Carriers accused by two shippers’ associations of contract breaches

A joint letter to the Competition Directorate of the European Commission (EC) from, the European Freight Forwarders Association (CLECAT) and European Shippers’ Council (ESC) has claimed that carriers have breached long- and short-term contracts by charging higher than agreed prices for shipments. The claim came amidst a significant increase in Asia-Europe container spot rates.

The two associations alleged that the carriers’ behaviour was damaging growth in trade at a time of economic recession.

The complaints refer to a “violation of existing contracts, the establishment of unreasonable conditions concerning the acceptance of bookings and unilaterally setting rates far in excess of those agreed in contracts”.

CLECAT and ESC said that the consequences of carriers’ practices were being felt equally by small and big businesses alike in Europe. They claimed that retail, fashion, automotive, cosmetics and IT businesses were being impacted and that some businesses might be forced to close because of the higher costs of transport.

It is not only in the EU that carriers are voicing their objections to what they see as shoddy behaviour on the part of some carriers. Chinese regulators were reported to be undertaking an investigation of carrier pricing. In the US the Federal Maritime Commission has written to the World Shipping Council expressing concern that US export cargo was being refused in favour of carriers repositioning containers directly back to Asia, so that they can fulfil bookings that were offering a far higher profit. Lars Jensen of maritime consultant SeaIntelligence said that “what 2020 has done is to clearly exemplify that the whole contractual framework underpinning container shipping needs a reformation – it is neither suitable for shippers nor carriers when it comes to managing sudden changes in the supply chain