FMC Threatens Cosco with Multi-Million Dollar Fines Over Late Payment to Agricultural Exporter
Cubierto por 4 fuentesPublicado
- Journal of commerceFMC questions Cosco on late payment of reparations to ag shipper
- sea trade maritimeFMC targets Cosco with millions in late payment fines
- Trade news‘No more Ms. Nice FMC’ as regulator threatens Cosco with fine over delayed award payment
- Journal of commerceFMC questions Cosco on non-payment of reparations to ag shipper
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The U.S. Federal Maritime Commission (FMC) ordered Cosco Shipping to explain why it failed to pay an agricultural exporter's reparation on time, and questioned whether the carrier deliberately disregarded the ruling that required the payment. The U.S. regulator warned that the company could face civil penalties amounting to several million dollars over the delay.
Origin of the case
The dispute originated from a complaint filed with the FMC in July 2025 by Bridgewell Agribusiness, which demanded that Cosco reimburse detention and demurrage charges billed in 2022 on import containers, arguing that those charges violated the agency's regulations. The FMC had set January 20, 2026 as the deadline for Cosco to pay the $24,328.80 reparation, but the carrier did not make the payment until August 31, despite repeated claims from Bridgewell and several direct contacts from the FMC itself.
Fines at stake
According to the order issued by the FMC on October 2, the agency has the authority to impose civil penalties for failure to comply with reparation orders, with inflation-adjusted amounts of up to $14,988 per day, which can rise to $74,943 per day if the violation is found to have been committed knowingly and willfully. Based on the 223 days during which Cosco is alleged to have been out of compliance, the fine could range between $3.34 million and $16.7 million.
The regulator's position
The FMC stated in its order that the potential penalties in this case could be substantial and noted that Cosco was repeatedly warned over several months about the missed payment, raising the question of whether the violation was willful. Citing Supreme Court precedent and federal court rulings, the agency held that penalizing "knowing and willful" violations aims to deter companies from repeating such conduct, and that a higher penalty within the legal limits may be warranted to ensure that deterrent effect.
Increased oversight of Cosco
The FMC regards Cosco as a carrier controlled by the Chinese government, which subjects it to enhanced regulatory scrutiny. The company has until December 1 to respond to the order and justify why it should not face civil penalties for the delayed payment.
