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FMC Approves Yang Ming Service Contract Complaint Settlement with Shipper

The Loadstar
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August 24, 2022

By Maia Kemp-Welch (The Loadstar) –

The US Federal Maritime Commission (FMC) has approved the decision to settle a complaint against Yang Ming by Achim Importing Co out of court.

The claim against Yang Ming has been “dismissed with prejudice”, said FMC documents released on Monday.

The details of the settlement have not been disclosed and The Loadstar contacted Yang Ming for comment but had not received a response by the time it went to press.

The initial complaint, filed in March, was regarding an alleged breach of the minimum quantity commitment (MQC) of a service contract. Service contracts allow shippers to ensure they will have sufficient freight capacity available.

It was claimed by Achim, a New York-based furnishings company, that instead of honouring the pricing and MQC commitment in its service contract, Yang Ming systematically favoured other shippers, including spot market purchasers willing to pay higher rates.

The one-year contract agreed between Yang Ming and Achim in May 2020 granted Achim 200 teu of capacity on Yang Ming’s vessels. However, it was alleged by Achim that only 31 teu was made available within the agreed time. As a result, Achim had to obtain space for its cargo on the spot market instead, costing the firm over $1.3m.

Achim argued that this breach of contract by Yang Ming was “a knowing and deliberate attempt to manipulate market pricing”.

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