ZIM ordered to pay Samsung $3.7m for US demurrage violations
ZIM Ordered to Pay $3.7 Million to Samsung Electronics
Israeli shipping company ZIM has been mandated to pay approximately $3.7 million to Samsung Electronics America (SEA) for breaching the US Shipping Act. This ruling follows a complaint filed by SEA with the Federal Maritime Commission (FMC) in October 2022, which accused ZIM of engaging in unreasonable practices, retaliation, and issuing improper invoices related to home appliance shipments to the United States.
Details of the Dispute
The conflict between ZIM and Samsung revolves around nearly 10,000 detention and demurrage (D&D) disputes concerning almost 3,000 containers from July 2019 to December 2022. The FMC noted that the case involved an extensive exchange of over 200,000 pages of documentation. Samsung initially sought damages exceeding $12 million, which included $10.8 million for D&D charges and an additional $1.4 million in related costs.
Most of the shipments in question occurred before the enactment of the Ocean Shipping Reform Act (OSRA) in 2022, legislation aimed at expediting the resolution of such disputes. ZIM contended that the accumulation of disputed charges led to multiple cargo holds on SEA’s shipments, which in turn delayed deliveries and resulted in further demurrage charges. However, the FMC found this argument insufficient to absolve ZIM of responsibility.
In its ruling, the FMC stated that SEA failed to provide adequate evidence to determine ZIM’s liability for all detention and demurrage charges associated with door delivery and carrier haulage shipments. The commission noted that some charges stemmed from SEA’s customers being unable to accept deliveries. After a thorough review of the case, the FMC awarded reparations to Samsung on three specific accounts, totaling $3.68 million.
Ongoing Legal Challenges
In addition to the case against ZIM, Samsung has filed complaints with the FMC against several other shipping companies, including COSCO, OOCL, SM Line, and HMM. The complaint against HMM is particularly significant, as it alleges that the South Korean carrier imposed around 96,000 detention and demurrage charges. The ongoing legal battles highlight the complexities and challenges faced by companies in the shipping industry, especially in light of recent regulatory changes aimed at improving shipping practices.
