FreightWavesEric Kulisch writes: 

A federal judge has ruled a $1.7 million shipping dispute between Kuehne + Nagel, the world’s largest air freight logistics provider, and oil field services giant Baker Hughes must be arbitrated, saying that the contract’s arbitration clause is enforceable under New York law.

Houston-based Baker Hughes sued for compensation after one of its shipments was seized by Brazilian customs authorities because the airline providing the physical transportation failed to provide proof of a pre departure security check.

The case highlights the complicated nature of international goods movement, which involves multiple parties that must closely coordinate cargo handoffs and information sharing. Having many parties — truckers, freight forwarders and customs brokers at origin and destination — adds an element of risk compared to having a single entity control the entire journey within its own network, as FedEx and UPS do.

In September 2020, Baker Hughes (NASDAQ: BKR) enlisted Kuehne + Nagel to ship equipment to Brazil under a contract the Switzerland-based logistics services provider had with the Global Shippers Association to provide air freight transport. The GSA consolidates the freight volumes of its members to obtain more favorable rates and contract terms…

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