Chinese Forwarder Delayed Containers, Violated Shipping Laws, US Company Tells FMC
A Chinese freight forwarder illegally tried to change the terms of its signed service contract with a U.S. distributor and purposefully delayed 20 container shipments so it could submit higher detention and demurrage invoices, the American company said in a complaint this month to the Federal Maritime Commission. Indiana distributor Way Interglobal also said China-based Shenzhen Unifelix, a von-vessel operating common carrier, “improperly” disclosed Way’s financial information to Shenzhen’s vendors to try to force Way into agreeing to a new contract.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Way said it first entered into a contract in March with Unifelix for it to handle container shipments, which included component parts from a Chinese supplier used to assemble “recreational vehicles” in the U.S. Although the contract stated Way would pay all shipping, rail and drayage charges after the containers were delivered to the distributor’s Indiana warehouse, Unifelix reneged on those terms shortly after service began, Way said. The Chinese carrier “failed to properly support its invoices for services” by submitting “exorbitant charges” and “sought to unilaterally change the terms of the Service Contract” by demanding advance payment for freight and other expenses, Way said.
After Way “refused” to pay the charges, Unifelix began to “cause delays” to the containers and “failed to provide releases, timely pick-up notices, and other failures,” the complaint said, causing demurrage fees to accumulate, Way said. Unifelix also disclosed Way’s financial information to vendors and “others” to try to “coerce” the distributor into a new contract, the U.S. company said.
Unifelix also delayed in telling Way that its containers were ready to be picked up and “falsely” said it had already told the company. This led to more demurrage charges, the complaint said, and Unifelix again “demanded” payment for all shipping freight charges before releasing the containers from a Chicago rail yard. Unifelix also said the charges didn’t include ocean freight charges.
Way said the containers remain at the Chicago rail yard accruing detention and demurrage charges. The company said it has been hit with more than $1 million in damages from unpaid freight, invoiced demurrage, pending demurrage for freight not yet invoiced, internal time and “financial consequences from adverse impacts to supplier relationships.”
Way said Unifelix’s actions constitute “unreasonable refusal to deal or negotiate with WAY” and violate the Shipping Act. The FMC should order Unifelix to pay “reparations” for its “unlawful conduct, along with interest, and “any other amounts that the Commission deems appropriate.” Unifelix didn’t immediately respond to a request for comment.