The Federal Maritime Commission (FMC) has issued a Show Cause order against Chinese-flagged carrier COSCO over its failure to pay a relatively small award for more than seven months, warning that the delay could expose the company to substantial civil penalties. The Commission has also raised questions over whether the carrier’s conduct was “knowing and willful” and warned that such inaction could undermine its regulatory authority.
The action stems from what appears to be a minor dispute related to demurrage and detention invoices sent in 2025 to a company called Agribusiness Holdings. While the award was for a relatively small amount, $24,328.80 in reparations plus interest, the FMC states COSCO did not make payment despite repeated contacts from the complainant and eventually from the FMC itself.
Notice of the award was served requiring payment by January 20, 2026, after the FMC found that COSCO had failed to properly issue invoices to the complainant for the D&D fees. The carrier failed to make payment for a total of 223 days.
The FMC highlights that, under the regulations, a common carrier such as COSCO may not retaliate or resort to any other unfair action because a shipper took action, including filing a complaint. The FMC is also empowered to impose civil penalties for violating its order.
At issue, and highlighted in the Show Cause notice, are broader issues about the authority and powers of the FMC. It notes that a U.S. Court of Appeals recently recognized in another matter that the FMC has a strong interest in preserving the integrity of its procedures. The court recognized that a “respondent’s disregard of binding FMC orders can undermine its authority.”
Under the statutes, the FMC is currently empowered to impose inflation-adjusted penalties of $14,988 with each day considered a separate violation. If the violation is found to be “willful and knowing,” the penalty jumps to $74,943, and again each day is a separate violation. COSCO’s violation could, under those rules, result in civil penalties of between $3.345 million and $16.725 million.
Source: The Maritime Executive
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