US Importer Accuses FedEx, MSC, Total Terminals of Unfair Detention and Demurrage
A U.S. protective equipment supplier accused Mediterrenaen Shipping Co., FedEx Trade Networks Transport & Brokerage, and Total Terminals International of assessing unfair detention and demurrage, failing to extend free time and failing to send an invoice for other charges, it said in a complaint to the Federal Maritime Commission.
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In the complaint, released March 20, Maryland-based AirBoss Defense Group specifically accused the three companies of continuing to issue detention and demurrage charges on a shipment that was detained under a CBP withhold release order, leading to at least $11 million in fees.
AirBoss also accused FedEx of accepting cargo from an "unlicensed ocean transportation intermediary"; filing a lien based on "violative ocean freight charges"; demanding payment of unfair detention, demurrage, per diem and chassis charges without invoices; and failing to provide accurate container and equipment return locations. The importer also accused FedEx and MSC of having "unjust and unreasonable" practices and regulations for handling, receiving, storing or delivering property.
AirBoss, which supplies protective equipment for miliaries and law enforcement, said it agreed in March 2021 to provide the Department of Health and Human Services with over 18 million boxes of nitrile rubber gloves, and it bought the gloves from a Thailand-based seller in June 2021. From May 2021 to December 2021, the importer worked with FedEx to transport the gloves from Malaysia to the U.S. FedEx used a transportation intermediary, and worked with MSC to help with ocean transportation. Total Terminals International was the marine terminal operator.
CBP issued the WRO against the manufacturer of the gloves in November 2021, which required the "exportation or destruction" of the 202 containers of gloves that AirBoss had imported. All three companies had "immediate notice" of the WRO, but AirBoss "failed to extend the free time" to the 202 containers and continued to assess "demurrage, detention, chassis charges, and per diem" on the containers detained by CBP.
AirBoss said 62 of the containers are still at the terminal, 135 were transferred to a CBP examination station, and five are being held by a motor carrier FedEx hired.
AirBoss added that FedEx sued it in the U.S. District Court for the District of Maryland in 2022 for failing to pay freight, demurrage, detention, chassis charges and per diem charges on the gloves. FedEx also "filed two CBP Form 3485 lien notices with CBP" for more than $14 million in May 2022.
"To obtain the release of the Liens and to avoid the accrual of additional charges and to export the subject cargo as quickly as possible," AirBoss said it reached a $5 million settlement agreement with FedEx, under which FedEx "released the Liens on August 15, 2022, stipulated to dismiss the Maryland Action with prejudice, and promised to arrange a meeting with MSC."
AirBoss said it later settled with MSC for $5.75 million for container charges not already settled with FedEx. But after the settlement, AirBoss said MSC changed or extended FedEx's bookings due to vessel delays and congestion at the Port of Los Angeles. When the importer learned of the changes, it refused to commit to a booking until MSC resolved the disputed chassis charges. The importer said the dispute remains ongoing.
In its FMC complaint, AirBoss asked the FMC to rule that it doesn't have to pay the detention or demurrage charges, and to order that the three companies stop their current conduct and pay reparations for all damages.
FedEx said it's “aware of the allegations made in the complaint and will vigorously defend the proceeding.” Total Terminals International and MSC didn't respond to our request for comment.