Shipping giant counter-sues cargo owner!

The dispute between HMM and Samsung Electronics America (SEA) over demurrage and detention (D&D) during the pandemic has escalated.

Documents from a Los Angeles court show that South Korea's flagship liner company HMM has filed a lawsuit against Samsung Electronics America. HMM is demanding nearly $13 million in unpaid payments from Samsung Electronics New York and California, while seeking to dismiss Samsung Electronics America's complaint to the Federal Maritime Commission (FMC).

Samsung Electronics America previously complained to the FMC about a range of liner companies, including SM Line, and in early June filed what may be its largest complaint to date against HMM, alleging that HMM "wrongly" charged about 96,000 D&D fees.

The statement submitted by SEA stated that "since mid-2020, HMM has repeatedly violated fair and reasonable practices related to its inland transportation obligations, including failing to promptly ship SEA containers from US marine and intermodal terminals and failing to promptly deliver SEA containers to its designated inland locations. At the same time, HMM began to charge SEA so-called D&D fees incurred for inland transportation, and the amount increased significantly."

SEA said HMM "provided various excuses" for the charges, ranging from chassis and truck driver shortages to congestion and bad weather. The two sides' efforts to negotiate a solution to the dispute have apparently made no progress, and HMM proposed a "case-by-case responsibility assessment" for all 96,000 charges.

On July 1, HMM was once again the focus of FMC attention, of course, this time for a completely different reason. FMC announced through its official website that HMM would be listed as a carrier controlled by the South Korean government and included in the FMC's list of controlled carriers.

A controlled carrier is an ocean carrier operating in the United States as defined under U.S. shipping law, which itself or its operating assets are directly or indirectly owned or controlled by a foreign government. Unless there is a treaty between the United States and the country where the controlled carrier is located, the controlled carrier will be subject to "enhanced regulatory supervision" by the FMC.

The two major shareholders, Korea Development Bank (KDB) and Korea Ocean Commercial Corporation (KOBC), hold approximately 57.9% of HMM's shares, which is why the FMC made this decision.