Samsung files US$186 million FMC claim against CMA CGM

Samsung Electronics America (SEA) is seeking at least US$186 million in reparations from CMA CGM in a formal complaint filed with the US Federal Maritime Commission (FMC), alleging violations of the Shipping Act related to inland transportation and container charges.

According to the complaint, Samsung alleges that CMA CGM engaged in unjust and unreasonable practices involving demurrage, detention, rail storage, cargo holds and the handling of inland transportation obligations.

The dispute relates primarily to so-called “store door” shipments, under which CMA CGM transported Samsung containers under through bills of lading from overseas origins through US ports and onward to designated inland locations.

Samsung argues that, under these arrangements, CMA CGM was responsible for both the ocean and inland portions of the transportation.

Samsung alleges failures in inland transportation

According to the FMC filing, CMA CGM began transporting Samsung containers under store-door bills of lading in January 2020.

Samsung alleges that from around mid-2020, the carrier repeatedly failed to properly perform its inland transportation obligations, including timely removal of containers from marine and intermodal terminals and delivery to their designated inland destinations.

The electronics company claims it was subsequently charged demurrage, detention and other costs resulting from delays that were outside its control.

CMA CGM attributed some of the difficulties to factors including chassis and trucker shortages as well as port and terminal congestion, according to Samsung’s complaint.

However, Samsung argues that responsibility for those issues rested with the carrier under the store-door transportation arrangements.

Samsung says it ultimately paid more than 121,000 demurrage, detention and associated charges. The filing specifies more than 26,000 individual demurrage charges and over 94,000 detention-type charges.

Cargo holds and changes to delivery arrangements

The complaint also alleges that CMA CGM demanded payment of disputed charges and threatened to withhold the movement, release or delivery of containers when payments were not made.

Samsung claims these practices extended in some cases to containers unrelated to the disputed invoices, through what it describes as “finance holds” or “cargo holds.”

Another part of the dispute concerns CMA CGM’s alleged conversion of store-door shipments into container-yard, or CY, movements.

Samsung alleges that CMA CGM sometimes made these changes without its approval, leaving Samsung responsible for arranging inland transportation that it says the carrier had originally undertaken to provide.

The filing cites one container shipped from Busan, South Korea, through the Port of Long Beach to The Colony, Texas, in 2021. Samsung alleges that after the shipment was converted from store-door to CY arrangements, the container accumulated approximately US$162,800 in rail storage charges.

At least US$186 million sought

Samsung is seeking reparations of at least US$186 million.

According to the complaint, the amount includes US$148 million in allegedly excessive and unlawful demurrage, detention, rail storage and associated charges and costs.

Samsung is also seeking at least US$8.1 million for additional costs it says it incurred while carrying out inland transportation obligations and other mitigation measures, including additional personnel and off-dock container yard space.

A further US$30 million relates to prejudgment interest.

The company is additionally seeking lost revenues, employee and attorney time, legal fees and other relief, meaning the ultimate amount sought could exceed US$186 million.

Samsung alleges Shipping Act violations

Samsung alleges that CMA CGM’s practices violated Section 41102(c) of the US Shipping Act, which requires common carriers to establish, observe and enforce just and reasonable practices related to receiving, handling, storing and delivering property.

The complaint also challenges CMA CGM’s alleged practices concerning cargo holds, cargo releases, billing and dispute resolution, as well as its alleged failure to fulfil inland transportation obligations.

Samsung says it attempted to resolve the dispute with CMA CGM before filing the complaint but that those efforts were unsuccessful.

The company has asked the FMC to order CMA CGM to pay reparations, cease the allegedly unlawful conduct and provide any other relief deemed appropriate by the Commission.

The allegations have not been adjudicated, and the filing represents Samsung’s claims against CMA CGM rather than findings by the FMC.

Source: US Federal Maritime Commission, Samsung Electronics America, Inc. v. CMA CGM S.A., Docket No. 26-12.

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