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First formal complaint against shipping lines being filed with FMC

Aerial view of container ship at sea port

First formal complaint against shipping lines being filed with FMC

Aerial view of container ship at sea port

Aerial top view of container ship at sea port

US home goods importer MCS Industries has filed a complaint with maritime regulators accusing Cosco Shipping and Mediterranean Shipping Co (MSC) of collusion and as a result violating service contracts to take advantage of soaring transpacific container spot rates and premiums.

The accusation is the first formal complaint accusing container lines of taking advantage of the pandemic-driven disruption in ways that violate the Shipping Act.

MCS Industries declared Cosco and MSC continue to fail to honour service contract allocations, inflicting more than US$600,000 in damages.

“In negotiations for the current shipping year, [Cosco and MSC] and other global ocean carriers collectively refused to provide MCS sufficient commitments in their advance service contracts, instead providing only a fraction of the space MCS needed at substantially higher prices, which MCS accepted in order to secure such space, believing that such higher prices would fully compensate [Cosco and MSC] for current market disruptions,” said MCS.

Federal Maritime Commission commissioner Rebecca Dye proposed ways that Congress could strengthen anti-retaliation protections, including doubling reparation levels.

The FMC has come under pressure from Congress and the Biden administration to crack down on shipping law violations. This is well and good for shipments to the US but it does nothing to alleviate similar concerns in the global marketplace.

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