American Seafoods’ shipping and logistics affiliates and the US government have settled litigation over what could have been hundreds of millions of dollars in fines over a controversial route for transporting Alaska fish to the US East Coast.
Affiliates Kloosterboer International Forwarding and Alaska Reefer Management on Wednesday announced they reached what they termed a global settlement with the US Customs and Border Protection and the Department of Justice.
Under the deal, the companies will pay $9.5m to settle more than $400m in potential fines for their use of the Bayside Canadian Railway, which exploited a loophole in the Jones Act sabotage law governing the shipping of cargo between US ports.
As a part of the negotiated settlement, the litigation will be dismissed, the companies said.
The settlement includes a release of all claims with respect to any party that was issued a penalty notice and any other supply chain participant that shipped seafood on a foreign-flagged vessel from Alaska to other US states using the Bayside railway.
The case dates back to August of 2021, when the US government filed a lawsuit seeking hundreds of millions in fines to be paid by the companiesover the decades-long use of a 100-foot rail line at Kloosterboer’s Bayside facility in New Brunswick, Canada, in violation of the US Jones Act.
