Carriers Didn’t Meet Contract Commitments, Shipper Says
Illinois-based Euromarket Designs Inc., the parent company of furniture store chain Crate & Barrel, has accused several ocean carriers of failing to meet their service contract commitments and charging tens of millions of dollars in unfair fees, according to a complaint released by the Federal Maritime Commission Jan. 8.
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Much of the cargo space that Euromarket Designs had bargained for with four carriers was sold to other shippers at higher rates to maximize the carriers' profits, forcing the company to obtain alternative space elsewhere when the COVID-19 pandemic was fueling price inflation, the 62-page complaint alleges. For the cargo space that wasn’t sold to other shippers, Euromarket Designs contends it was forced to pay "extra-contractual" fees, such as peak season surcharges. The shortfalls in honoring service contract commitments and the extra-contractual surcharges resulted in excess costs of about $35.5 million, the company said.
The complaint accuses a total of 10 carriers of charging $31.4 million in unfair demurrage and detention fees in 2021 and 2022. It says Euromarket Designs often was assessed these charges when its ability to pick up containers at ports or return empty containers promptly was constrained due to factors beyond its control, such as port congestion or equipment shortages.
"Respondents’ behavior has caused significant harm to complainant in numerous ways, such as producing delays in freight transportation, appropriating scarce resources for ocean freight expenses, causing uncertainty and scarcity within the business, and disrupting complainant’s ability to operate, and resulting in injuries, including lost profits, in an amount to be determined at trial," the complaint says.
The complaint alleges that four carriers failed to meet their service contract commitments and charged both extra-contractual fees and unfair demurrage and detention fees: Mediterranean Shipping Company (MSC), Ocean Network Express (ONE), Evergreen and HMM. It says six additional carriers charged unfair demurrage and detention fees: Maersk, CMA CGM, Apex Maritime, CU Lines, COSCO Shipping Lines and Wan Hai Lines. Several carriers were asked to comment on the complaint, and they either declined or didn't respond.