MSC challenges shipper complaint to FMC

Shipping line MSC Mediterranean Shipping Company has issued a statement denying claims made by a shipper in a formal complaint filed to the U.S. Federal Maritime Commission (FMC) this week.

MCS Industries Inc, a Pennsylvania-based home furnishings manufacturer, filed its complaint against MSC and COSCO Shipping Lines (COSCO), claiming the two companies violated the Shipping Act of 1984 by refusing to honour written service contracts.

The MCS complaint said, “Since the beginning of the Covid-19 pandemic, global ocean carriers…unjustly and unreasonably exploited customers, vastly increasing their profitability at the expense of shippers and the U.S. public generally, which bears increased freight cost in the form of inflation.”

Specifically, MCS claimed that COSCO and MSC “refused to provide more than a fraction of the cargo capacity that MCS requested and needs”, despite the fact that they have continued to operate at or near pre-pandemic
capacity. This then forced MCS to find alternate capacity on the spot market at inflated prices, it said.

MCS also suggested in its complaint that the shipping lines are colluding and profiteering. “Ocean carriage costs on the spot market have risen to crisis levels, threatening shippers’ businesses and generating price inflation to support massive windfalls for the carriers at the expense of the public. This conduct is unjust, unreasonable, and unlawful” the complaint alleged.

In its response MSC said it is “shocked to learn of the accusations made by MCS Industries”, and that it had not received a formal complaint from the shipper.

The shipping line went on to say it “does not recognize the alleged shortcomings in booking the cargo allocations provided for this shipper,” and denied it is illegitimately selling space allotted to MCS Industries under its service contracts to other shippers.

MSC also rejected the accusation of collusion on the basis that it and COSCO are not in the same container-carrying alliance and as such have no operational cooperation by way of Vessel Sharing Agreement (VSA) or Slot Charter Agreement (SCA) anywhere in the world.