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California intermodal trucker suing Hapag-Lloyd over detention fees

FMC complaint disputes $258,000 charged by ocean carrier for reefer storage

A California drayage business is suing Germany’s Hapag-Lloyd for allegedly forcing the trucking company to store empty refrigerated containers without getting paid.

According to a complaint filed this week at the Federal Maritime Commission, Long Beach-based Orange Avenue Express (OAE) also asserts that the ocean carrier has so far racked up $258,000 in detention charges against OAE that the trucking company asserts violate federal shipping regulations.

The complaint appears to be the first of its kind filed by a trucking company for overcharges related to storage and late fees amid record-breaking container volumes that continue to snarl U.S. West Coast port operations.

OAE’s complaint states that beginning in August, as space to store empty containers at Hapag-Lloyd-designated terminals at the ports of Los Angeles and Long Beach became increasingly scarce, the ocean carrier instituted a system whereby drayage carriers would have to send an email to Hapag-Lloyd to get a daily report of space availability.

However, when OAE attempted to secure an appointment to return an empty container, the trucking company often would be notified that all appointments had been filled or that the terminal would not accept empty containers, contrary to what Hapag-Lloyd initially told it.

“When Hapag was notified that no appointments were available, Hapag would reply that it had no control over the terminal appointment system,” according to the complaint. “Further, after repeated requests, Hapag failed to provide an overall solution to the daily refusal to accept empty reefer container returns or lack of appointments.”


Watch: Detention and demurrage “gets crazy”


OAE noted that when possible, it would take advantage of “dual” gate appointments, which requires the motor carrier to pick up a full container at the same time it dropped off an empty.

“However, because of the continuous lack of Hapag’s empty return locations, empty refer containers began accumulating at the OAE yard,” the trucking company stated. “Since the full containers were originally pulled as overweight containers on specialized tri-axle chassis, many empties remained on the specialized OAE-owned chassis for lengthy periods of time.” 

OAE stated that the problem at one point threatened to shut down its operations.

“Instead of adequately allowing for opportunities to return empty reefer containers, Hapag involuntarily forced OAE to act as a storage facility for Hapag empty containers without compensation,” the complaint states.

“Such actions not only should have incurred storage and related charges for the containers for Hapag’s account, it also caused OAE to assess storage, chassis use charges, flip charges (to remove and then remount Hapag containers onto chassis) to its customers and interfered with OAE and its customers since OAE was in the uncomfortable position of notifying its customers it could no longer pull full loads of Hapag cargo because empties could not be returned. Hapag’s actions also caused OAE to reject business because of the lack of space and available equipment being used by Hapag empty containers.”

In addition, the ocean carrier would charge detention “in an unreasonable, arbitrary and capricious” manner in violation of the shipping act, according to the complaint. “Hapag would still charge daily detention at $400 per day, per container even if the empty, in reality, could not be returned through the actions of Hapag or its designated terminals.”

OAE is seeking damages that include the cost to store Hapag-Lloyd’s empty containers, related chassis fees and detention charges assessed against it.

Hapag-Lloyd was not immediately available to comment.

FMC assigned the complaint to an administrative law judge, with an initial decision to be issued within the next year.

Click for more FreightWaves articles by John Gallagher.

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John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.