Federal Maritime Commission (FMC) Fines Shipping Companies

From the FMC web-site (click here for link)

Compromise Agreements Recover $617,500 in Penalties

October 22, 2013

NR 13-13

Contact: Peter J. King, Director, Bureau of Enforcement (202-523-5783)
Media Contact: Karen V. Gregory, Secretary (202-523-5725)
The Federal Maritime Commission has completed seven compromise agreements recovering a total of $617,500 in civil penalties. The agreements were reached with nine non-vessel-operating common carriers (NVOCCs) and freight forwarders located in the U.S. and abroad. The agreed penalties resulted from investigations conducted by the Commission’s Area Representatives in the Seattle, South Florida, Los Angeles, New York and Washington D.C. headquarters offices. Bureau of Enforcement staff attorneys negotiated the compromise agreements. The parties settled and agreed to penalties, but did not admit to violations of the Shipping Act.
In making the announcement, Federal Maritime Commission Chairman Mario Cordero stated: "The Commission remains committed to protecting the shipping public from unfair and deceptive practices."
The compromise agreements are:
East-West Logistics Inc.: East-West Logistics Inc. is a licensed NVOCC located in La Mirada California. It was alleged that East-West Logistics violated section 10(a)(1) of the Shipping Act of 1984 by knowingly and willfully obtaining ocean transportation for property at less than the rates and charges that would otherwise be applicable by misdescribing the commodities shipped under certain service contracts, and by improperly obtaining reduced rates limited to certain named accounts under certain service contracts. In addition, East-West Logistics violated section 10(b)(2)(A) of the Shipping Act by providing service other than at the rates and charges in its NVOCC tariff. East-West Logistics made a payment of $55,000 in compromise of these allegations.
Versatile International Corp. dba King Yang Shipping: Versatile International Corp. is a licensed NVOCC based in El Monte, California, and does business as King Yang Shipping. Commission staff alleged that Versatile knowingly and willfully violated section 10(a)(1) of the Shipping Act by engaging in cargo misdescription activities involving inbound shipments to the West Coast; and violated section 10(b)(2) of the Shipping Act by providing service that was not in accordance with the rates or charges contained in Respondent’s NVOCC tariff. Versatile made a payment of $55,000 in compromise of these allegations.
Whale Logistics (Shanghai) Co. Ltd.: Whale Logistics (Shanghai) Company is a foreign-based, bonded NVOCC with offices in Shanghai, China. It was alleged that Whale Logistics (Shanghai) violated section 10(a)(1) of the Shipping Act by knowingly and willfully obtaining transportation under service contracts to which Whale Logistics (Shanghai) was not a party, and violated section 10(b)(2) of the Shipping Act by providing transportation in the liner trade that was not in accordance with the rates and charges set forth in its published tariffs. Whale Logistics (Shanghai) paid $70,000 in compromise of these charges. Koil, Inc. dba VShip Co.: Koil, Inc., doing business as VShip Co., is a licensed and bonded NVOCC based in Long Island City, New York. Commission staff alleged that Koil knowingly and willfully transported cargo for the account of ocean transportation intermediaries, none of which had a published tariff or bond, in violation of section 10(b)(11) of the Shipping Act, and provided service to its customers that was not in accordance with the rates or charges contained in its published NVOCC tariff, in violation of section 10(b)(2) of the Shipping Act. Under the terms of the compromise, Koil paid $75,000.
China International Freight Co. Ltd.: China International Freight Co. Ltd. is a tariffed and bonded foreign-based NVOCC located in Taipei, Taiwan. Commission staff alleged that China International Freight violated section 10(a)(1) of the Shipping Act by knowingly and willfully obtaining transportation at less than the rates or charges otherwise applicable by falsely declaring the cargo to be shipped on behalf of a named account in the service contract. China International Freight made a payment of $80,000 in compromise of these allegations.
UTi, United States, Inc.: UTi, United States, Inc. is a licensed NVOCC and freight forwarder headquartered in Long Beach, California. UTi United States submitted a voluntary self-disclosure to the Commission disclosing potential violations of 8(a)(1) of the Shipping Act arising from a failure to maintain a general tariff covering all points or ports on its own routes and on any through transportation routes established. Based on the company’s self-disclosure and remedial measures voluntarily undertaken, a compromise agreement was reached under which UTi United States paid $140,000.
Top Shipping Logistics Co. Ltd., City Ocean Logistics Co. Ltd., and City Ocean International Inc.: Top Shipping Logistics Co. Ltd is a bonded NVOCC based in Qingdao, China; City Ocean Logistics Co., Ltd. is a bonded NVOCC located in Shenzhen, China; and City Ocean International is a bonded and licensed NVOCC and freight forwarder based in Diamond Bar, California. Commission staff alleged that Top Shipping, City Ocean Logistics, and City Ocean International knowingly and willfully obtained ocean transportation for property at less than the rates and charges that would otherwise be applicable by providing a false U.S. inland destination point for inbound shipments, and by allowing City Ocean Logistics to access service contracts to which City Ocean Logistics was not a signatory. In addition, Top Shipping, City Ocean Logistics, and City Ocean International provided transportation in the liner trade that was not in accordance with the rates and charges set forth in their published tariffs. The Parties made a payment of $142,500 in compromise of these allegations.
The Federal Maritime Commission is the federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.