AP Moller-Maersk wants to force a customer into arbitration, while customer U Shippers wants the US Federal Maritime Commission to resolve a dispute that could be worth $180m.
The Danish container ship giant sued in the US federal court for the Eastern District of New York on Monday to force the Brooklyn-based shipper association to continue with the arbitration process it started in May, before abandoning it to file a complaint with the FMC in August.
“U Shippers’ arbitration demand to Maersk acknowledges that [U Shippers’] breach of contract claims against Maersk are arbitrable under the parties’ service contract … and therefore the FMC lacks subject matter jurisdiction,” Maersk said in the lawsuit.
U Shippers alleged in its FMC complaint that it had a contract signed in June 2020 with Maersk including minimum space commitments that would not be honoured.
Instead, Maersk allegedly forced U Shippers into the inflated spot market, then cut payouts contractually owned, causing a cash flow shortage for the company.
U Shippers further accused Maersk of diverting its contracted capacity to a newly-formed shipping association. When it came time to negotiate an extension, Maersk allegedly refused, then went to U Shippers’ members and allowed them to set up accounts with its Twill system so they could book capacity directly.
“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 $180m dollars and currently accruing,” the shippers group said in the FMC complaint.
In Maersk’s lawsuit in federal court, the company said U Shippers had initially wanted to take the spat before the Society of Maritime Arbitrators following a May 2022 demand letter from U Shippers’ lawyers.
After negotiations in June, Maersk said it requested U Shippers appoint an arbitrator, to which U Shippers did not respond.
U Shippers is the latest US company to file a complaint with the FMC over allegations that liner operators failed to live up to their service contracts.
Mediterranean Shipping Co, Yang Ming, CMA CGM and Evergreen Line have all been subject to similar complaints before the US regulator that is charged with overseeing international shipping.
The complaints followed calls last summer from the US government to crack down on what it described as unfair practices by liner operators towards US shippers amid record port congestion.
Some of the liner operators have settled the disputes with their customers, while others have chosen to contest the allegations.
