APL Limited: The Charges Behind the Military’s Shipping Bill

In the 2009 APL military container settlement, APL Limited agreed to pay $26.3 million to resolve allegations that it inflated and double-billed charges for shipments supporting U.S. troops in Iraq and Afghanistan. An employee brought the case, and the allegations reached into the everyday work of military shipping: plugging in refrigerated containers, keeping them operating and billing for services at a port. If you know what those services cost and what the government was charged, you know the comparison at the center of this case.

The Justice Department announced the settlement on February 13, 2009. APL was then the American arm of Singapore-based Neptune Orient Lines Limited. The allegations concerned thousands of containers transported from ports to inland delivery destinations in Iraq and Afghanistan. APL’s separate 2015 container-tracking settlement concerned allegations of billing for GPS tracking that devices failed to provide.

What the Government Alleged APL Charged

The government alleged that APL knowingly overcharged and double-billed the Defense Department for military-container transport. Its announcement identified different problems with the electricity, maintenance and subcontractor charges, each turning on a different comparison.

At a port in Karachi, Pakistan, APL allegedly billed more than the rate it paid to plug refrigerated containers holding perishable cargo into electricity. Here the comparison was between APL’s own expense and the charge it sent to the government. The supplier’s rate gives a billing employee something concrete to put beside the invoice.

For maintenance, the government alleged that APL billed above the contractual rate for keeping refrigerated containers operating at a Karachi port and U.S. military bases in Afghanistan. That comparison starts with the rate the contract allowed. Someone who knows the maintenance arrangement can explain how the charge on the government’s bill departed from it.

At a Kuwaiti port, the allegation concerned services performed by APL’s subcontractor that the contract did not reimburse. The services existed, according to the government’s account, but APL allegedly put them on the military’s bill anyway. Getting work done does not give a contractor a blank check from taxpayers.

What Proof Do You Need as a Whistleblower?

For military shipping charges, useful evidence connects the contract, the service and the government invoice. The contract’s payment terms determine which comparison matters. APL’s electricity allegation calls for a comparison with the rate the carrier paid. Its maintenance allegation calls for a comparison with the agreed rate, while the Kuwaiti port allegation turns on which services the government agreed to reimburse. We work with you to connect the part you know to the payment it affected.

That is why the original service record matters alongside the invoice. We work with you to trace a repeated or overpriced charge back to the service, expense or contract term behind it.

Why the Port Subcontractor Matters

The Kuwaiti port allegation sits at the junction between prime contractor and subcontractor: a subcontractor performed the services, and APL allegedly included non-reimbursable charges in its government invoices. The local service and the final military bill belong in the same account of what happened.

The 2022 report Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, published by Transparency International Defence and Security, recommends reporting subcontractors, their ownership and the itemized value of their services when prime contractors submit invoices. Writing about private military and security companies, it explains why the identities behind the bill matter:

Applied to APL’s port-service allegation, the useful comparison is the subcontractor’s work against what APL billed and what the contract would pay. An insider may know the service behind a charge that a person reading only the government’s invoice cannot explain. That knowledge gives us a place to start following the money.

The Employee’s Case and the Whistleblower Reward

An APL employee filed the case in San Francisco under the False Claims Act’s qui tam provisions. The Justice Department’s announcement said the employee would receive $5.2 million as a share of the settlement proceeds. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The investigation brought together agents from the Defense Criminal Investigative Service and the Army’s Criminal Investigation Command, with support from Defense Contract Audit Agency auditors. They worked with the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Northern District of California.

Maersk and the Charges Around a Container

The same shipping whistleblower also brought a separate case against Maersk Line Limited, which agreed to a $31.9 million settlement announced on January 3, 2012. The government alleged detention charges beyond contractual allowances and failure to pass through storage rebates. That case puts another side of overseas defense logistics billing in view: money the carrier should credit back can matter as much as the charge it submits.

APL’s earlier case focused on inflated and duplicate charges, including the electricity, maintenance and Kuwaiti port services. Maersk’s allegations also reached the allowances and rebates around a shipment. For an insider, the useful knowledge may sit in the local service, the carrier’s billing or a credit that never reached the government.

You Know the Charge Behind the Container

If you know why a military shipping charge exceeds the agreed rate, repeats a service or bills for services the contract does not reimburse, talk to our whistleblower experts about the shipment and the bill. We build your case around that knowledge and bring in defense contractor whistleblower lawyers who understand shipping charges and subcontractor payments. You have a partner who can follow the transaction with you and stay beside you through the case.