Supply Chain disruption at the time of Covid and the opportunities taken by mainstream container shipping companies have come to a point of legal litigation as these carriers took advantage of this unfortunate situation and profited in billions of dollars.
OJ Commerce, LLC an e-commerce retailer that sells dropship products from domestic inventory of hundreds of brands. They import goods from Asia and Brazil and fulfil the supply chain needs of their end customers. They had a contract with Maersk Line with a space and price commitment of 10 TEU/week but Maersk’s failure to provide space as promised led them to move shipments on spot rates resulting in losses.
In the view of this breach of contract OJ Commerce, LLC filed a case against Maersk before the Federal Maritime Commission stating Maersk promised that the tender of cargo under the contract shall be reasonably spaced throughout the term, but they failed, and they further refused to fulfil the existing contractual obligations.
The FMC case document has mentioned that Maersk retaliated against OJC Commerce and sent internal orders to disengage on renewal of the contract. The decision to cut off OJC was made in retaliation for sending its threat of an FMC complaint.
Therefore, Maersk retaliated against OJC in two ways explicitly prohibited by the Shipping Act: A common carrier, either alone or in conjunction with any other person, directly or indirectly, may not retaliate against a shipper by refusing, or threatening to refuse, cargo space accommodations when available, or resort to other unfair or unjustly discriminatory methods because the shipper has patronized another carrier, or has filed a complaint, or for any other reason.
As Maersk had its internal compliance training on the Shipping Act, Maersk knew that an FMC complaint was not a legitimate reason to refuse to deal or negotiate with the customer they further chose to retaliate against OJC. As a result, OJC was forced to mitigate its losses and book limited space on high prices of spot market rates which were too expensive to justify the cost of container freight.
Maersk gave seven pretexts in an attempt to justify its illegal actions, The decision was based in part on
OJC’s relatively low volume commitment,
OJC’s lack of cargo volume in other trade lanes,
the availability of space in the Transpacific trade,
the rate levels sought by OJC,
Maersk past experience with the timeliness of OJC’s payment and the perceived credit risk associated with that payment history, and
the fact that OJC did not purchase ancillary services from Maersk.
OJC’s disputatious manner of doing business and its repeated and excessive threats to pursue litigation against Maersk, which threats were disproportionate to the issues between the parties and also disregarded the dispute resolution procedures and remedies for breach of contract set forth in the service contract between the parties.
Each of Maersk’s pretexts were addressed and FMC has noted that because even when the shipper is admittedly in the right, the carriers still retaliate, without remorse or fear of consequence.
The Federal Maritime Commission concluded in its report that this case is not complicated. Indeed, Maersk’s own documents and words make it clear that its violations of the Shipping Act were knowing and intentional, and the damage that they caused to OJC was massive. If OJC is not fully compensated for the damages inflicted on its business, Maersk will only be further emboldened – even encouraged – to retaliate against shippers, which the FMC has publicly stated it will not tolerate.
These were the brief findings of fact, and the case is still in legal disputes as Maersk chose improper motivation in litigating this case,
In the view of an increase numbers of such cases where all top line carriers have shown the same distorted approach in the process of global supply chain the Ocean Shipping Reform Act of 2022 by the U.S. The OSRA was formed to ensure industry players have the right incentives and that all stakeholders in the ocean freight transportation system can have a voice, said Commissioner Daniel B. Maffei at U.S. Federal Maritime Commission.
Wan Hai Lines establishes its new office in India. Image: Unsplash
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Aiming to further enhance service quality and gain a stronger foothold in the Indian sub-continent, Wan Hai Lines has established its India new office in Kolkata in July 2023. Contact details for the new office are as follows: WAN HAI LINES (INDIA) PVT. LTD 3rd Floor, Block C, Apeejay House, 15 Park Street, Kolkata, West Bengal, 700016 TEL: 91-33-4450 4500 According to the 2023 Foreign Trade Policy announced by the Indian Ministry of Commerce and Industry, India’s export trade volume will reach 2 trillion US dollars in 2030.
Therefore, benefiting from government policy incentives and the shifting trend of the global supply chain, India’s status in global manufacturing and international trade is increasing, which is conducive to maintaining long-term high economic growth. And the proportion of global exports has increased significantly. In addition, the continuous economic stimulus policy will help revitalize the domestic economy, and domestic demand is expected to increase significantly. Therefore, Wan Hai is optimistic about India’s future import and export situation. And also through the establishment of a new office to improve the overall operating efficiency.
Wan Hai India Kolkata office held a grand opening reception in the evening of 27th July. During the banquet, there were many important customers & guests. The Kolkata Port Authority, Kolkata terminal operators, feeder operators and important local customers were invited to send representatives to attend the meeting to express their blessings to Wan Hai’s opening of the Kolkata market. At present, Wan Hai has six owned offices in India, namely Mumbai, Chennai, Mundra, and Vizag, Delhi and the sixth office Kolkata office. In addition to directly providing river port services, it will also simultaneously strengthen service links between India and neighboring countries, such as Nepal and Bhutan. It is expected to pursue customer first through continuous expansion in the future and sustainable business philosophy.
World's Largest Container Ship, MSC MICHEL CAPPELLINI. Image: MSC
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More than 800 guests gathered in a custom-made tent at the MSC Gate Terminal in Bremerhaven to witness the naming ceremony of the latest edition to Mediterranean Shipping Company’s fleet, MSC MICHEL CAPPELLINI, with the ship as the backdrop. Prior to the naming ceremony, MSC signed a Memorandum of Understanding with the Free and Hanseatic Cities of Bremen and Hamburg and their ports, agreeing on the use of shore power for MSC’s vessels in both ports.
MSC MICHEL CAPPELLINI is one of the world’s largest and most fuel-efficient container ships by design. At 400 metres in length and with a 61.5 metre beam, it has a capacity of up to 24,346 TEUs. Despite her magnificent size, her design and technical specifications enable the shipment of more cargo at the lowest carbon footprint per container carried.
The vessel employs a small bulbous bow, large diameter propellers and energy-saving ducts, which will help to further reduce fuel consumption and associated greenhouse gas emissions.
MSC MICHEL CAPPELLINI and her sister ships are also built with an air lubrication system to reduce drag on the hull, as well as shaft generators to yield additional power.
In his welcome speech, MSC CEO Soren Toft highlighted the importance of Bremerhaven to MSC as a European cargo hub: “The ports in Bremen are such an important cargo hub for us in Germany and in Northwest Europe. It is truly a strategic location for MSC, and home to over 370 of our colleagues. However, our connection with Germany goes deeper than trade. This is the third naming ceremony of an MSC vessel since 2015, and the second in Bremerhaven. It is therefore by no surprise that we continue to grow with our customers in Germany.”
Soren continued: “Efficiency and innovation are two drivers that led to the development of the MSC MICHEL CAPPELLINI. Through innovation we seek to shift the boundaries of what is possible and surpass our own industry-breaking milestones, a process of continuous evolution. Both, as a family company and as the leader of our industry, we are very mindful of MSC’s key role in decarbonizing the logistics value chain, and the benchmark we set for others in our industry.”
MSC Germany Managing Director Nils Kahn also highlighted the importance of the ports of Bremen as an MSC location: “We handle more than 1 Mio TEU per year here and run dedicated trains to and from many domestic locations. We are connecting the world from exactly this location with a weekly service to the Eastern Mediterranean, two weekly services to the Far East, three weekly services to South America and Mexico and an impressive five weekly services to North America.”
The ship’s blessing was conducted by Provost Dr. Bernhard Stecker, who has led the Catholic Community Association Bremen since 2019 and is the head of the Catholic Office in Bremen, the liaison office of the Catholic Church to the Bremen Senate and the Bremen Parliament in the state. After the blessing, Godmother Cindy-Jo Cappellini performed the christening of the ship by cutting the ribbon and smashing a bottle of champagne against the hull.
Yellow confetti streamed down, the ship’s horns sounded and MSC MICHEL CAPPELLINI can now travel the world’s oceans.
Memorandum of Understanding on Shore Power Infrastructure
Shortly before the naming ceremony started, Kai Stuehrenberg, State Secretary for Economic Affairs of the Free Hanseatic City of Bremen, Andreas Dressel, Senator for Finance of the Free and Hanseatic City of Hamburg and MSC CEO Soren Toft met for the signing of a Memorandum of Understanding (MoU) agreeing on the use of shore power for MSC container vessels in both ports.
Soren Toft said: “I am particularly proud that we signed a Memorandum of Understanding between MSC, the Free and Hanseatic Cities of Bremen and Hamburg, and their port administrations, to partner and collaborate on the implementation of shore power taking us one step closer to ensuring a decarbonized supply chain for global trade.”
MSC Germany Managing Director Nils Kahn also called on German authorities in Berlin to ensure closer collaboration between German ports on the topic of infrastructure development, citing the MoU signed between MSC and the port authorities as an example of what private-public partnership means for MSC.
Additional speeches were given by Kai Stuehrenberg, State Secretary for Economic Affairs of the Free Hanseatic City of Bremen, Andreas Dressel, Senator for Finance of the Free and Hanseatic City of Hamburg.
The Naming Ceremony
The ceremony was a celebration, highlighting MSC’s commitment to sustainability, sports and the arts. It was moderated by German TV presenter, Jule Gölsdorf. She introduced Boris Herrmann, Germany’s leading yachtsman, world record holder and skipper of sailing team Team Malizia. Boris Herrmann shared his experience from the recent Ocean Race. MSC is a sponsor of Team Malizia and one of the six Official Founding Partners. In front of the 800-guest crowd Boris expressed his gratitude for MSC’s sponsorship and dedication to net zero commitments.
Guests included representatives of local authorities and businesses, customers and journalists. They enjoyed a spectacular performance by Andrea Casta, the famous Italian crossover electric violinist, and Sarah Voss, Germany’s artistic gymnast, all-around national champion and bronze medal winner in the team competition at the 2022 European Championships. The live music and the acrobatic gymnastic performance expressed the very concept of balance between progress and sustainability, humans and nature, present and past.
MSC CEO Soren Toft concluded: “Global trade is crucial for maintaining peace, economic development and growth, and we are serving as a neutral force in the face of the political and diplomatic adversity we see today. Our new 24,000 TEUs-class ships, some of the world’s largest currently on the water, are essential for facilitating and enabling effective global trade. Ultimately connecting cultures, people and continents.“
ONE announces FLX, a new service for South American reefer shipments. Image: ONE
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Ocean Network Express Pte. Ltd. announces FLX, a new service connecting the West Coast of South America to the East Coast of North America. The service is set to launch in September 2023. With an emphasis on innovative and efficient transportation solutions, FLX caters to customers looking for reliable South American reefer container shipments.
Flavorful South American Delights Reach New Shores
Many Latin American fruits, vegetables and seafood, such as mangoes, asparagus, shrimp, have been gaining popularity worldwide. As a result, Latin American reefer container transportation has seen a remarkable growth, nearly doubling over the past few years.
Strengthening Our Commitment to South America and Reefer Services
With our reefer services, we have established ourselves as a significant player on the Latin America-Asia route, for which we have earned praise from our customers over the years. To further improve the quality of our transportation services, we are redoubling our efforts by investing in state-of-the-art equipment, including Control Atmosphere (CA) containers and telematics devices.
Unveiling FLX: Expanding New Horizons for Shipments
FLX provides exclusive service, connecting the South America West Coast to the North America East Coast (Florida) with our own dedicated fleet of vessels. The service aims to offer fresh options to our valued customers, including those previously engaged in Asia-bound shipments, while expanding shipping possibilities and streamlining supply chain processes. FLX will launch in September 2023 in preparation for the harvest and shipping season.
Service Details
The FLX service will deploy four vessels in order to ensure schedule stability. This service will connect Callao and Paita (Peru), and Guayaquil (Ecuador) to South Florida with one of the fastest transit times on the market. With excellent options for the transportation of refrigerated cargo, the direct routes include Callao-South Florida in 11 days, Paita-South Florida in 9 days, and Guayaquil-South Florida in 8 days.
Furthermore, FLX provides a direct connection from South Florida to Honduras, in addition to destinations in Colombia, Ecuador and Peru. With hub ports like Cartagena (Colombia) and Callao (Peru), ONE services can be seamlessly connected with other services to/from the United States, East Coast South America, Europe, Caribbean and Asia.
Chilean exporters can also conveniently connect their cargoes via Callao, adding to the route’s accessibility. In summary, the FLX route offers multiple connection options:
Callao – Paita – Guayaquil – Cartagena – South Florida – Puerto Cortés – Cartagena – Callao.
Yu Kurimoto, Managing Director of ONE said, “We aim to share South America’s distinctive flavors with people across the globe. With our FLX and LUX services, we are excited to open new doors for businesses and individuals, enabling them to enjoy the authentic tastes of this vibrant region.”
