Samsung Electronics America has lodged a complaint against SM Line, alleging that the liner operator has forced it to pay charges and even do the carrier’s job amid the US supply chain crunch.
The complaint before the Federal Maritime Commission (FMC) is the second by the consumer technology giant’s US arm, which also launched a similar case against Israeli liner operator Zim.
The company contends that SM Line has forced it to pay “staggering” detention and demurrage charges.
And it alleged violations of the US Shipping Act’s protections against unjust and unreasonable practices, as well as violations of the Ocean Shipping Reform Act, which became law last June.
Samsung Electronics America’s lawyers, Holland & Knight, alleged that SM Line dramatically increased those charges even though the delays resulted from the carrier’s own inland transportation failures.
And they complained that the consumer technology giant had to take on the responsibilities of a carrier, arranging for inland trucking and paying for SM Line’s inland terminal charges without reimbursement.
“As a result of SM Line’s conduct, [Samsung Electronics America] has sustained serious and substantial injuries and monetary damages, including paying erroneous demurrage and detention charges,” wrote the lawyers, led by New York partner Christopher Nolan.
The company is still tabulating the costs, but the lawyers allege that since 2020 it has faced more than 4,500 individual demurrage charges and 10,000 detention charges.
TradeWinds’ calls to SM Line’s offices in the US and South Korea rang unanswered on Friday.
Samsung Electronics’ attorneys wrote that the company had relied on SM Line to transport its containers at sea and inland “store door” services all the way to its products’ ultimate destination at its warehouses or customers’ stores.
But they alleged in the complaint that, as the US faced a supply chain crunch, the Seoul-based carrier repeatedly failed to perform its inland transport obligations.
“As a result of SM Line’s unreasonable practices, [Samsung Electronics America] has been forced to pay excessive and unlawful charges incurred by SM Line — known as ‘demurrage and detention’ charges — and has been forced to undertake and perform the ocean carrierʼs inland transportation responsibilities in order to continue to import its products sold to American consumers,” wrote the lawyers.
They said the electronics company was not alone in facing “exploitative” demurrage and detention charges, which rose to such levels that they made it into the 2022 State of the Union address by US President Joe Biden.
Samsung Electronics alleged that when it asked about the rising charges it faced, the carrier blamed chassis and trucker shortages, weather and port congestion. All of those, Holland & Knight alleged, were out of the shipper’s control and were instead the responsibility of SM Line. At the beginning of the problems, the carrier waived some of the charges, but it later refused.
The case is before administrative law judge Erin Wirth.
Samsung Electronics was already the most recognisable claimant on the FMC’s docket, where liner operators are facing an array of claims over fees levied on customers during the container shipping crunch that jammed up ports and drew the ire of US officials but fuelled record profits.
The company continues to pursue its complaint against Zim, which involved similar allegations over the inland portion of “store door” services.
