The company says that the fines have left tons of U.S.-bound fish stuck in Canada, and that this week’s ruling may delay delivery even further.
A federal judge on Tuesday denied a request from one of the country’s biggest seafood companies for a temporary restraining order, which would have stopped U.S. Customs and Border Patrol (CBP) from enforcing $350 million in penalties the business is facing for alleged violations of maritime law.
It’s the latest development in a long-simmering fight over shipping regulations, a dispute that has left the fate of tons of seafood destined for U.S. food banks, schools, restaurants, and groceries stuck in limbo (read: Canada) for now. One of the core commodities stranded at the moment is pollock, the fourth-most consumed seafood in the U.S.
The National Fisheries Institute, a lobby group representing the seafood industry, estimated that legal dispute has tied up 26 million pounds of pollock at this point, and warned that extended delays could “cripple” the supply chain.
“At stake are thousands of American jobs and millions of meals,” said Melaina Lewis, communications director for the organization, in an email.
“At stake are thousands of American jobs and millions of meals.”
In August of this year, CBP began to levy fines against Alaska Reefer Management and its subsidiary Kloosterboer International Forwarding for alleged violations of the Merchant Marine Act of 1920. Both companies are owned by parent company American Seafoods, one of the biggest seafood harvesters in the world.
Also known as the Jones Act, the longstanding law requires that cargo moving between two points in the United States be transported by U.S. ships. The law has a few notable exceptions, including a carveout for shipping routes that include, at least in some part, travel over a Canadian railway. Since 2012, American Seafoods and its partners have been shipping products from Dutch Harbor, Alaska, to Calais, Maine, on a route that includes a detour on what is called the “Bayside Canadian Railway.”
CBP’s problem with that? The railroad is 100 feet long and it goes nowhere. Cargo gets loaded on one end, shipped back and forth, then gets unloaded right where things started mere minutes ago.
In August, CBP began issuing fines to American Seafoods’ subsidiaries, accusing the company and its customers and partners of violating the Jones Act. In September, the company sued the federal government, saying that CBP had known about the arrangement since it started and that penalties were excessive and violated due process. Two weeks ago, American Seafoods asked a federal judge to issue a temporary restraining order to bar CBP from collecting the fines.
The carveout requires shippers to register their routes with the Surface Transportation Board, the federal agency that oversees rail travel.
In her decision, Judge Sharon Gleason said that American Seafoods’ subsidiaries have not yet fully complied with the necessary criteria for getting a Jones Act exemption. The carveout requires shippers to register their routes with the Surface Transportation Board, the federal agency that oversees rail travel.
In a statement issued on Wednesday, the company said it would do so and refile for a temporary injunction within a week.
“As a result of this outcome, which in large part is positive, we will not be able to resume trucking goods as fast as we had hoped,” said Per Brautaset, president of Alaska Reefer Management, in the statement.
In the meantime, our million-pound pollock purgatory is expected to persist for now.
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