US importer claims Evergreen refused contracted space

Another US importer has complained to the Federal Maritime Commission (FMC) that another global shipping company breached contracts during the period when the cost of container carrying shot sky-high in late 2020 and through 2021.

CertiFit, an importer of after-market auto body parts from Asia, CertiFit, is seeking compensation from Taiwan-based Evergreen for what CertiFit claims were violations of the US Shipping Act of 1984. The complaint alleges that carriers “unjustly and unreasonably exploited customers by substantially increasing their profits at the expense of shippers.”

The complainant further claimed that Evergreen systematically failed to meet its quantity commitments under its service contract, and that it was forced into the extremely expensive spot market. Certifit additionally alleges that it received a lower level of service on its shipments. The FMC has received a number of complaints of this type, against a number of carriers.

CertiFit claimed that Evergreen’s actions were “knowing and deliberate” and that they were not due to a lack of available space. Indeed CertiFit claimed that, after securing space on the spot market, some of its containers subsequently travelled on Evergreen ships. CertFit said that this demonstrated “that the respondent did, in fact, have capacity to carry the complainant’s containers pursuant to its service contract.”

CertiFit said that from April 2020 to April 2021 it had a service contract for 445 40ft boxes (denominated as 1,000 teus) to be transported primarily from Taiwan, as well as Hong Kong, China, and South Korea, with a destination of either Salt Lake City, Utah or Memphis, Tennessee. CertiFit claims that during that time Evergreen transported just 35% of the contracted volume.

The complaint says that Evergreen refused to accept loaded shipping containers in Asia under the service contract. CertiFit also claimed that Evergreen failed to provide empty containers in Asia for loading.

CertiFit also said that, under the spot-market agreements it was forced to adopt, loaded shipping containers would only be delivered to the nearest railyard, rather than to the company’s facilities, and that this resulted in an additional cost of drayage trucking, as well as providing less time for unloading and returning containers before daily D&D charges began to accrue.

CertiFit asserts that it suffered at least $750,000 in losses. It is seeking reparations as well as an order to preclude Evergreen from refusing to provide CertiFit with its allotted space at the rates agreed upon in future service contracts.

The complaint was filed on May 4th. It was served to Evergreen last week. Evergreen has 25 days to respond. An Evergreen spokesman said that Evergreen’s US legal team was preparing a response to the claims, and that this would be released in due course.