”), in federal district court, demanding payment 

for charges accrued on the shipments covered under two bills of 

lading relating to shipments of cargo from Brazil to the Port of 

Houston. Id. ¶¶ 11-12. 2 One of the bills of lading listed Greatway 

as (only) the Notify Party. Id. ¶ 14. The other did not identify 

Greatway at all. Id. ¶ 15. 

According to ONE, the bills of lading “govern the relations 

between [] Carrier[s] and [] Merchant[s].” Ocean Network Express 

(North America) Inc. v. Pacific Lumber Resources, Inc., Compl. ¶¶ 

18-19, No. 4:20-cv-01734 (filed May 18, 2020). Also according to

ONE, per the bills of lading, “Merchants” are “liable to the Carrier

for the payment of all Freight and/or expenses[;]” and “Merchant,”

as defined on the standard contract itself, “includes the Shipper,

2 The case named five other entities also alleged to be “merchants” responsible 

for the charges who were all eventually voluntarily dismissed from the case. 

 164 5 F.M.C.2d
 

 

 

 

 

Consignee, owner, Person owning or entitled to the Person owning 

or entitled to possession of the Goods or of this Bill, Receiver, 

Holder, and anyone acting on behalf of any such person, including 

but not limited to agents, servants, independent contractors, [] 

NVOCCs[], and freight forwarders.” Id. (quoting ONE’s bills of 

lading). Greatway, in response, asserted that it had acted only to 

arrange for customs clearance; it did not agree to be bound by the 

bills of lading, have any interest in the cargo, or act as an agent for 

any relevant party. See Doc. 1 ¶¶ 16-19. In short, Greatway 

maintained that it was not liable for the charges. See id. 

On May 25, 2021, ONE sought to dismiss its claims against 

Greatway voluntarily stating that it had “settled with other 

defendants regarding the underlying occurrence and no longer 

desire[d] to pursue further litigation related to these bills of lading,” 

and moved to dismiss a counterclaim filed by Greatway. Ocean 

Network Express, No. 4:20-cv-01734, ECF No. 66 ¶ 10. The district 

court granted ONE’s motion, thereby terminating the action. 

Also on May 25, 2021, Greatway filed a complaint with the 

Commission alleging that ONE Pte.’s attempt to collect demurrage, 

storage, and freight charges violated 46 U.S.C. § 41102(c). FMC 

Dkt. No. 21-04. BOE subsequently intervened in the Commission 

case. In November 2021, ONE Pte. and Greatway moved for 

approval of a settlement agreement and dismissal of Greatway’s 

complaint. Although BOE took no position on the commercial terms 

of the settlement agreement, BOE made clear that the commercial 

resolution of ONE Pte.’s and Greatway’s dispute did not address 

BOE’s concerns about application of the “Merchant” clause. BOE 

Resp. to Jt. Mot. at 3, Dkt. No. 21-04 (Nov. 12, 2021). The ALJ 

approved the settlement agreement and dismissed the complaint on 

November 30, 2021, and the Commission issued a notice not to 

review the ALJ decision on January 5, 2022. 

 165 5 F.M.C.2d
 

 

 

B. FMC Notice of Inquiry

In October 2020, the Commission issued a Notice of Inquiry 

(“NOI”) regarding vessel-operating common carriers (“VOCCs”) 

defining “Merchant” in their bills of lading to apply to persons and 

entities with whom the carriers did not contract. See FMC Dkt. No. 

20-16. This included those who might not be in privity of contract,

or should otherwise be deemed to have consented to be bound by

the contract of carriage. The Order of Investigation in this case

referenced the Notice of Inquiry as part of the determination to

initiate this enforcement action.

C. Procedural History of Docket No. 21-17

On December 30, 2021, the Commission ordered the 

initiation of this action. Order of Investigation and Hearing, Doc. 1. 

The parties here proceeded to discovery, and, after several 

discovery disputes, jointly moved for approval—and confidential 

treatment—of their settlement agreement, and for the action to be 

dismissed with prejudice. See Docs. 21-35; Joint Mot., Doc. 41. 

On June 28, 2022, the ALJ approved the confidential 

settlement in her I.D., which the Commission now reverses for the 

following reasons. 

 

 

II. DISCUSSION

A. Standard of Review

The Commission reviews an ALJ’s decision de novo. 46

F.R. § 502.227(a)(6) (when the Commission reviews an initial

decision, it “will have all the powers which it would have in making

the initial decision”). 

The Commission has a longstanding policy of encouraging 

settlements and applies presumptions favoring a finding that the 

 166 5 F.M.C.2d
 

 

 

 

terms are fair, correct and valid. World Chance Logistics (Hong 

Kong), Ltd. and Yu, Chi Shing, a.k.a. Johnny Yu –Possible 

Violations of Section 10 of the Shipping Act of 1984, Dkt. No. 09-

07, 2010 FMC LEXIS 27, at *5 (FMC 2010). However, that does 

not mean that the Commission reflexively approves any settlement 

proposed by the parties. See, e.g., Foreign Tire Sales Inc. v. 

Evergreen Shipping Agency (America) Corp., Dkt. No. 22-05, 2022 

WL 1485894 (ALJ May 3, 2022) (admin. final. June 2, 2022). 

Before granting its approval, the Commission reviews the terms to 

ensure they are consistent with § 502.72(a)(3) and that the terms are 

fair, reasonable, and adequate. World Chance, 2010 FMC LEXIS 

27, at *5. 

There are additional procedural requirements, described in 

Subpart W of the Commission’s Rules of Practice and Procedure, 

for settlement agreements in formal, docketed proceedings instituted 

by order of the Commission. See 46 C.F.R. §§ 502.601-502.605. 

B. The Settlement Agreement

There are several issues with the settlement agreement and

the parties’ arguments in support thereof. 

First, although the parties state that they are moving under 

Rule 72, 46 C.F.R. § 502.72, which is in Subpart E of the 

Commission’s Rules of Practice and Procedure and governs 

dismissals in formal actions, their motion is void of any reference to 

the rules in Subpart W, which govern, among other things, the 

assessment of civil penalties and settlements in enforcement actions 

seeking civil penalties, id. §§ 502.601-502.605. See Doc. 41. Under 

§ 502.603(b), “[i]n determining the amount of any penalties

assessed,” the Commission is required to: “take into account the

nature, circumstances, extent and gravity of the violation committed

and the policies for deterrence and future compliance with the

Commission’s rules and regulations and the applicable statutes. The

Commission shall also consider the respondent’s degree of

culpability, history of prior offenses, ability to pay and such other

 167 5 F.M.C.2d
 

 

 

 

 

 

 

 

matters as justice requires.”3

The joint motion of the parties does not address these factors 

which renders the Commission unable to definitively determine 

whether the settlement agreement conforms with the requirements 

in Subpart W. Based on the information the Commission does have 

about these factors from the record, it does not appear that the civil 

penalty and other terms proposed in the settlement agreement are 

sufficient to resolve the serious allegations in this case. 

Moreover, enforcement action settlements are not to be kept 

confidential. 46 C.F.R. § 502.603(a) (“The full text of any 

settlement [assessing a civil penalty] must be included in the final 

order of the Commission.”). In the I.D., the ALJ acknowledges that 

the parties did not “address this requirement.” Doc. 42 at 4. The ALJ 

nevertheless granted the parties’ request for confidentiality because 

this “expedited proceeding [] has been heavily litigated” and the 

“confidentiality provision is central to the agreement to settle this 

proceeding.” Id. 

The Commission does not agree that these are sufficient 

reasons to waive the no-confidentiality requirement, especially in 

the absence of any request to do so. To be sure, the Commission 

regularly agrees to keep confidential various settlements in private 

party actions. As § 502.603(b) makes clear, however, in an 

enforcement action, the Commission is interested in deterring 

unlawful conduct and otherwise encouraging compliance with the 

statutes and regulations that it administers. Confidential settlements 

do not further these important goals. 

Because the Commission finds that the terms of the 

agreement violate the Commission’s Rules of Practice and 

Procedure and are objectionable from a policy perspective, it hereby 

reverses the I.D.’s approval of the agreement. See id. § 502.72(a)(3) 

3 These factors have since been codified in 46 U.S.C. § 41109 by the passage of 

the Ocean Shipping Reform Act of 2022, Pub. L. No. 117-146, 136 Stat. 1272. 

 168 5 F.M.C.2d
 

 

 

 

(settlements that appear to violate any law or policy will not be 

approved). 

III. CONCLUSION

For the reasons set forth above, the Initial Decision 

Approving Settlement Agreement is REVERSED. 

THEREFORE, IT IS ORDERED that this action be 

REMANDED to the ALJ for further proceedings. 

It is further ORDERED that the ALJ promptly issue a 

scheduling order setting dates for the parties to submit briefs, 

findings of fact, and appendices. 

It is further ORDERED that the ALJ issue an Initial 

Decision on the merits of the case by January 26, 2023. 

It is further ORDERED that the Commission’s deadline for 

a final decision in this case is extended to April 26, 2023. 

By the Commission. 

William Cody 

Secretary 

 169 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

ORANGE AVENUE EXPRESS, INC., Complainant

v.

Hapag Lloyd AG, Respondent. 

DOCKET NO. 21-10 

Served: November 3, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s October 3, 2022, Initial Decision Approving Settlement Agreement 

has expired. Accordingly, the decision has become administratively final. 

William Cody

Secretary

170 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

Office of Administrative Law Judges 

ACME FREIGHT SERVICES CORP., Complainant

v. DOCKET NO. 22-07 

T T I OTAL ERMINALS NTERNATIONAL, Respondent. 

Served: November 9, 2022 

ORDER OF: Linda S. Harris CROVELLA, Administrative Law Judge. 

INITIAL DECISION APPROVING SETTLEMENT AGREEMENT1

On October 21, 2022, Complainant Acme Freight Services Corp. (“Acme”), and 

Respondent Total Terminals International (“Total Terminals”), filed a joint motion seeking 

approval of a confidential settlement agreement and dismissal with prejudice of the complaint 

(“Motion”), with a copy of the confidential settlement agreement.

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5. U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.” 

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.” 

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

1 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

171 5 F.M.C.2d
the law to uphold and enforce such contracts if they are fairly made and are not in 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy.

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.” 

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might 

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The settlement agreement includes a non-party, Mediterranean Shipping Company 

(“MSC”), to whom Respondent states that Acme paid the disputed demurrage. The parties state 

that “the settlement is the product of arms-length negotiations between sophisticated entities,” 

and “reflects a fair and considered judgment of the relative strengths of their respective positions, 

the desire to avoid continuing litigation costs and to avoid risks inherent in litigation.” Motion at 

2-3. The parties state:

Further, the settlement does not contravene law of public policy. It is not an unjust 

or discriminatory device, has no adverse impact on any third parties or the market 

for transportation services, and does not run afoul of any provision of the 

Shipping Act. Rather, it constitutes a prudent decision by the Parties and MSC. In 

sum, the settlement should be approved because it is fair, reasonable and 

 172 5 F.M.C.2d
adequate, and is the product of prudent and considered judgment on the part of the 

Parties and MSC.

Motion at 3. 

Based on the representations in the joint motion and other documents filed in this matter, 

the parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions. The proceeding would require 

potentially expensive discovery and briefing. The parties have determined that the settlement 

reasonably resolves the issues raised in the complaint without the need for costly and uncertain 

litigation. Accordingly, the settlement agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The confidential settlement agreement has been reviewed by the undersigned and is 

available to the Commission. Given the parties’ request for confidentiality, confidential 

information included in the settlement agreement, and the Commission’s history of permitting 

agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files.

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby:

ORDERED that the motion to approve the settlement agreement between Complainant 

Acme and Respondent Total Terminals be GRANTED. It is 

FURTHER ORDERED that the request for confidential treatment be GRANTED. It is

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Linda S. Harris Crovella 

Administrative Law Judge

173 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

ONE BANANA NORTH AMERICA CORP., Complainant

v.

HAPAG-LLOYD AG AND HAPAG-LLOYD (AMERICA) LLC,

Respondents. 

DOCKET NO. 22-03 

Served: November 16, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING SETTLEMENT AGREEMENT

On October 31, 2022, Complainant One Banana North America Corp., (“One Banana”) 

and Respondent Hapag-Lloyd AG and Hapag-Lloyd (America) LLC (collectively “HapagLloyd”) filed a joint motion seeking approval of a confidential settlement agreement (“Motion”) 

and a copy of the confidential settlement agreement. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3).

The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

174 5 F.M.C.2d
contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate 

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might 

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties state that they “have engaged in settlement discussions at various points in 

time throughout the course of the proceeding, ultimately concluding the Confidential Settlement 

Agreement accompanying this memorandum.” Motion at 1-2. The parties further state: 

In this action, the parties, both sophisticated corporate entities, arrived at the 

Confidential Settlement Agreement through arm’s length negotiations and support 

this motion and the relief that it seeks. The Confidential Settlement Agreement 

does not contravene any law or public policy, and is neither unjust nor 

discriminatory. It does not contemplate any adverse effects on any third parties or 

the shipping public. Instead, the Confidential Settlement Agreement is a fair and 

reasonable resolution of the disputes between the parties and reflects their desire to 

resolve their issues without the need for costly and uncertain litigation. For these 

reasons, the parties respectfully request that the Confidential Settlement 

 175 5 F.M.C.2d
Agreement be approved and, on that basis, the complaint in this matter be 

dismissed with prejudice. 

Motion at 3. 

Based on the representations in the joint motion and other documents filed in this matter, 

the parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The parties are represented by 

counsel and have engaged in arms-length settlement discussions after conducting extensive 

discovery. The proceeding would require potentially expensive additional discovery and briefing. 

The parties have determined that the settlement reasonably resolves the issues raised in the 

complaint without the need for costly and uncertain litigation. Accordingly, the settlement 

agreement is approved. 

The parties request that the settlement agreement be kept confidential. Pursuant to 

Commission Rule 5(b), parties may request confidentiality. 46 C.F.R. § 502.5(b); see also 46 

C.F.R. § 502.141(j). “If parties wish to keep the terms of their settlement agreements

confidential, the Commission, as well as the courts, have honored such requests.” Al Kogan v.

World Express Shipping, Transportation and Forwarding Services, Inc., 29 S.R.R. 68, 70 n.7

(ALJ 2000) (citations omitted); Marine Dynamics v. RTM Line, Ltd., 27 S.R.R. 503, 504 (ALJ

1996); Int’l Assoc. of NVOCCs v. Atlantic Container Line, 25 S.R.R. 1607, 1609 (ALJ 1991).

The confidential settlement agreement has been reviewed by the undersigned and is 

available to the Commission. Given the parties’ request for confidentiality, confidential 

information included in the settlement agreement, and the Commission’s history of permitting 

agreements settling private complaints to remain confidential, the parties’ request for 

confidentiality for the settlement agreement is granted. The settlement agreement will be 

maintained in the Secretary’s confidential files.

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between Complainant 

One Banana and Respondents Hapag-Lloyd be GRANTED. It is 

FURTHER ORDERED that the request for confidential treatment be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 176 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

AENEAS EXPORTING LLC, Complainant

v.

HONEYBEE INTERNATIONAL INC., AND ALL AMERICA 

SHIPPING, Respondent. 

DOCKET NO. 22-11 

Served: November 16, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING SETTLEMENT AGREEMENT

On October 31, 2022, Complainant Aeneas Exporting LLC (“Aeneas”), in pro per, and 

Respondents, Honeybee International Forwarding, dba Honeybee International, Inc. 

(“Honeybee”) and All California Auto Parts Inc., erroneously sued herein as All America 

Shipping (“All America”), filed a joint motion seeking approval of a settlement agreement and 

dismissal with prejudice of the complaint (“Motion”) with a copy of the settlement agreement. 

Complainant is unrepresented, however, he has actively engaged in this proceeding, 

including requesting a number of subpoenas. Initial requests for subpoenas and appointment of 

an expert were denied, but a subsequent subpoena request with a more detailed justification was 

granted. In addition, the parties agreed in email correspondence with the Commission’s Office of 

Administrative Law Judges that the Complainant’s motion to compel documents from 

Respondents, labeled as a motion to subpoena non-party, has been resolved between the parties. 

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.” 

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

177 5 F.M.C.2d
The Commission has a strong and consistent policy of “encourag[ing] settlements and 

engag[ing] in every presumption which favors a finding that they are fair, correct, and valid.”

Inlet Fish Producers, Inc. v. Sea-Land Serv., Inc., 29 S.R.R. 975, 978 (ALJ 2002) (quoting Old 

Ben Coal Co. v. Sea-Land Serv., Inc., 18 S.R.R. 1085, 1091 (ALJ 1978) (Old Ben Coal)). See 

also Ellenville Handle Works, Inc. v. Far Eastern Shipping Co., 20 S.R.R. 761, 762 (ALJ 1981). 

The law favors the resolution of controversies and uncertainties through 

compromise and settlement rather than through litigation, and it is the policy of 

the law to uphold and enforce such contracts if they are fairly made and are not in 

contravention of some law or public policy. . . . The courts have considered it 

their duty to encourage rather than to discourage parties in resorting to 

compromise as a mode of adjusting conflicting claims. . . . The desire to uphold 

compromises and settlements is based upon various advantages which they have 

over litigation. The resolution of controversies by means of compromise and 

settlement is generally faster and less expensive than litigation; it results in a 

saving of time for the parties, the lawyers, and the courts, and it is thus 

advantageous to judicial administration, and, in turn, to government as a whole. 

Moreover, the use of compromise and settlement is conducive to amicable and 

peaceful relations between the parties to a controversy. 

Old Ben Coal, 18 S.R.R. at 1092 (quoting 15A AM. JUR. 2D Compromise and Settlement § 3 

(1976)). 

“While following these general principles, the Commission does not merely rubber stamp 

any proffered settlement, no matter how anxious the parties may be to terminate their litigation.”

Old Ben Coal, 18 S.R.R. at 1092. However, if “a proffered settlement does not appear to violate

any law or policy and is free of fraud, duress, undue influence, mistake or other defects which 

might make it unapprovable despite the strong policy of the law encouraging approval of 

settlements, the settlement will probably pass muster and receive approval.” Old Ben Coal, 18 

S.R.R. at 1093. “[I]f it is the considered judgment of the parties that whatever benefits might

result from vindication of their positions would be outweighed by the costs of continued 

litigation and if the settlement otherwise complies with law the Commission authorizes the 

settlement.” Delhi Petroleum Pty. Ltd. v. U.S. Atlantic & Gulf/Australia – New Zealand Conf. 

and Columbus Line, Inc., 24 S.R.R. 1129, 1134 (ALJ 1988) (citations omitted). 

“Reaching a settlement allows the parties to settle their differences, without an admission 

of a violation of law by the respondent, when both the complainant and respondent have decided 

that it would be much cheaper to settle on such terms than to seek to prevail after expensive 

litigation.” APM Terminals North America, Inc. v. Port Authority of New York and New Jersey, 

31 S.R.R. 623, 626 (FMC 2009) (citing Puerto Rico Freight Sys. Inc. v. PR Logistics Corp., 30 

S.R.R. 310, 311 (ALJ 2004)). 

The parties reached their settlement with the assistance of an FMC mediator. Motion at 2. 

The parties further state:

 178 5 F.M.C.2d
In the FMC Proceeding, Aeneas believes that it would prevail on the allegations 

set forth in its Complaint. Honeybee and All America believe that they would 

defeat the allegations set forth in the Complaint. 

Notwithstanding these beliefs, the Parties recognize that when the claimed 

damages are compared with the expected remaining costs of this litigation and the 

inherent uncertainties of litigation, with the assistance of the FMC mediator, the 

Parties agreed to conduct settlement discussion to see whether the matter could be 

resolved. The Settlement Agreement that accompanies this Motion is the result of 

the mediator directed discussions among the Parties and is submitted to the 

Presiding Officer for approval. 

Motion at 2. 

The parties further assert that “the proposed settlement here is to be evaluated against 

litigative probabilities, litigative and administrative costs, and such other matters as justice may 

require,” arguing: 

As discussed above, there are bona fide disagreements between Claimant and the 

Respondents as to certain facts and legal issues. Although each side is confident it 

would prevail, the outcome of any litigation is uncertain. In view of the litigative 

probabilities and the probability that this proceeding will continue to be time 

consuming, and costly, the proposed Settlement Agreement, which dismisses all 

FMC claims with prejudice, would save all Parties time and expense. 

Motion at 3-4. 

Based on the representations in the joint motion and other documents filed in this matter, 

the parties have established that the settlement agreement does not appear to violate any law or 

policy or contain other defects which might make it unapprovable. The agreement was 

negotiated with the assistance of an FMC mediator and the parties have engaged in arms-length 

settlement discussions. The proceeding would require potentially expensive discovery and 

briefing. The parties have determined that the settlement reasonably resolves the issues raised in 

the complaint without the need for costly and uncertain litigation. Accordingly, the settlement 

agreement is approved. 

Upon consideration of the motion, the settlement agreement, and the record, and good 

cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between Complainant 

Aeneas and Respondents Honeybee and All America be GRANTED. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

 179 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

INTERNATIONAL EXPRESS TRUCKING, INC., Complainant

v. 

ZIM INTEGRATED SHIPPING LTD., Respondent. 

DOCKET NO. 22-13 

Served: November 22, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s October 20, 2022, Initial Decision has expired. Accordingly, the 

decision has become administratively final. 

William Cody 

Secretary

180 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

ACME FREIGHT SERVICES CORP., Complainant 

v. 

TOTAL TERMINALS INTERNATIONAL, Respondent 

DOCKET NO. 22-07 

Served: December 12, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review the 

Administrative Law Judge’s October 21, 2022, Initial Decision has expired. Accordingly, the 

decision has become administratively final. 

William Cody 

Secretary 

181 5 F.M.C.2d
FEDERAL MARITIME COMMISSION 

Office of Administrative Law Judges 

OCEAN NETWORK EXPRESS (NORTH AMERICA), INC. AND 

OCEAN NETWORK EXPRESS, PTE., LTD. - POSSIBLE 

VIOLATIONS OF 46 U.S.C. § 41102(C) 

DOCKET NO. 21-17

Served: December 13, 2022 

ORDER OF: Erin M. WIRTH, Chief Administrative Law Judge. 

INITIAL DECISION A

1

PPROVING REMAND SETTLEMENT AGREEMENT

I. Background and History

On December 2, 2022, the Bureau of Enforcement, Investigations, and Compliance 

(“BEIC”) and Respondent Ocean Network Express, Pte., Ltd. (“ONE”) filed a joint 

memorandum in support of a proposed revised settlement (“Motion”), together with a copy of 

the proposed settlement agreement. Respondent Ocean Network Express (North America), Inc. 

was dismissed from this proceeding on May 4, 2022, and is no longer a party. The parties seek 

approval of the settlement agreement, a cease and desist order entered against ONE, and 

dismissal of this proceeding with prejudice. Motion at 12. 

The Federal Maritime Commission (“Commission”) initiated this proceeding on 

December 30, 2021, by issuing an Order of Investigation and Hearing (“OIH”) to determine 

whether Respondents violated section 41102(c) of the Shipping Act by overbroadly defining and 

applying the definition of merchant in ONE’s bill of lading in such a manner as to unilaterally 

impose joint and several liability for freight and/or charges on a party with whom ONE was not 

in contractual privity and who had not consented to be bound by the terms of the bill of lading. 

OIH at 2. In addition, the Commission ordered the proceeding to be expedited. OIH at 7-8. 

The proceeding was temporarily stayed while the Commission considered a petition 

seeking reconsideration and rescission, which was denied on January 28, 2022. A motion to 

dismiss was denied on February 23, 2022. The parties engaged in discovery, with an order 

granting a motion to individually identify respondents issued on March 28, 2022, and an order on 

motions to compel and to dismiss issued on May 4, 2022. Briefing deadlines were set but the 

parties requested multiple extensions while they negotiated the original settlement agreement. On 

June 28, 2022, the original confidential original settlement requested by the parties was 

approved. On July 15, 2022, the Commission issued a Notice of Determination to Review. 

1

 This initial decision will become the decision of the Commission in the absence of review by 

the Commission. Any party may file exceptions to this decision within twenty-two days of the 

date of service. 46 C.F.R. § 502.227. 

182 5 F.M.C.2d
On October 27, 2022, the Commission issued an Order Reversing the Initial Decision and 

Remanding (“Remand Order”). The Remand Order stated that the joint motion of the parties did 

not address the Subpart W factors which govern the assessment of civil penalties and settlements 

in enforcement actions, which rendered the Commission “unable to definitively determine 

whether the settlement agreement conforms with the requirements in Subpart W” and that it did 

not appear that “the civil penalty and other terms proposed in the settlement agreement are 

sufficient to resolve the serious allegations in the case.” Remand Order at 5-6. In addition, the 

Commission stated that “enforcement action settlements are not to be kept confidential.”

Remand Order at 6. “Because the Commission finds that the terms of the agreement violate the 

Commission’s Rules of Practice and Procedure and are objectionable from a policy perspective, 

it hereby reverses the I.D.’s approval of the agreement.” Remand Order at 6. The Commission 

required that the ALJ promptly issue a scheduling order and that an initial decision on the merits 

be issued within three months. 

On October 28, 2022, a remand scheduling order was issued. On November 17, 2022, 

counsel for the parties met with the undersigned in a virtual conference to discuss the status of 

settlement discussions. On November 18, 2022, a joint status report was filed by the parties 

summarizing the previous day’s conference and anticipation that a settlement would be reached. 

II. Legal Standard

Using language borrowed in part from the Administrative Procedure Act, Rule 75 of the 

Commission’s Rules of Practice and Procedure gives interested parties an opportunity, inter alia, 

to submit offers of settlement where “time, the nature of the proceeding, and the public interest 

permit.” 46 C.F.R. § 502.75(b); see 5 U.S.C. § 554(c). If dismissal is sought due to a settlement 

by the parties, “the settlement agreement must be submitted with the motion for determination as 

to whether the settlement appears to violate any law or policy and to ensure the settlement is free 

of fraud, duress, undue influence, mistake, or other defects which might make it unapprovable.”

46 C.F.R. § 502.72(a)(3). “Unless the order states otherwise, a dismissal under this paragraph is 

without prejudice.” 46 C.F.R. § 502.72(a)(3). 

The Commission has a long history of approving settlement agreements that meet the 

required criteria, including in enforcement proceedings. 

The Commission’s decisions and regulations have long indicated a broad policy 

favoring settlement. In reviewing a proposed settlement, the Commission 

evaluates whether it would contravene any law or public policy, and whether it is 

“fair, reasonable, and adequate.” As the parties note, the Commission weighs 

enforcement policy in terms of deterrence and compliance, likely costs and delay, 

and “pragmatic litigative possibilities” regarding the proceeding’s potential 

outcomes. 

Possible Unfiled Agreement Between Hyundai Merchant Marine Company, Ltd. and 

Mediterranean Shipping Co., S.A., Docket No. 97-07, 2000 FMC LEXIS 2 at *4 (FMC May 2, 

2000) (citing Old Ben Coal Co. v. Sea-Land Serv., 21 F.M.C. 506, 512-513; 18 S.R.R. 1085, 

1091 (ALJ Nov. 29, 1978); Far Eastern Shipping Co. – Possible Violations of Sections 16, 

183 5 F.M.C.2d
Second Paragraph 18(b)(3) and 18(c), Shipping Act, 1916, 21 S.R.R. 743, 1014 (ALJ Mar. 25, 

1982)). 

The Commission has routinely held that negotiated settlement agreements should 

be approved unless the agreements present one of a few defects requiring 

disapproval. The Commission has consistently adhered to a policy of encouraging 

settlements and engaging in every presumption which favors a finding that they 

are fair, correct, and valid. Despite the general preference for approval of 

settlement agreements, the Commission does not merely rubber stamp any 

proffered settlement. Instead, the Commission typically reviews a settlement 

agreement to ensure that it does not contravene law or public policy. Such review 

typically includes evaluating factors to determine that the settlement agreement 

was not a product of fraud, duress, undue influence, or mistake. The Commission 

also reviews the terms of settlement agreements to ensure that the terms are fair, 

reasonable, and adequate. The review process frequently involves a balancing of 

the likelihood of success on the merits against the cost and complexity of 

proceeding to final judgment. 

World Chance Logistics (Hong Kong), Ltd. and Yu, Chi Shing, a.k.a. Johnny Yu – Possible 

Violations of Section 10 of the Shipping Act of 1984, Docket No. 09-07, 2010 FMC LEXIS 27 at 

*5, 31 S.R.R. 1346, 1350 (FMC May 20, 2010) (internal citations omitted).

This is an enforcement proceeding and the Commission has instructed that the Subpart W 

factors be considered. Under Subpart W, Commission Rule 603(b), in “determining the amount 

of any penalties assessed,” the Commission is required to “take into account the nature, 

circumstances, extent and gravity of the violation committed and the policies for deterrence and 

future compliance with the Commission’s rules and regulations and the applicable statutes. The 

Commission shall also consider the respondent’s degree of culpability, history of prior offenses, 

ability to pay and such other matters as justice requires.” 46 C.F.R. § 502.603(b). These factors 

have since been codified in 46 U.S.C. § 41109 by the passage of the Ocean Shipping Reform Act 

of 2022, Pub. L. No. 117-146, 136 Stat. 1272. Remand Order at 6 n.3. 

In addition, Commission Rule 603(a), governing the assessment of civil penalties in 

Commission-instituted proceedings, states that the “full text of any settlement must be included 

in the final order of the Commission.” 46 C.F.R. § 502.603(a); see also Remand Order at 6. 

III. Settlement Agreement Analysis

A. Settlement Terms

The parties state that the “revised Settlement Agreement addresses the purpose the 

Commission articulated in its OIH and Order Reversing the Initial Decision and Remand; 

specifically, the rules in Subpart W, which govern, among other things, the assessment of civil 

penalties 46 C.F.R. §§ 502.601-502.605.” Motion at 2 (footnote omitted). In addition, the parties 

state: 

184 5 F.M.C.2d
The Parties agree to resolve their legal dispute in the Settlement Agreement and 

agree that settlement is in the interest of both parties, as it conserves litigative and 

administrative resources. Furthermore, the Settlement Agreement addresses the 

Commission’s enforcement interests of deterrence and compliance, while 

providing clarity and benefits to the shipping public, such as, immediate relief to 

third parties performing vital supply chain activities. A summary of terms of the 

Settlement Agreement are as follows: 

1. ONE will pay a civil penalty of $131,332.00;

2. ONE will immediately limit the use of its Bill of Lading “Merchant”

definition in the U.S. foreign trade to shippers, consignees, and persons

with a beneficial interest in the cargo (46 C.F.R. § 515.2(b));

3. ONE will add an explanatory note to its U.S. tariff explaining its

“Merchant” limitation;

4. ONE agrees to the issuance of a cease-and-desist order prohibiting ONE

from collecting monies owed ONE under its bill of lading from nonMerchants or entities with whom ONE has no direct contractual

relationship; and

5. ONE will immediately stop invoicing non-Merchants or entities with

whom ONE has no direct contractual relationship.

The Parties note that, in part, the subject matter of the OIH and this settlement 

agreement is currently being addressed by the Commission in rulemaking and that 

the settlement agreement provides relief to the shipping public now, rather than 

when a final rule is issued. 

Motion at 2-3.

Consistent with Commission Rule 603(a), the full text of the settlement agreement is 

attached to this order. 46 C.F.R. § 502.603(a). In addition, the settlement agreement should be 

posted on the docket on the Commission website. 

B. Criteria

1. Rule 72 Factors

Commission Rule 72 requires consideration of “whether the settlement appears to violate 

any law or policy and to ensure the settlement is free of fraud, duress, undue influence, mistake, 

or other defects which might make it unapprovable.” 46 C.F.R. § 502.72(a)(3). 

The parties assert that the agreement is public and therefore it “will inform other carriers 

and the shipping public so they may take note of its terms and conform their conduct thereto.” 

Motion at 6. The parties further contend that the settlement agreement “is free of fraud, duress, 

undue influence, mistake, or other defects which would otherwise result in its disapproval. The 

 185 5 F.M.C.2d
settlement is the result of arms-length, good-faith negotiations conducted with the advice of 

counsel. Approval of the Settlement Agreement is proper inasmuch as it does not violate any law 

or policy.” Motion at 6. 

Both parties are represented by counsel who have engaged in arm’s length negotiation 

and there is no indication of fraud, duress, undue influence, mistake, or other defects. The 

settlement promptly resolves an issue important to the shipping industry and avoids the potential 

costs and uncertain outcome inherent in litigation. Moreover, the agreement does not appear to 

violate any law or policy and is consistent with Commission requirements as outlined below. 

2. Rule 603 Factors

Commission Rule 603(b) requires consideration of “the nature, circumstances, extent and 

gravity of the violation committed and the policies for deterrence and future compliance with the 

Commission’s rules and regulations and the applicable statutes. The Commission shall also 

consider the respondent’s degree of culpability, history of prior offenses, ability to pay and such 

other matters as justice requires.” 46 C.F.R. § 502.603(b). The parties have different positions 

regarding a number of these factors. 

Regarding the nature, circumstances, extent and gravity of the violation, BEIC contends 

that these are aggravating factors, and the penalty amount “is based on the two bills of lading 

identified in the OIH and calculated using the maximum amount for a knowing and willful 

violation.” Motion at 7. BEIC further asserts that:

Beyond the dollar amount of the civil penalty, the true value of the Settlement 

Agreement lies in ONE’s agreeing to immediately alter its practices in the U.S.-

foreign trades. The Settlement Agreement coupled with the issuance of a ceaseand-desist order will deter future similar violative acts by ONE. Moreover, it will 

serve as notice to other VOCCs that a merchant clause inclusive of third parties 

who are not in contractual privity with the carrier, who have no beneficial interest 

in the cargo, and who have not consented to the carrier’s bill of lading terms and 

conditions, may run afoul of the Shipping Act. 

Motion at 7. 

ONE does not admit any violations and contends that “any violative act(s) found could 

number no more than the two bills of lading originally identified in the OIH. ONE also asserts 

that multiple mitigating factors exist that weigh in its favor. ONE believes the Settlement amount 

is significant because it exceeds the maximum allowed by law.” Motion at 6-7.

The OIH identified two bills of lading at issue and the settlement amount meets or 

exceeds the maximum amount for a knowing and willful violation. Therefore, the amount of the 

civil penalty is consistent with the number of violations alleged and the nature, circumstances, 

extent and gravity of the violations alleged. Moreover, there is significant benefit to the shipping 

public in having an expeditious resolution which clarifies the Shipping Act requirements and 

imposes a clear cease and desist order. 

 186 5 F.M.C.2d
Regarding the degree of culpability, BEIC argues that “ONE knowingly and willfully 

established a practice of unreasonably holding third parties liable through its bill of lading 

(merchant clause) in violation of the Shipping Act.” Motion at 8. ONE asserts that it named 

Greatway as a defendant in the underlying lawsuit “in good faith and based on federal maritime 

law,” and that “even if it violated the Shipping Act, its violation was not knowing and willful.” 

Motion at 9. “ONE and BEIC agree that culpability is capped in this Settlement Agreement for 

two knowing and willful Shipping Act violations.” Motion at 9. It is difficult to determine the 

degree of culpability at this stage of the proceeding, however, the civil penalty is consistent with 

the maximum penalty for the two violations alleged, and the cease and desist order ensures that 

further violations do not occur. Therefore, the proposed settlement is reasonable with regard to 

the degree of culpability. 

Regarding history of prior offenses and ability to pay, the parties agree that “ONE has no 

history of prior offenses and that ONE has the ability to pay the agreed upon civil penalty.” 

Motion at 9. These factors are consistent with the proposed penalty. 

Regarding other factors as justice requires, the parties state: 

The Settlement Agreement significantly benefits the shipping public by requiring 

ONE to change its activities promptly, not at some future undetermined date. 

Pursuant to the settlement, ONE agrees to immediately modify the interpretation 

of its Merchant clause with respect to the U.S.-foreign trades, limiting the term to 

shippers, consignees, and entities with beneficial interest in the cargo, and to 

explain the revised definition in its tariff. ONE also agrees to immediately cease 

and desist invoicing non-Merchants (as re-defined) or entities with whom ONE 

has no direct contractual relationship under its bill of lading and to formalization 

of that obligation in a cease and-and desist order. Thus, the Settlement Agreement 

fully resolves the behaviors raised in the OIH, addresses the concerns expressed 

by the Commission in Docket No. 20-16, and brings instant relief for the industry 

from such practices. The cease-and desist order ensures that such relief will 

persist until modified or superseded by subsequent Commission guidance, such as 

issuance of a final rule regarding the matters addressed in the settlement 

agreement. 

Motion at 9-10. These factors significantly weigh in favor of approving the proposed settlement 

agreement. 

3. Other Considerations

The parties raise two other considerations in reaching the settlement: the enforcement 

policy of deterrence and compliance and, litigative realities. Both are appropriate for 

consideration. 

Regarding the enforcement policy of deterrence and compliance, the parties assert: 

With respect to the policy of enforcement, BEIC stresses the importance of 

ensuring compliance with the Shipping Act of 1984. ONE supports the 

Commission’s objectives and has, in addition to payment of a civil penalty, 

187 5 F.M.C.2d
agreed to significantly alter its tariff terms, as well as its behavior thereunder, for 

all shipments within the jurisdiction of the Commission. 

The relief agreed to by ONE provides assurances of deterrence and future 

compliance. The Settlement Agreement requires ONE to change how it defines 

Merchant in the U.S. trades and who it invoices and imposes liability under its bill 

of lading. ONE’s commitment to these changes is reflected in its agreement to a 

cease-and-desist order. The agreed civil penalty adds further weight to the 

deterrent effect. ONE also recognizes that its failure to comply with the ceaseand-desist order may result in much higher penalties being demanded by the 

Commission in any enforcement action resulting from such failure. Additionally, 

approval of the Settlement Agreement would put other ocean common carriers on 

notice and is likely to deter them from engaging in similar practices. 

Motion at 10. These factors also significantly weigh in favor of approving the proposed 

settlement agreement. 

Regarding litigative realities, the parties assert that the “litigative realities and cost of 

continued litigation weigh in favor of approving the Settlement Agreement” and that the 

“decision to settle reflects the consideration that, if the matter were not settled, both parties 

would be expected to vigorously defend their respective positions.” Motion at 11. The parties 

outline the arguments that they would make. The parties conclude: 

Acknowledging the Parties remain divergent on the merits of the case, they have 

carefully considered the costs, benefits, and risks of further litigation, and 

determined that settlement is in their mutual interests, as well as that of the 

shipping public. Both sides recognize the litigation reality that resolution of the 

proceeding by trial would be an expensive undertaking that would divert 

resources from each of the Parties. Moreover, it is likely that, even with the 

expedited schedule required by the Reversal and Remand Order, as implemented 

by the Presiding Officer’s Revised Schedule issued on October 28, 2022, the 

likelihood of appeal to the Commission and the courts, the matter would take 

significant time to reach a final resolution. The settlement agreement by contrast, 

would resolve the matter without extended litigation bringing substantial valuable 

(and immediate) relief to the shipping public. Accordingly, consideration of the 

risks, costs, and uncertainties of continued litigation weighs in favor of approval 

of the Settlement Agreement. 

Motion at 12. The prompt resolution of this proceeding by the parties benefits the parties as well 

as the shipping public and therefore is a reasonable balance of the relevant factors. 

A review of the settlement agreement and the relevant factors indicates that it satisfies the 

criteria for approval. Therefore, the settlement agreement is reasonable and will be approved, 

including imposition of civil penalties and a cease and desist order. 

188 5 F.M.C.2d
IV. Order

Accordingly, upon consideration of the motion, settlement agreement, and the record, and

good cause having been stated, it is hereby: 

ORDERED that the motion to approve the settlement agreement between the Bureau of 

Enforcement, Investigations, and Compliance and Ocean Network Express, Pte., Ltd. be

GRANTED. It is 

FURTHER ORDERED that the request for a cease and desist order be GRANTED. 

ONE is hereby ORDERED to cease and desist (1) invoicing or making any other form of written 

or oral demand for monies owed under the Bill of Lading or tariff for freight and/or charges to 

any parties other than shippers, consignees, and persons with a beneficial interest in the cargo or 

with whom ONE has a direct contractual relationship; and (2) all efforts at collecting monies 

owed to ONE from any parties other than shippers, consignees, and persons with a beneficial 

interest in the cargo or with whom ONE has a direct contractual relationship. It is 

FURTHER ORDERED that this proceeding be DISMISSED WITH PREJUDICE. 

Erin M. Wirth 

Chief Administrative Law Judge 

189 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

ONE BANANA NORTH AMERICA CORP., Complainant

v. 

HAPAG-LLOYD AG AND HAPAG-LLOYD (AMERICA) LLC, 

Respondents. 

DOCKET NO. 22-03 

Served: December 20, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review 

the Administrative Law Judge’s November 16, 2022, Initial Decision has expired. Accordingly, 

the decision has become administratively final. 

William Cody 

Secretary

190 5 F.M.C.2d
FEDERAL MARITIME COMMISSION

AENEAS EXPORTING LLC., Complainant

v. 

HONEYBEE INTERNATIONAL INC., AND ALL AMERICA

SHIPPING, Respondents. 

DOCKET NO. 22-11 

Served: December 20, 2022 

NOTICE NOT TO REVIEW

Notice is given that the time within which the Commission could determine to review 

the Administrative Law Judge’s November 16, 2022, Initial Decision has expired. Accordingly, 

the decision has become administratively final. 

William Cody 

Secretary

191 5 F.M.C.2d
 

FEDERAL MARITIME COMMISSION 

TCW, Inc., 

 Claimant , 

v. 

EVERGREEN SHIPPING AGENCY 

(AM.) CORP. & EVERGREEN LINE 

JOINT SERVICE AGREEMENT 

 Respondents. 

 

 Docket No. 1966(I) 

 

Served: December 29, 2022 

BY THE COMMISSION: Daniel B. MAFFEI, Chairman, 

Rebecca F. DYE, Louis E. SOLA, Max M. VEKICH, 

Commissioners. Carl W. BENTZEL, Commissioner, dissenting. 

Order Affirming the Initial Decision 

On February 19, 2021, the Small Claims Officer (“SCO”) 

issued an Initial Decision (“I.D.”) finding that Respondents 

Evergreen Shipping Agency Corp.’s and Evergreen Line Joint 

Service Agreement’s (collectively, “Respondent”) charges were 

unjust and unreasonable, but that Respondent’s invoicing practices 

were not. Doc. 1. The SCO ordered Respondent to pay TCW 

(“Claimant”) the requested reparations ($510) and to cease-and192 5 F.M.C.2d
TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

desist from imposing per diem charges when such changes do not 

serve their incentivizing purposes, such as when empty equipment 

cannot be returned on weekends, holidays, and port closures. Five

days later, the Commission determined to review the SCO decision, 

and subsequently requested additional briefing on certain issues. 

The Commission received briefings from both Claimant and 

Respondent, as well as four amicus briefs. 

Having reviewed the supplemental briefings and amicus 

filings, the Commission now affirms and herein adopts the initial 

decision of the SCO in its entirety. 

 

I. BACKGROUND

A. Factual Background

On March 14, 2020, Evergreen Line Joint Service

Agreement, an ocean common carrier, issued Yamaha Motor 

Company, Ltd. (“Yamaha”), an importer and BCO, a non-negotiable 

sea waybill to deliver a shipment from the Port of Shimizu, Japan to 

Yamaha’s facility in Newnan, Georgia. Resp. Ex. 10. As part of the 

transportation arrangement for the shipment, Yamaha designated 

Claimant as its “preferred trucker” and thereby authorized Claimant 

to transport the shipment from the Port of Savannah to Yamaha’s 

facility. Id. 

Yamaha, Claimant, and Evergreen Shipping Agency, a New 

Jersey corporation that acts as a North American agent for 

Evergreen Line Joint Service Agreement, signed a Preferred 

Trucker Agreement (“PTA”) in which Respondent agreed to the 

designation of Claimant as the preferred trucker for Yamaha’s 

import and export cargoes. Resp. Ex. 9. Per the PTA, Claimant (as 

the motor carrier) is required to be a signatory to the Uniform 

Interchange and Facilities Access Agreement (“UIIA”) and 

Evergreen Shipping Agency’s individual addendum to the UIIA 

(“Evergreen Addendum”). Id. The UIIA is a contract between motor 

carriers and equipment providers and regulates the motor carrier’s 

access and use of the containers and chassis. Resp. Ex. 1. The 

 193 5 F.M.C.2d
 

 

 

 

 

TCW V. EVERGREEN SHIPPING AGENCY (AM) CORP. 

Evergreen Addendum supplements the general provisions of the 

UIIA and includes details specific to Respondent regarding free 

time, per diem, and dispute resolution procedures. Resp. Ex. No. 4. 

According to the contract, the PTA’s terms and conditions control 

in the event of a conflict. Resp. Ex. 9. 

Per the shipping agreement, Yamaha, and, therefore, 

Claimant, were entitled to receive twenty-one days of free time for 

the container and four days of free time for use of the chassis. Cl. 

Ex. F. The free time calculation did not include weekends or 

holidays. Resp. Ex. 4. Respondent would also provide Claimant a 

free chassis for use in transporting the Yamaha shipment. Id. 

Additionally, Claimant was required to pay per diem charges for any 

unreturned equipment after the expiration of the free time, including 

on weekends and holidays. Id. 

On April 28, 2020, the cargo arrived at the Port of Savannah 

and was reterieved by Claimant. Cl. Ex. F. Per the terms of the 

agreements, the free time expired for the chassis on May 4, 2020, 

and on May 19, 2020 for the container. Id. Claimant returned both 

on May 26, 2020. Id. Per the terms of the Evergreen Addendum, 

Respondent invoiced Claimant for per diem charges for the 

equipment in the amount of $1,050 for 7 days of per diem for the 

container (May 19-25, 2020), and $440.00 for 22 days of per diem 

for the chassis (May 4-25, 2020) for a total of $1,490. Id. 

 Claimant, in turn, disputed three days of charges 

corresponding to when the port was closed. Respondent declined to 

waive the charges. Cl. Ex. G. Claimant then paid in full and later 

invoiced Yamaha $1788.00 for the per diem charges, which Yamaha 

subsequently paid.1 Cl. Resp. to Aug. 2020 Order for Suppl. Info. 

On June 18, 2020, Claimant filed this small claims action

against Respondent alleging that Respondent violated 46 U.S.C. § 

1 Claimant up charged Yamaha $298 for the per diem charges, and invoiced 

Yamaha $1,260.00 for 7 days of per diem for the container and $528.00 for 22 

days of per diem for the chassis. Id. On August 21, 2020, Yamaha paid claimant 

$1,788.00 for the per diem charges. Id. There is no dispute before the Commission 

between Claimant and Yamaha. 

 194 5 F.M.C.2d
TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

41102 by: (1) invoicing per diem on weekends, holidays and during 

temporary port closures, when Claimant had no ability to return 

empty containers; (2) invoicing Claimant (the motor carrier) for per 

diem, instead of the BCO, even though the charges and free time 

were negotiated with the BCO; and (3) invoicing Claimant for 

chassis fees at a fixed rate, which is also negotiated directly with the 

BCO. Am. Cl. at 2. As relief, Claimant requested an order: (1) 

directing Respondent to reimburse it $510.00 in per diem charges; 

(2) forbidding Respondent from imposing per diem charges on days

when a motor carrier has no ability to return equipment due to a port

closure; and (3) directing Respondent and all marine lines to bill per

diem charges directly to the BCO instead of the motor carrier. Id. at

 

 

3-4.

B. Procedural History

On February 19, 2021, the SCO issued an I.D. finding that it

was unjust and unreasonable under § 41102(c) for Respondent to 

have charged Claimant per diem when the Port of Savannah was 

closed. Id. at 32. The SCO, therefore, ordered Respondent to pay 

Claimant reparations, and to cease and desist from imposing per 

diem when equipment cannot be returned on weekends, holidays, 

and port closures. Id. at 33. The SCO denied, however, Claimant’s 

request to order Respondent to invoice per diem to BCOs rather than 

Claimant. Id. 

On February 24, 2021, a Commissioner requested review 

and the Secretary issued the corresponding Notice, rendering the 

I.D. inoperative. To aid in its review of the I.D., the Commission

subsequently afforded the parties the opportunity to provide

additional briefing. The Commission received briefs from both

Claimant and Respondent. The Commission additionally received

amicus briefs from the National Association of Waterfront

Employers (“NAWE”), a trade association representing marine

terminal operators (“MTOs”), the World Shipping Council, a trade

organization representing ocean carriers, Ports America, Inc. and

SSA Marine Terminals, LLC, major U.S. MTOs, and the American

 195 5 F.M.C.2d
TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

Pyrotechnics Association, a safety and trade association for the 

fireworks industry. 

 

II. DISCUSSION

A. Standard of Review

When the Commission reviews an SCO’s Initial Decision

pursuant to 46 C.F.R. § 502.304(g), it has “all the powers which it 

would have in making the initial decision.” 46 C.F.R. § 

502.227(a)(6). The Commission therefore reviews the SCO’s 

findings de novo. Id.; see also Maher Terminals, LLC v. Port Auth. 

of N.Y. & N.J., FMC Docket No. 12-02, 2015 FMC LEXIS 43, at 

*110-*11 (FMC Dec. 18, 2015).

B. The Commission has jurisdiction

 Respondent raised as an affirmative defense the 

Commission’s lack of jurisdiction. Resp. to Am. Cl. at 6. 

Specifically, Respondent argues that Evergreen Shipping Agency is 

merely an agent for Evergreen Line Joint Service Agreement and is 

not itself a regulated entity subject to the provisions of 46 C.F.R. § 

545.5(b). 

As explained in the I.D., the claim against Evergreen 

Shipping Agency arises “out of a common nucleus of operative 

facts” with the claim against Evergreen Line Joint Service 

Agreement, over which the Commission has jurisdiction as a 

VOCC. Doc. 1 at 15. Here, the principle was the VOCC for the 

transportation at issue and the agent imposed the disputed per diem 

charges in connection with a port to door transportation from Japan 

to Newnan, Georgia. The Commission thus has jurisdiction to 

adjudicate this matter. 

Respondent further alleges that the Commission does not 

have the authority to adjudicate this action because the UIIA, the 

Evergreen Addendum, and the PTA are private contracts, and the 

“just and reasonable” requirement of § 41102(c) applies only to 

 196 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

TCW V. EVERGREEN SHIPPING AGENCY (AM) CORP. 

“regulations and practices” not to private contracts. Evergreen Br. at 

3-4. The per diem charges at issue, Respondent maintains, are not

regulations or practices but merely “contractual provisions in the

[PTA] that Claimant freely signed.” Resp. Reply Brief at 8; see also

Resp. Suppl. Brief at 10.

 The SCO correctly concluded that the Commission can 

adjudicate this action. I.D. at 14-18. The Commission can adjudicate 

allegations that contract terms are violative of the Shipping Act. See 

Final Rule: Interpretive Rule on Demurrage and Detention, Docket 

No. 19-05, 85 Fed. Reg. 29638 at 29648 (May 18, 2020) (“Ocean 

carriers and marine terminal operators (and ocean transportation 

intermediaries) do not have an unbounded right to contract for 

whatever they want. They are limited by the prohibitions of the 

Shipping Act, one of which is section 41102(c).”); see also Cargo 

One, Inc. v. COSCO Container Lines Company, Ltd., 28 S.R.R. 

1635, 1645; 2000 FMC LEXIS 14, *32 (FMC 2000) (the test for the

Commission’s jurisdiction is whether a Claimant’s allegations “also 

involve elements peculiar to the Shipping Act”). 

C. Respondent Charging PerDiem on Weekends,

Holidays, and Temporary Closures Was Unjust and

Unreasonable Under § 41102(c)

A successful claim for reparations under §41102(c), must 

demonstrate five necessary elements. 46 C.F.R. § 545.4. 

(1) The respondent is an ocean common carrier, marine terminal

operator, or ocean transportation intermediary

(2) The claimed acts or omissions of the regulated entity are

occurring on a normal, customary, and continuous basis;

(3) The practice or regulation relates to or is connected with

receiving, handling, storing, or delivering property;

(4) The practice or regulation is unjust or unreasonable; and

(5) The practice or regulation is the proximate cause of the

claimed loss.

 197 5 F.M.C.2d
TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the reasons set forth by the SCO, and reiterated below, 

the Commission finds that Respondent’s charging of per diem over 

a Saturday to Monday period from May 23-25, 2020, during which 

the Port of Savannah was closed, was unjust and unreasonable in 

violation of § 41102(c) and runs contrary to the Commission’s rule 

in 46 C.F.R. § 545.5(d). 

1. Respondent is a regulated entity

As explained by the SCO, and supra, Respondent, Evergreen 

Joint Service Agreement is an ocean common carrier and thus 

undeniably subject to the requirements of section 41102(c). 

Evergreen Shipping Agency imposed the per diem charges at issue 

on the ocean common carrier’s behalf, thereby acting as its agent. 

The SCO ruled that because the practice at issue occurred during the 

through transportation of international oceanborne shipping 

provided by a VOCC, the Commission has jurisdiction to adjudicate 

whether the charges imposed by the agent during the inland portion 

of the through transportation, which it then passed on to the VOCC, 

violate the Shipping Act. Doc. 1 at 15. Further, the SCO reasoned 

that “the claim against Evergreen-Agent arises “out of a common 

nucleus of operative facts” with the claim against EvergreenPrincipal, over which the Commission has jurisdiction as a VOCC.” 

Id.; see also, Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 

F. 3d 1174, 1180 (9th Cir. 2004) (“A court may assert pendent

personal jurisdiction over a defendant with respect to a claim for

which there is no independent basis of personal jurisdiction so long

as it arises out of a common nucleus of operative facts with a claim

in the same suit over which the court does have personal

jurisdiction”). The Commission concurs with the SCO’s reasoning.

Claimant thus demonstrates the first element to prove its section

41102(c) claim for reparations.

 198 5 F.M.C.2d
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. The act occurred on a normal, customary, and

continuous basis

46 C.F.R. § 545.4(b) requires that the acts or omissions occur 

on a normal, customary, and continuous basis. The SCO concluded 

that the claimed acts occurred on a normal, customary, and 

continuous basis because of their inclusion in the Evergreen UIIA 

Addendum and because Respondent specifically states in its brief, 

“Respondent’s only intent is to bill per diem allowed by the PTA 

that Claimant agreed to, which includes the PTA’s requirement to 

be a signatory to the UIIA addendum which mandates the alleged 

unreasonable conduct.” Resp. Reply Brief at 2. The SCO concluded 

that the evidence thus establishes that imposition of the disputed per 

diem charged by Respondents is “occurring on a normal, customary, 

and continuous” basis and is a part of Respondents’ normal business 

practices. Doc. 1 at 22. 

In their supplemental briefing, Respondent argues Claimant 

has only one factual showing of the alleged act and instead relies on 

the UIIA addendum and Respondent’s admission to establish this 

element. Respondent argues that the requirement in section 545.4 is 

that the act or omissions “are occurring” on a normal customary and 

continuous basis not merely “possible” or “contemplated.” Doc. 3 

at 4. NAWE presents a similar argument in its amicus brief, stating, 

“the fact that ports are normally closed on weekends, and that the 

UIIA Addendum permits charging demurrage after free time, does 

not constitute evidence that Respondents’ charge demurrage on a 

normal, customary, and continuous basis in all situations when a 

port is closed.” Doc. 5 at 5. 

First, NAWE’s argument is not based in the language of the 

UIIA addendum. The addendum does not “permit charging.” The 

addendum states, “[t]he Motor Carrier shall pay...”. Resp. Ex. 4 at 

4. This is not a situation where carriers have the option to charge if

they choose, instead the language of the addendum mandates when

the trucker must pay per diem. Further the addendum does not only

discuss charging demurrage after free time, it also specifically says

it will be charged on days when the port is closed. Thus, a more

accurate representation of the content of the UIIA addendum is that

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it mandates the payment of per diem on days when the port is closed 

and in doing so establishes that this practice is occurring a normal, 

customary, and continuous basis. 

Thus, the SCO properly found that the evidence establishes 

that imposition of the disputed per diem charged by Respondents is 

occurring on a normal, customary, and continuous basis. 

Accordingly, this element has also been demonstrated. 

Although not determinative in this analysis, the 

Commission notes that in this case, the Respondent, in its brief, 

admits that this is the policy to which it will adhere, further 

supporting the SCO decision. Resp. Reply Brief at 2. 

3. Respondent Charging Per Diemon Weekends,

Holidays, and Temporary Closures Was

Unreasonable

To find a violation, 46 C.F.R. § 545.4(d) requires that the 

practice be unjust and unreasonable. In § 545.5 the Commission 

further explains how it will assess the reasonableness of demurrage 

and detention charges and states that in general the Commission will 

consider the extent to which they are serving their intended primary 

incentivizing purpose. 46 C.F.R. § 545.5(c)(1). Additionally, the 

interpretive rule provides specific clarity with respect to the return 

of empty containers: “[a]bsent extenuating circumstances, practices 

and regulations that provide for imposition of detention when it does 

not serve its incentivizing purposes, such as when empty containers 

cannot be returned, are likely to be found unreasonable.” Id. § 

545.5(c)(2)(ii). 

As explained in the I.D., during the rulemaking the 

Commission was clear that no amount of detention can incentivize 

the return of a container when the terminal cannot accept the 

container. Doc. 1 at 25; see also 85 Fed. Reg. 29638, 29655. In this 

case there was nothing Claimant could have done to return the 

container between May 23-25, 2020 because the port was not 

receiving empty containers. The SCO correctly found that the per 

diem charges were unreasonable because “they could not have 

incentivized cargo movement given that the port was closed on those 

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days, making it impossible for Claimant to return the equipment.” 

Doc. 1 at 26. 

The Commission also rejects the argument raised in amicus

filings that not charging during the May 23-25, 2020 closure would 

have disincentivized the return of the container before the closure. 

See Doc 7 at 15, Doc. 9 at 3. These arguments were previously raised 

and similarly dismissed during the rulemaking process. 85 Fed. Reg. 

at 29652. First this disincentivizing argument neglects the 

commercial incentives to returning empty containers and one could 

easily argue the contrary position, namely that the ability to collect 

per diem, even if it is impossible for a truck to return equipment 

might disincentivize ocean carriers and marine terminal operators 

from acting efficiently. Id. at 29653. 

Respondent, NAWE, and WSC also claim that the SCO 

failed to consider 46 C.F.R. § 545.5(f). Section 545.5(f) states that 

nothing precludes the Commission “from considering factors, 

arguments, and evidence in addition to those specifically listed in 

this rule.” 46 C.F.R. § 545.5(f). The “other factor” most frequently 

cited by the amicus briefs and Respondent is the fact that Claimant 

could have returned the container prior to the May 23-25, 2020 

closure and that the container was already in per diem when the 

closures took place. Doc. 4 at 5-7, Doc. 6 at 9-11, Doc. 7 at 10 (“[i]f 

the party responsible for returning the equipment on time (i.e., either 

the shipper or trucker) can avoid the charge by taking some action 

prior to the expiration of allotted free time, the charge will be 

considered reasonable.”). 

This notion was discussed at length during the rulemaking

process and is frequently referred to as “once-in-demurrage, alwaysin-demurrage.” Under this principle, the shipper bears the risk of 

anything after free time has ended. As discussed in the rule, “once 

free time ends, it would not be unreasonable to impose demurrage 

on a shipper even if the shipper is unable to retrieve the container 

due to circumstances outside the shippers, or anyone's, control.” 85 

Fed. Reg. at 29652. 

The SCO correctly addressed and dismissed these arguments 

during in the I.D. Doc. 1 at 27. During the rulemaking process the 

Commission received comments from ocean carriers and marine 

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terminal operators urging the Commission to reaffirm the principle 

of “once-in-demurrage, always-in-demurrage.” 85 Fed. Reg. at 

29652. Conversely other commenters requested that the 

Commission expressly overrule the “once-in-demurrage, always-indemurrage” principle. The Commission did neither, stating that it 

“does not agree with some commenters’ arguments that it is always 

a reasonable practice to charge detention and demurrage after free 

time regardless of cargo availability or the ability to return 

equipment.” Id. at 29653. 

Just because a container is in a state of per diem, it does not 

automatically mean that charges can continue to accrue regardless 

of circumstance. Rather, the interpretive rule continues to apply, and 

the practice must be evaluated under that lens. In this case, for the 

reasons discussed in the I.D., such an evaluation leads the 

Commission to conclude that the charging of per diem on this 

container during the May 23-25, 2020 closure when it was not 

possible to return the container was unjust and unreasonable under 

§ 41102(c).

4. The practice or regulation relates to or is

connected withreceiving, handling, storing, or

delivering property;

46 C.F.R. § 545.4(c) requires that the practice relates to or is 

connected with receiving, handling, storing, or delivering property. 

As discussed in the I.D., the parties do not dispute that the per diem 

charges at issue relate to or are connected with receiving, handling, 

storing, or delivering property. Doc. 1 at 22. Respondent, 

nevertheless, raised an argument, that because the Claimant is a 

motor carrier the claim was outside Commission jurisdiction. Id. 

The SCO dismissed this argument, stating that during the 

rulemaking process the Commission made clear that truckers were 

one of the entities meant to be protected under § 41102(c). Id. The 

SCO ultimately concluded that the requirements of § 545.4(c) were 

established. Id. The Commission concurs with the SCO’s 

conclusion. 

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5. Respondent’s Practice is the Proximate Cause Of

The Claimed Loss

46 C.F.R. § 545.4(e) requires that the practice be the 

proximate cause of the loss. Respondent argues that Claimant was 

not injured, or that the per diem did not proximately cause any 

injury, because Claimant passed on the per diem with markup to 

Yamaha. Doc. 4 at 13-14, Doc. 5 at 11-12 (similar arguments were 

raised by NAWE). The SCO rejected that argument as a defense to 

liability under § 41102(c), but nevertheless ordered Claimant to 

return the per diem with markup to Yamaha so that Claimant did not 

receive a double recovery – i.e., reparations plus retention of the per 

diem/markup it received from the BCO. Doc. 1 at 29. 

In re Vehicle Carrier Services, 1 F.M.C.2d 440, 446 (FMC 

2019) the Commission stated that a respondent cannot rely on a 

claimant pass-on theory to avoid liability for reparations. This is a 

corollary to the direct purchaser rule in overcharge cases. Under the 

direct purchaser rule, only the party who actually paid the carrier 

can sue for reparations for an overcharge, not indirect purchasers 

further down the chain. Id. By the same token, a respondent cannot 

rely on the fact that a claimant passed on charges as a defense to an 

overcharge claim. Id. 

Under the direct purchaser rule, “parties suing for alleged 

overcharges can only recover reparations if they actually paid the 

carrier or received an assignment from the direct purchaser.” Gov’t. 

of Guam v. Sea-Land Serv., Inc., 29 S.R.R. 894, 902, 2002 FMC 

LEXIS 16, *4 (ALJ 2002), admin. final, 2002 FMC LEXIS 25 

(FMC 2002). As explained in the recent Commission case, In Re 

Vehicle Carrier Services, “[t]he basis for this rule first arose in 1934, 

when the Commission’s predecessor, the United States Shipping 

Board Bureau, held that the entity that paid the illegal overcharges 

was the person ‘directly damaged’ by the illegal rates and ‘[h]is 

claim accrued at once’ and the law ‘does not inquire into later 

events.’” See In Re Vehicle Carrier Services, 1 F.M.C.2d 440, 445 

(2019) (citations omitted). The Commission continued, “In the 80 

years since the Shipping Board held that a respondent could not rely 

on a pass-on theory to avoid liability to a Claimant for reparations, 

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the Commission has repeatedly found that a Claimant cannot rely on 

a pass-on theory to recover reparationsfor overcharges. In numerous 

decisions, the Commission hasruled that only the party who actually 

paid the carrier (or the valid assignee of the payor) can sue for 

reparations.” Id. at 446. 

The Commission’s rule is consistent with the Supreme 

Court’s direct purchaser rule developed in Illinois Brick v. Illinois, 

431 U.S. 720 (1977). There, the Supreme Court explained that this 

rule was necessary to avoid the complex task of accurately 

apportioning damages among various parties along the distribution 

chain. Id. at 730-37. The Court recognized that “these difficulties 

and uncertainties will be less substantial in some contexts than in 

others,” but chose not to carve out exceptions. Id. at 743-44. 

In the instant matter there is no question that Respondent was 

paid by the Claimant. Thus, under the Commission’s Direct 

Purchaser Rule, the Claimant has the ability to collect damages and 

Respondent cannot avoid responsibility by claiming Claimant was 

later reimbursed. 

D. Claimant’s Requested Relief

In addition to finding that Respondent’s actions in this case 

were unreasonable and ordering reparations, the SCO also ordered 

Respondent to, “cease-and-desist from imposing per diem charges 

when imposition of per diem charges does not serve its incentivizing 

purposes, such as when empty equipment cannot be returned on 

weekends, holidays, and port closures.” Doc. 1 at 33. This injunctive 

language mirrors 46 C.F.R. § 545.5(c)(2)(ii): “Absent extenuating 

circumstances, practices and regulations that provide for imposition 

of detention when it does not serve its incentivizing purposes, such 

as when empty containers cannot be returned, are likely to be found 

unreasonable.” 

The SCO correctly determined that it was appropriate to 

issue a cease-and-desist order. Doc. 1 at 29-30. Respondents were 

found to have violated section 41102(c). Id. at 20. Under 

Commission precedent, a cease-and-desist order may be issued 

where there is a violation of the Shipping Act. See, e.g., Bimsha Int’l 

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TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

v. Chief Cargo Svcs. Inc., 32 S.R.R. 1861, 1864, 2013 FMC LEXIS

32 at *22-*23 (FMC 2013).

The order followed Commission precedent regarding the 

language used in cease-and-desist orders. See Universal Logistic 

Forwarding Co. Ltd.,-- Possible Violations of Section 10(a)(1) and 

10(b)(1) of the Shipping Act of 1984, 29 SRR 474, 476 (FMC 

2002)(The Commission advised “the language used in cease-anddesist orders generally mirrors the violations committed coupled 

with the statutory language”).

The Commission has issued a variety of cease-and-desist 

orders, some warranting broader language, some more specific 

language. See, e.g., United Logistics (lax) Inc. - Possible Violations 

of Sections 10(a)(1) and 10(b)(2)(a) of the Shipping Act of 1984, 

2014 WL 5316339 (FMC 2014) (Respondent ordered to cease and 

desist from operating as an OTI without a license); Saeid B. 

Maralan, et. al. - Possible Violations of Sections 8(a)(1), 10(b)(1), 

19(a) and 23(a) of the Shipping Act of 1984, 1999 WL 1294893 

(FMC 1999) (Respondent ordered to cease and desist from charging

rates other than those filed in tariffs); but see, Commonwealth 

Shipping Ltd., Cargo Carriers Ltd., Martyn C. Merritt And Mary 

Anne Merritt - Submission Of Materially False Or Misleading

Statements to the Federal Maritime Commission and false 

representation of Common Carrier Vessel Operations 2003 WL 

21371703 (FMC 2003) (Respondent ordered to “cease and desist 

from committing any further violations of the Shipping Act.”). 

The Commission has also issued cease-and-desist orders to

advance compliance more broadly. In Alex Parsinia d/b/a Pacific 

Int'l Shipping and Cargo Express, 27 S.R.R. 1335, 1342, 1997 FMC 

LEXIS 46, *26 (ALJ 1997), the Respondent was not currently 

engaged in transportation activities, nevertheless, a cease-and-desist 

order was still deemed appropriate to “alert the shipping industry, 

serve to forestall future violations, and facilitate injunctions against 

possible future unlawful activity.” See also Geo Machinery FZE v. 

Watercraft Mix, Inc, 32 S.R.R. 1673, 1677 (SCO May 21, 2013), 

aff’d, 33 S.R.R. 329 (FMC 2014) (Order Affirming Settlement 

Officer’s Decision) (the small claims officer issued a cease-anddesist order to ”alert the shipping industry, serve to forestall future 

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violations, and facilitate injunctions against possible future unlawful 

activity.”); Stallion Cargo, Inc. Possible violations of Section 

10(a)(1) and 10(b)(1) of the Shipping Act of 1984, 29 S.R.R. 205, 

218 (ALJ 2001) (despite no evidence that Respondent had continued 

to violate the Shipping Act, cessation of unlawful practices, and 

argument that it had taken measures to prevent future violations, a 

cease and desist order was still appropriate because the Respondent 

intended to stay in business, and had previously persisted in 

committing numerous violations.). 

The Commission has previously expressed that “cease-anddesist orders are usually issued when there is a reasonable 

expectation that respondents will continue or resume illegal 

activities.” See Alex Parsinia d/b/a Pacific Int'l Shipping and Cargo 

Express, 27 S.R.R. 1335 at 1342-1343. Evergreen acknowledged in 

its filings that it intended to continue charging while the port was 

closed. Resp. Reply Brief at 2. 

Finally, for the reasons discussed in the I.D., the 

Commission also denies Claimants request that Respondents and 

“all marine lines” be directed to bill per diem charges directly to 

their customers. Amended Cl. Pg. 2. First, as noted by the SCO, 

judgments issued in this decision can only apply to Respondent 

because Claimant did not include any other marine line as a 

respondent in this proceeding. Doc. 1 at 31. Further, the fact that 

Claimant agreed to be billed for the per diem charges and appears to 

have profited from the billing arrangement, does not support its 

argument that the billing arrangement poses a hardship and a burden 

to it. Id. at 32. 

III. CONCLUSION

For the reasons explained in the I.D. and reiterated above, 

the Commission finds that Claimant has met its burden of proof in 

demonstrating that Respondent’s actions were unjust and 

unreasonable under § 41102(c), as interpreted following 46 C.F.R. 

§ 545.5.

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TCW V. EVERGREEN SHIPPING AGENCY (AM) CORP. 

Accordingly, the Commission AFFIRMS the Initial 

Decision. It is hereby ORDERED that Respondent shall pay 

reparations to Claimant by January 13, 2023, in the amount of 

$510.00 with interest ($11.62) running on the reparation award from 

June 6, 2020, totaling $521.62. 

FURTHER ORDERED, that absent extenuating 

circumstances Evergreen Shipping Agency (America) Corporation 

and Evergreen Line Joint Service Agreement cease and desist from

imposing per diem charges when imposition of per diem charges 

does not serve its incentivizing purposes, such as when empty 

equipment cannot be returned on weekends, holidays, and port 

closures. It is 

FURTHER ORDERED, that TCW Inc.’s request for an 

order requiring Evergreen Shipping Agency (America) Corporation 

and Evergreen Line Joint Service Agreement to invoice per diem 

directly to beneficial cargo owners is DENIED. 

By the Commission. 

 William Cody 

Secretary 

Commissioner Bentzel, dissenting: 

I disagree with the SCO’s finding that Evergreen’s conduct 

was unjust or unreasonable under § 41102(c). Accordingly, I 

disagree with the above Order and recommend that the Commission 

affirm the SCO’s decision with respect to the issues of invoicing 

TCW instead of the BCO and reverse the SCO’s decision with 

respect to the per diem charges. 

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I. LEGAL STANDARDS

The Commission reviews an I.D. de novo. 46 C.F.R. § 

502.227(a)(6) (when the Commission reviews an I.D., it has “all the 

powers which it would have in making the initial decision”). 46 

U.S.C. § 41102(c) prohibits common carriers, marine terminal 

operators, and ocean transportation intermediaries from failing to 

establish, observe, and enforce just and reasonable regulations and 

practices relating to or connected with receiving, handling, storing, 

or delivering property. 46 C.F.R. § 545.4 further requires § 41102(c) 

claimants seeking reparations to prove that the claimed acts or 

omissions of the regulated entity are occurring on a normal, 

customary, and continuous basis, and that the complained-of 

practice or regulation is the proximate cause of the claimed loss. 46 

C.F.R. § 545.5 informs § 41102(c) claimants (and others) that in

assessing the reasonableness of any charges, including “per diem,”

assessed by regulated entities on containerized cargo, the

Commission “will consider the extent to which demurrage and

detention are serving their intended primary purpose as financial

incentives to promote freight fluidity” (the “incentive principle”).

46 C.F.R. § 545.5(c)(1).

It is my view that terms such as “incentive principle” do not 

replace “reasonableness” which is the underpinning of the Shipping 

Act. In this case, my concern is that we are at risk of overstating the 

manufactured principle at the peril of usurping 

reasonableness. Further, it is my view that the Respondents, 

Evergreen Shipping, charged detention consistent with the 

“incentive principle” and the need to promote fluidity of movement. 

Specifically, in this case, the container and chassis were 

already exceeding limits of free time before implementation of the 

per diem penalties and the claimants well apprised of and cognizant 

of the standards for implementation of per diem detention penalties. 

In this case it is clear to me that the claimants knew when the Port 

of Savannah was open to business, and when they were supposed to 

re-deliver cargo equipment; there were no issues that were beyond 

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or outside of the control of the shipper justifying the denial of 

detention penalties. In essence, the shipper knew when the facility 

was closed and failed to timely re-deliver it before the stipulated 

time. 

II. INTERPRETIVE RULE

Unfortunately, the industry has been forced to rely on a 

series of ad hoc determinations and general guidance that neither 

affirms proper context for enforcing an adequate process in which 

detention and demurrage charges can be assessed nor outlines the 

improper implementation of penalties aimed at increasing cargo 

fluidity in movement. Compounding the challenge of establishing 

the reasonableness of shipping practices, is the challenge of defining 

“reasonableness.” 

While I generally agree with the proposition that detention 

and demurrage for circumstances outside of the shipper’s control, in 

instances where a shipper/trucker is unaware of unscheduled or 

unannounced policy changes that are made to provide access for the 

pick-up or return of containers or intermodal equipment, I do not 

believe that the incentive principle should be construed to provide 

an interpretation that prohibits the assessment of penalties for days 

that a terminal is closed for business, or on holiday. 

Penalty charges for detention and demurrage are intended to 

facilitate the movement of cargo from the port complex and the redelivery of intermodal cargo equipment back to the port complex. 

As such there should be a balance of expectation in performance. 

The carrier/terminal operator should provide a reasonable amount of 

free time before imposition of the demurrage penalty, and a 

reasonable period for the re-delivery of intermodal cargo equipment. 

The primary mechanism driving the incentive principle is not that 

we intend to immunize shippers for charges when terminal factifies 

are closed, but rather that we have clear communications on the 

expectation of pick-up of cargo and re-delivery of intermodal cargo 

equipment. The incentive is the notification of operating 

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requirements governing access into and out of the complex, and 

deadlines for performance on both ends. The shipper must be aware 

of and prepared to pick up cargo and return equipment within the 

required free time or pay penalties for the delay. 

The majority opinion in my view is overly concerned with 

the methodology of assessing detention and demurrage, rather than 

focusing on whether in this instance it reasonably achieved the 

objective of providing fluidity of movement of cargo. The terms of 

detention and demurrage are set by the ocean carriers by contract, or 

in some instances by their tariff, and marine terminals set detention

and demurrage requirements by the terms of publicly available 

schedules. They make their own decisions on what is necessary and 

appropriate in the implementation of potential penalties. As such,

they could choose to define detention and demurrage differently: 

either to define operations days to include days off and holidays or 

to shorten or expand the duration of detention and demurrage to 

reflect the time frame they seek to have covered. Effectively, this 

decision will have no value governing whether carriers or terminals 

alter policies on billing detention and demurrage because they are 

authorized to define the terms for the imposition of the penalty. 

Reviewing the facts in this particular case, and not focusing 

on whether their assessment methodology included assessments for 

a day off each week and a holiday, claimant had 21 days of total free 

time. An amount of time that, even excluding the days off, seems to 

be a more than a reasonable amount of time to make a port run, and 

return intermodal cargo equipment to the terminal. Instead of 

returning the equipment three weeks, two weeks or even one week 

ahead of time, before falling into demurrage, the equipment was 

held on to and effectively taken out of the supply chain. When the 

claimant did decide to return the equipment, it was on a holiday 

weekend. The Port of Savannah was closed the Monday of 

Memorial Day and it was also closed on Saturdays during the 

COVID crisis. The Port of Savanah confirmed that the port was in 

fact closed on Saturdays from mid-March 2020 to mid-June 2020, 

but these closures were communicated widely, and in my view the 

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TCW V.EVERGREEN SHIPPING AGENCY (AM)CORP. 

claimants were well positioned to know when they could pick-up 

cargo and return intermodal cargo equipment. 

For example, a month before a Saturday closure, the Port’s 

email system routinely notifies 1,400 trucking companies and the 

Port’s Everbridge text system reaches over 8,000 truck drivers who 

are alerted of operational closures or changes in schedule. In 

practice, the shipper would have received communication on the 

port’s operation schedule throughout the 21 days of free time. 

What makes the legal claim contesting assessment of 

detention about the port being closed on the weekend and holidays 

even more concerning is that it was a time when port and supply 

chain operations were widely acknowledged as suffering as a result 

well known operational disruptions throughout the supply chain. 

Throughout the system there were carriers waiting outside ports to 

berth, congestion at terminals, equipment dislocation for chassis and 

empty containers. Anyone moving cargo should and would have 

been on high alert. 

In the absence, of information on ad hoc closures restricting 

access to the Port of Savannah, I believe the provision of 21 days of 

total free time for pick-up of cargo and re-delivery of intermodal 

cargo equipment was a reasonable time allotment even with 

reductions due to Saturday closures and the Memorial Day holiday, 

and I believe that the claimants were provided more than adequate 

notification of the operational policies restricting access to the

terminal. Accordingly, I disagree with the SCO’s finding that 

Evergreen’s conduct was unjust or unreasonable under § 41102(c). 

Also, I disagree with the above Order and recommend that the 

Commission affirm the SCO’s decision with respect to the issues of

invoicing TCW instead of the BCO and reverse the SCO’s decision

with respect to the per diem charges. 

 

 211 5 F.M.C.2d