US Federal Maritime Commission receives complaint against Maersk

FMC receives complaint against Maersk
Kim Biggar September 2, 2022 https://splash247.com/fmc-receives-complaint-against-maersk/

U Shippers Group, an association of shippers, has filed a complaint with the Federal Maritime Commission against Maersk, alleging violations of the Shipping Act. Maersk entered into a shipping contract with U Shippers in June 2020. The contract provided minimum space commitments by Maersk for U Shippers members.

Maersk was at that time introducing a new online booking system called Twill. The system was still in development and not ready for general use. Maersk agreed to an arrangement whereby U Shippers would use Twill on an exclusive basis for a two-year period, in exchange for being the first shippers’ association introducing the system to its membership.

According to the complaint, beginning in late 2020 or 2021, Maersk embarked on a series of acts designed to shut out U Shippers from utilising the space promised to it under the contract. Maersk’s refusal to provide contractually agreed-upon space on its vessels forced U Shippers’ members to obtain space on other vessels at higher spot market rates.

Further, the contract obligated Maersk to pay U Shippers through a volume incentive program (VIP) based on the number of containers shipped. Maersk’s failing to provide allocated space reduced the amount of VIP payments that U Shippers was entitled to receive, said the association. Maersk allegedly ignored requests from U Shippers for VIP payouts, leading to a cash flow shortage for U Shippers.

In the complaint, U Shippers said it and its members have been damaged monetarily, in the form of lost fees and higher shipping costs from alternative carriers, in excess of $180m.

The initial decision of the presiding officer in this proceeding is to be issued by August 30, 2023, and the final decision of the commission by March 15, 2024. The commission has been increasingly busy of late sifting through a raft of complaints against a host of global liners.