Policy & Compliance
intermediate port and terminating the contract and their responsibilities. To date, BIFA is not aware of any carrier either undertaking to, or actually refunding, any cost savings resulting from taking that action. Whilst any potential cost savings do not seem to be being passed on to customers, the lines have imposed a per-container deviation surcharge plus, for the shipper’s account, additional local port handling, storage and re-routing fees to the amended port of discharge. In addition, risk for the cargo shifts from the carrier to the cargo owner upon discharge at the alternative port of discharge, and the customer is responsible for arranging the onforwarding of cargo from the discharge port to one closer to destination. In some cases, the lines offered the onforwarding service on a commercial basis, provided that they received the necessary indemnity for additional costs and damage. Alphaliner identified an additional method that shipping lines can adopt to offset higher fuel costs, the use of slow steaming. It has been identified that the average sailing speed of a container vessel declined by 2.3% from Q4 of 2025. More noticeably this decrease occurred entirely after 28 February 2026. On 14 April, the lowest recorded average sailing speed (since March 2023) of 15.18 knots was identified by the publication. Calls for regulation There are calls for greater market regulation of shipping lines, even at an international level. However, these proposals lack detail and, with the possible exception of the United States Federal Maritime Commission, a noticeable lack of enthusiasm amongst regulators to investigate recent shipping line activities. A final point to note is that whilst shipping lines are global operations, most regulators work within national jurisdictions, putting the lines at a distinct advantage. Many would argue that carriers have done the best they can in a difficult situation – but maybe a wealthy cargo interest will test that view in the courts.
Many international competition and maritime regulators appear reticent to take action against shipping companies. One notable exception is the Federal Maritime Commission (FMC), which endeavours to control at least certain aspects of suppliers of shipping services to American business. The recent award to Bed, Bath and Beyond (now known as DK Butterfly 1) of record damages of over $45 million has been widely reported. This award covers the COVID-19 pandemic era practices of OOCL, leading to an initial claim of $165 million by the administrator against the carrier: the final settlement figure fell far short of the initial claim. Disregarding the claim for the higher amount, the FMC advised that the total award for $45,600,599.25 was based upon the carrier’s service being “not in accordance with service contracts or refusal to deal”. Of particular note was the finding of “retaliation” by the container line against Bed, Bath and Beyond. Additional claims DK Butterfly 1 has also lodged claims against BAL Container Lines for $9.5 million, Evergreen for $1.25 million and HMM for an estimated $16 million. There were other claims against MSC and Yang Ming. In all cases the claim alleged that the carriers exploited price inflation and unjustly exploited the confusing market conditions. DK Butterfly 1 claimed that OOCL had failed to meet minimum quantity commitments by more than 25%, forcing Bed, Bath and Beyond to pay $9 million to find capacity. In addition, OOCL’s detention and demurrage policy had further pushed up the importer’s costs. The FMC upheld these allegations when determining to make the award to DK Butterfly 1. When taking legal action, the shipper always faces large legal fees to bring a successful case against a carrier, placing the latter at a significant advantage. There was a sting in the tail of this case, namely that the Chinese carrier OOCL lodged an appeal against the ruling, contesting the size of the award and arguing that the FMC’s administrative judge did not have jurisdiction to hear the case. There are several claims pending against carriers, in addition to those previously mentioned, and it will be interesting to see how many are successful and whether they encourage other regulators to take action to prevent overcharging. Federal Maritime Commission imposes record fi nes on OOCL
Jebel Ali container port
fuel from one location to another. To date, spot rates have risen by 40%, roughly the same as the equivalent increase in crude oil prices. It is interesting that these costs are being recovered from a market that is facing an oversupply of capacity. Surcharge questions Where Members have expressed greater concern is with the numerous surcharges imposed by carriers due to ‘war-risk’, which has not been well defined. It is becoming increasingly common to question what the surcharge covers. Some cargo interests and freight forwarders have openly questioned their validity, stating for instance that deviation surcharge is being used to cover the cost of repositioning containers and vessels. They cite examples where vessels have been diverted whilst a considerable distance from the conflict zone. One area that has surprised BIFA is that the carriers’ decision to exercise their contractual right to ‘End of Voyage’ (EOV) at a destination earlier to the one shown on the original bill of lading has not attracted more comment. EOV declarations are contractual measures where carriers terminate voyages early due to safety risks, discharging cargo at an earlier/
June 2026 | 13
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