ZIM ordered to pay Samsung $3.7m for US demurrage violations

Israeli carrier ZIM has been ordered to pay about $3.7m to Samsung Electronics America (SEA) for violating the US Shipping Act.

The American affiliate of the Korean manufacturing giant filed a complaint with the Federal Maritime Commission (FMC) in October 2022, claiming Zim engaged in “unreasonable practices, retaliation, refusal to deal, and improper invoices for home appliance products shipped to the US”.

The case, which, according to FMC, saw the parties exchange more than two hundred thousand pages of documents, involved nearly 10,000 separate detention and demurrage (D&D) disputes on almost 3,000 containers from July 2019 to December 2022.

Samsung had sought damages of over $12m – $10.8m for D&D charges plus $1.4m in additional costs.

The majority of these shipments occurred prior to the Ocean Shipping Reform Act (OSRA), passed in 2022 and designed to resolve similar disputes quickly.

ZIM argued that the accumulation of disputed charges was one of the reasons it imposed multiple cargo holds on SEA’s shipments, preventing it from being delivered and leading to additional demurrage charges; however, FMC ruled this argument to be insufficient.

Meanwhile, FMC concluded that SEA has not established that ZIM was responsible for all detention and demurrage charges on door delivery/carrier haulage shipments.

“SEA does not present evidence necessary to determine which specific detention and demurrage charges were the fault of ZIM, particularly given that some charges were due to SEA’s customers’ inability to accept deliveries,” it said.

The two companies sought to settle the disputes earlier, and the proceeding was last stayed from April 18, 2024, to August 2, 2024, at the parties’ request.

Based on the record provided, “after extensive discovery was conducted”, FMC ruled for reparations on three accounts totalling $3.68m.

Samsung has also lodged cases with the FMC against COSCO, OOCL, SM Line and HMM, the latter being its largest complaint yet, claiming the South Korean carrier imposed around 96,000 detention and demurrage charges.