China United Lines is looking to Amazon for more than $96m in compensation, via a claim filed with the US Federal Maritime Commission (FMC).
It is accusing the ecommerce behemoth of wrongful termination and failing to meet its agreed minimum quantity commitments (MQC).
The claim dwarfs the largest so far sought through the FMC, beating now bankrupt Bed, Bath, and Beyond’s $32m claim against OOCL for “unfair shipping practices”.
In its filing to the US regulator, CU Lines claims it entered into a two-year agreement with Amazon in April 2022, offering favourable rates in exchange for guarantees of an unspecified MQC, the contract permitting ‘termination for convenience’ with 90 days’ notice.
One year into the agreement Amazon issued one month’s notice that it would terminate the agreement, citing “convenience”, just as rates began to fall.
While Amazon initially agreed to pay the contractually stipulated early termination penalty to CU Lines of some $31.5m – the carrier claims it reneged and sought to classify the termination as “for cause”, which the carrier calls a “pretext to avoid paying”.
The filing says Amazon “claimed China United had violated Section 7 of the MTA (Confidentiality), which refers to ‘unauthorised use and disclosure of confidential information’, because China United posted material on the social network WeChat, disclosing it was carrying cargo for Amazon”.
The carrier responded by saying its posts had followed “extensive” publishing by Amazon on WeChat, identifying the carrier as a “business partner”, and Amazon’s posts had also provided details about the commercial relationship between the pair, including pricing and scheduling.
“China United’s posts do not reveal any confidential information, as defined in the NDA and service contract,” the claim adds.
“Due to Amazon’s own July 4, August 9, and December 9, 2022, public disclosures through WeChat posts and press contacts, all such information had lawfully entered the public domain and was no longer ‘confidential’ within the meaning of the NDA or service contract”, claims the filing.
The carrier is claiming a total of $96,419,259 from Amazon, which includes the unpaid early termination penalty and a sum amounting to the difference between the cheaper contract freight rates and actual freight rates for the Amazon shipments carried during the period the agreement was in force.
Source: https://theloadstar.com/amazon-hit-with-96m-compensation-claim-by-china-united-lines/?mod
