U Shippers Group Inc., a US-based shipping association, has lodged a US$180 million claim with the Federal Maritime Commission (FMC) against Maersk, alleging that the Danish carrier had failed to fulfill its contractual obligations during the Covid-19 pandemic.
The complainant noted that it entered into a service contract with Maersk’s US agent in June 2020 and that the contract, it claimed, provided for, inter alia, minimum space commitments by Maersk for U Shippers.
“Instead of selling the cargo space actually allotted to U Shippers under its Service Contract, Maersk denied U Shippers its allocated space and then sold such space to the highest bidder on the very same spot market to which their conduct forced U Shippers’ members to turn,” the complaint made to FMC on 24 August.
The deposition said, “Upon information and belief, Maersk has engaged and is continuing to engage in substantially similar conduct with other shippers. By refusing to allow U Shippers to utilise its allocated space, Maersk unreasonably reduced the VIP to which U Shippers would otherwise have been entitled.”
U Shippers’ alleged concerns bring to the fore already-known frustrations cargo interests had to contend with in the aftermath of a gross mismatch between available vessel capacity and wild demand swings, causing unprecedented disruptions in the supply chain ecosystem.
The complaint further noted, “Maersk ignored requests made by U Shippers for payouts per the VIP provisions of the Service Contract. This action has resulted in a cash crunch by U Shippers. Maersk engaged in the unreasonable practice of not only refusing to provide contractually agreed upon space under its service contract with U Shippers but instead allocating such space to individual members of U Shippers or to other shippers’ associations.”
U Shippers added, “Maersk further acted unreasonably in entering into services contracts with a newly formed shippers association, despite Maersk and U Shippers having agreed that in exchange for U Shippers and its members being the first shippers to utilise the Twill system that Maersk was introducing, U Shippers would have the exclusive right for a two-year period to enter into service agreements with shipper associations that did not pre-exist U Shippers’ Service Contract.”
It concluded, “As a result of the above actions and Shipping Act violations by Maersk, U Shippers and its members have been damaged monetarily, in the form of lost fees and higher shipping costs from alternative carriers which amounts are believed to be in excess of US$180 million dollars and currently accruing and to be further demonstrated in this proceeding.”
The FMC is expected to make its initial decision on the case by August 2023.
Jenny Daniel
Global Correspondent
Contact email: j.daniel@container-news.com
