Cosco settles case brought by American furniture shipper

MCS Industries has reached a swift settlement with China’s Cosco Shipping Lines, but has yet to resolve its differences with Mediterranean Shipping Co (MSC).

At the end of July, MCS, an American furniture shipper, filed a $600,000 lawsuit with the Federal Maritime Commission (FMC) against MSC and Cosco, in which it claimed the carriers had repeatedly contravened terms of the US Shipping Act.

Pennsylvania-based MCS Industries, whose clients include Target, Walmart, Home Depot and Lowe’s, claimed carriers had “unjustly and unreasonably” exploited customers, and had colluded to manipulate the market.

“Global ocean carriers began taking parallel and strikingly similar actions to prop up ocean carriage pricing and improve their profitability at the expense of shippers and the public,” MCS maintained in its July filing, suggesting this collusion was made possible by the fact that there are now just three alliances that dominate more than 90% of the main east-west tradelanes.

Carriers had failed to stick to their contract commitments with MCS, the suit claimed, forcing the American company to ship more via the soaringly expensive spot market.

“These collusive ocean alliances give Respondents venue and opportunity to co-ordinate discriminatory practices such as those alleged herein to violate contracts with shippers like MCS in favour of exploiting profit opportunities on the spot market,” the suit alleged.

MCS is the US market leader for picture frames, poster frames, mirrors, wall décor, and architectural and decorative moldings for home construction and home improvement markets.

It has now emerged via the FMC that MCS has settled with Cosco. A seven-page document from the FMC states that the settlement agreementis intended to restore and reinforce the long-standing business relationship between the parties.

“As such, the Settlement Agreement is fair and reasonable, and reflects the Parties’ desire to resolve their issues without the need for costly and uncertain litigation,” the document states, adding that details of the settlement will remain confidential.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
Back to top button