News / Shippers claim major box lines 'acted together' to profit from the pandemic

Photo: Christian Horz, Dreamstime.com

Global container lines may be facing fines, and compensation payments of more than $75m, after the filing of two claims at the US Federal Maritime Commission (FMC).

The first, lodged by shipper Euromarket Designs, claims Apex Maritime, China United, CMA CGM, Cosco, Evergreen, HMM, Maersk, MSC, ONE and Wan Hai used “coordinated and/or parallel activity” to keep rates high during the pandemic.

And, hot on its heels, shipper NBG Home has lodged a similar complaint against Evergreen, Italia Marittima, ONE, OOCL and Yang Ming, claiming the same behaviour.

NBG’s filing says: “Ocean freight industry experts noted that, during the pandemic, respondents and other ocean carriers engaged in concerted, coordinated and/or parallel activity to restrict capacity in order to avoid taking volume from one another and to keep prices high.”

Both filings allege these parallel operations included “assessing increasing premium prices and surcharges” and not meeting contracted minimum quantity commitments, forcing customers onto “the much more lucrative spot market (in which they themselves were participating)”.

The shippers also claim the carriers “simultaneously cancelled scheduled voyages under the guise of demand uncertainty”.

Between May and August 2020, the 2M, Ocean and THE alliance members voided 126 scheduled sailings between Asia and North America, and a further 94 between Asia and Europe, according to the filings.

Alongside blankings, they also note the named carriers’ “simultaneous unilateral” imposition of surcharges and “harmful” detention and demurrage fees – a subject The Loadstar has covered in detail.

Pointing out the surging carrier profitability at the time – Evergreen’s profit grew 10-fold between 2020 and 2021, for example – Euromarket claims this came about “at the direct expense” of US businesses and consumers and allowed the named carriers to increase market share through acquisitions of other large shipping lines.

Neither filing states the amount of compensation claimed, but NBG’s notes that the alleged carrier failure to honour service commitments saw the shipper pay an additional $46.5m in costs and “resulted in lost profits and other business damages”. Euromarket claims it paid out $30m more than it had expected under its contractual deals.