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Tuesday, August 4, 2020

Maritime Logistics Professional

July 20, 2017

Maersk Temporarily Exempt from Service Contract Filings

  • (File photo: A.P. Moller - Maersk)
  • William Doyle (Photo: FMC)
  • (File photo: A.P. Moller - Maersk) (File photo: A.P. Moller - Maersk)
  • William Doyle (Photo: FMC) William Doyle (Photo: FMC)

I voted in favor of Maersk Line A/S’ petition for Temporary Exemption Service Contract Filings as a result of the so-called Petya virus which severely disrupted Maersk’s information systems, including the system that stores service contract data. Due to this cyber attack, Maersk Line had been unable to determine which shippers to contact in order to extend or renegotiate certain service contract rates. Further, even if Maersk was able to identify which contracts needed attention, the company was not be able to electronically file the documents because of the damage caused by the virus.

Basically, by granting the petition, Maersk will not require customers to pay higher tariff rates to shipments tendered during the 20-day period, but rather, this action permits Maersk to apply service contract rates to such shipments that were agreed upon and filed after the date of cargo receipt without violating the Shipping Act. More to the point, Maersk is able to provide service to its customers on the same commercial terms as it would have had it been able to conclude and file contacts and amendments. Thus, granting Maersk’s petition is practical, fair and appropriate. Maersk’s requested exemption will not result in a substantial reduction in competition or be detrimental to commerce. 

Separately, I commend Maersk for making the decision to waive demurrage and detention fees arguably accrued by customers during the period when a system outage caused by the Petya cyber attack impacted its ability to release cargo – it’s the right thing to do. 

Finally, let this be a teachable moment for all entities in the maritime and logistics transportation chain. This cyber attack happened to Maersk, the largest ocean carrier in the world. If it can happen to them, it can happen to anyone. All of us need to redouble our efforts and secure the best IT system protections. 

The “Order Granting Petition” issued by the Commission served July 19, 2017 is available here.

The Author
William P. Doyle is a Commissioner with the U.S. Federal Maritime Commission. The FMC, among other things, regulates liner companies, ocean transportation intermediaries and marine terminal operators. The thoughts and comments he expresses here are his own and should not be construed to represent the position of the Commission or his fellow Commissioners.

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