The Federal Maritime Commission (FMC) of the United States issued an order against the shipping company COSCO, which operates under the Chinese flag, at the end of last week. This order includes a threat to impose significant civil penalties due to a delay of over seven months in paying a small fine. This FMC action reflects serious concerns about whether these violations were intentional and deliberate.
COSCO's Violations Details
This action stems from a seemingly minor dispute regarding demurrage and detention bills that were sent to a company named Agribusiness Holdings in 2025. While the amount of the fine was only $24,328.80 plus interest, the FMC noted that COSCO had refused to pay this amount despite repeated contacts from the complainant and then from the FMC itself. The fine notice was issued to COSCO, requiring payment by January 20, 2026, after the FMC determined that COSCO failed to properly issue the bills related to demurrage and detention costs.
Consequences and Potential Penalties
The Federal Maritime Commission has clearly stated that under regulations, a common carrier like COSCO cannot retaliate against a shipper for actions such as filing a complaint or resorting to other unfair actions. The FMC is also authorized to impose civil penalties for violations of its orders. Currently, the FMC is allowed to consider regulated penalties of $14,988 for each day of violation. If the violation is deemed "willful and intentional," the penalty increases to $74,943 and each day counts as a separate violation. COSCO's violations could lead to civil penalties ranging from $3.345 million to $16.725 million.
The Commission has also emphasized that in assessing civil penalties for willful and intentional violations, one of the key objectives is deterrence, and a higher penalty may be considered to have a sufficient deterrent effect. COSCO is required to submit a report to the Commission by December 1, 2026, explaining why civil penalties should not be imposed for its violations and failure to comply with the initial decision dated September 29, 2025, in a timely manner. The company must also provide all written correspondence with the complainant regarding the payment of the fine. The Commission's final decision will be announced by April 30, 2027, but it may be extended by the Commission's order.
