News / US shipper accuses DSV of $900,000 'overbilling' amid contracts row

04/09/2023

The US Federal Maritime Commission (FMC) is investigating efforts by DSV to unilaterally block termination rights and impose charges totalling $900,000 on one of its shippers.

Electronics manufacturer Hubbell entered a negotiated service arrangement (NSA) with DSV in April last year for Asia-US services, but claimed that, “almost immediately”, the NVOCC sought to change the agreement’s terms, citing “unspecified FMC concerns” that required changes to the wording of the document.

“DSV’s multiple proposed drafts actually sought material and substantive changes well beyond regulatory issues,” the complaint alleges.

“It became apparent DSV’s real concern was with Hubbell’s right to terminate the three-year arrangement by giving 90-days’ written notice. Hubbell became increasingly concerned with DSV’s performance and billing, including $900,000 of overbilled and/or improper charges.”

According to the FMC docket, DSV opted not to provide signed copies of the original NSA, instead sending a series of revised versions between June and September last year.

Despite having informed Hubbell that changes were purely to ensure FMC compliance, the received documents included “substantive changes” that altered the terms of the NSA “to Hubbell’s detriment”, relating to billing practices.

On 15 September, DSV North America business development manager Trevor Shuman emailed a revised NSA, saying it “will no longer need an amended signature” from Hubbell.

In the contract stand-off, Hubbell found itself “overcharged to the tune of $900,000” as DSV booked shipments under higher spot rates than those agreed within the NSA. Consequently it opted, under provisions of both the signed NSA and the framework Master Service Agreement (MSA), to provide notice of termination on 6 December.

DSV did not respond until 28 March, three weeks after termination took effect. It filed a complaint in Delaware claiming Hubbell “wrongfully stopped booking shipments” after the termination, leaving DSV “$2.5m out of pocket”.

Subsequently, Hubbell issued its FMC complaint, claiming the Shipping Act prohibited “DSV’s pattern, practice and determination to not provide service in accordance with NSAs”.