News / Dollar General submits $14.7m claim against Yang Ming over capacity shortfall

Pandemic-era greed appears to be coming back to bite container lines on the backside, with the second largest claim lodged against a single carrier by a single shipper, filed with the US Federal Maritime Commission (FMC) this week.

The news comes less than a fortnight on from Ocean Network Express (ONE) finding itself on the hook for a combined $18.1m after Cornerstone Brands and QVC teamed up against the carrier for failing to meet even half of its contractually agreed volumes.

No stranger to the FMC, having been chased by a food shipper back in 2022 shortly after US legislative reform made it easier to seek claims, Yang Ming is now facing a $14.7m suit from discount retailer Dollar General for failing to meet minimum capacity commitments.

“Yang Ming’s failure to meet its service commitment under the contract with complainant began immediately after the contract went into effect. Yang Ming substantially constrained the space it made available to complainant,” Dollar General’s filing claims.

“The massive shortfalls to BCOs were accompanied by overperformance for Yang Ming’s NVOCC customers – a situation in which Yang Ming was telling BCOs there was no space but then selling the same space, through an NVOCC, to the BCOs at much higher prices.”

At one point, the carrier provided a mere 24% of the contracted space, with the complaint noting the shortfall was “even more extraordinary” given that in this particular instance Yang Ming had agreed to “provide weekly space at a level not less than 130%”.

Over a 14-week forecasting period between August and October 2021, in which Yang Ming agreed to the 130% commitment, it fell short 11 times, amounting to a cumulative shortfall of some 414 feus.

“Yang Ming’s representatives offered shifting explanations, initially claiming unavailability of space due to congestion and blank sailings, but later admitting that the lack of cargo space allocation was coming from Yang Ming’s headquarters,” the filing continues.

Noting that the company’s US-based representatives had expressed serious frustration with the wider leadership, the filing claims they nonetheless told Dollar General’s management that “their hands were tied”.

Having committed to 2,226 feu over the course of the year-long contract, after 12 months the Taipei-based carrier ended up carrying somewhere in the region of 616 feu, equating to a 73% short-fall on agreed volumes.

“Yang Ming’s approximate 1,610-feu shortfall forced us to seek carriage from other sources at higher rates, or else forgo shipments entirely. As a result, based on average amounts paid, [we have] been damaged by at least $14.77m,” the complaint added.

While less than half the $32m plus sought by Bed, Bath and Beyond’s administrators from OOCL, this becomes the second biggest single claim through the FMC since the passage of the bipartisan Ocean and Shipping Reform Act (OSRA) in mid-2022.

Since OSRA passed three years ago, the FMC has heard some 50 cases against container lines and logistics companies accused of violating the act, with the amount of money cumulatively now surpassing the $100m mark.