News / US furniture distributor in $12m claim against CMA CGM over contract breaches

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CMA CGM has found its shipping practices in the dock, with two claims having been brought against it in less than a fortnight, one for potentially as much as $12m.

Colorado furniture distributor PKDC brought the whopping $12m claim to the Federal Maritime Commission’s (FMC) attention concerning CMA CGM’s “refusal” to honour both its quantity commitment, which forced PKDC to seek alternative capacity, and its D&D practices.

It states that CMA CGM’s “refusal to honour its quantity commitments under the contract caused [us] to expend additional sums for alternative shipping arrangements incurring additional shipping costs and cross docking fees in excess of $12m”.

Going further, PKDC asserts that while the carrier refused carriage under the contract, the same cargo found itself on CMA CGM vessels after it procured space at a higher rate.

“[CMA CGM’s] unreasonable practice of refusing space under the contract was a concerted effort to take advantage of extraordinarily high spot rates by refusing to comply with its contract in favour of shippers willing to pay a higher price than in [the contract]”.

The furniture maker also alleges that in June 2021 it received an email from CMA CGM stating that while the French carrier could accept its cargo, there would be an additional cost.

PKDC claimed it was told by CMA CGM that it would only be able to meet its contracted allocation to the shipper by rolling other shippers’ containers, which would merit a further charge.

Per the complaint, “‘we [CMA CGM] would need to remove someone else’s [cargo] in order to make this happen. The cost per container to do this would be $14,000,’ further demonstrating it would provide space for those willing to pay a premium.”

On the issue of D&D charging, the complaint notes that while such costs are intended to promote “fluidity” in cargo flows, this did not appear to be the incentive.

Among the allegations were that between August and November 2022 it paid some $1m in D&D charges.

“The majority of the charges were assessed as a result of situations out of [our] control and therefore the charges did not serve the primary intended purpose of promotion of freight fluidity and were unreasonable,” it continues.

“[We and our] logistics providers routinely informed [CMA CGM] of the issues outside of our control leading to the assessment of charges.”

Citing examples PKDC notes correspondence between its logistics providers and CMA CGM stating “You [CMA CGM] have run out of reservations. What’s the plan?” as well as efforts to return empties being impeded by the carrier’s own lack of space.

Nor is this the only claim CMA CGM has found itself up against, with haulier Access One Transport seeking some $77,000 in damages after issues with returning empty boxes.