"fighting For Justice: Maritime Law Attorneys And Fire-related Injuries In Offshore Cases"

 "fighting For Justice: Maritime Law Attorneys And Fire-related Injuries In Offshore Cases" - Like the rest of the e-commerce world, Jacob Weiss was facing major problems getting his products - especially furniture - across the Pacific from factories in China.

It was April 2021, and the global supply chain was full of problems because of the pandemic. At the port in China, the common carrier of Mr. Weiss, Hamburg Süd, was refusing to accept some of its shipping containers at its contract rates, saying there was no room on its ships.

"fighting For Justice: Maritime Law Attorneys And Fire-related Injuries In Offshore Cases"

Complaints of this nature have become common, due to the shortage of containers and crippling traffic queues at the port. Many importers avoided disputes, fearing retaliation from exporters. But Mr. Weiss asked his lawyer to retract the threatening letter, demanding that Hamburg Süd "immediately honor" its contract while threatening to file a complaint with the Federal Maritime Commission.

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Here was a minnow picking a fight with a whale. The company of Mr. Weiss, OJ Commerce, has a standard size. Hamburg Süd is a subsidiary of Maersk, a publicly traded Danish corporation that is the world's second largest container shipping company, with annual revenues exceeding $61 billion.

The result of the letter was swift and decisive - although not in the way that Mr. Weiss aimed. Hamburg Süd suspended negotiations with his company regarding a new contract for next year.

The actions of Hamburg Süd, which Mr. Weiss describes them as retaliation for his anti-bullying decision, affirming the power of the carriers that dominate ocean travel, defying the Biden administration's promises to crack down on bad behavior.

The White House has singled out the largest ocean carriers — a key element of global trade — as the culprits in its narrative on inflation. "These companies have raised their prices by 1,000 percent," President Biden said when he visited the Port of Los Angeles in June.

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A few days later, the president signed into law the Shipping Reform Act of 2022, declaring that it would "end the shipping companies that take advantage of American families, farmers, ranchers and businesses."

US ports on the West Coast to be overwhelmed by container ships from Asia in 2021. Credit... Stella Kalinina of The New York Times

The move was aimed at increasing the enforcement powers of the Federal Maritime Commission, which polices the global container shipping industry to total operating profits of $270 billion this year, according to Drewry, a maritime research firm. . But the agency, which occupies two floors of a large office building in Washington, has a small staff and an annual budget of just $32 million.

Its chairman, Daniel B. Maffei, has admitted that his managers are overwhelmed, however, he has asked the customers of the ship to come forward and bring a case if they have complaints.

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"Deterrence is what it's all about," Mr. Maffei said in an interview in July. "We're a very small agency. We're never going to catch every incident."

Although commission flows have roughly tripled in recent months, OJ Commerce's experience provides a cautionary tale of what can happen when companies threaten to go public with shipping complaints.

After Hamburg Süd suspended negotiations on a new contract last year, OJ Commerce filed a complaint with the commission, seeking more than $22 million in damages. A decision is expected by the end of this year, but OJ Commerce has already endured a time-consuming and expensive court process. fighting with the service provider to hand over documents related to the case.

According to its complaint and subsequent amendments, OJ Commerce had a contract with Hamburg Süd that gave it the right to transport 200 shipping containers from ports in China and Vietnam to warehouses in Southern California over a one-year period.

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Daniel B. Maffei, who heads the Federal Shipping Commission, said he hopes the bad behavior will be stopped if importers file complaints.Credit... Ashley Gilbertson for The New York Times

Hamburg Süd would be paid about $1,800 to ship each 40-foot container, which contained most of the furniture and home goods that OJ Commerce would sell under its own brands. The carrier brought only 185. That forced OJ Commerce to pay inflated prices to close last-minute bookings for its extra containers.

The complaint alleges that Hamburg Süd refused OJ Commerce containers so that it could make money on higher shipping rates, selling the same space to other importers for 10 times the agreed price.

OJ Commerce says its dispute with Hamburg Süd undercut its fastest-growing division, which manufactures products in factories in Asia and ships them to the United States for sale.

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According to the complaint, Hamburg Süd's sales staff had dedicated months to negotiating a new contract that would begin in June 2021, guaranteeing OJ Commerce's transit of more than 4,000 containers from Asia to the United States in the following year. The carrier then revoked his offer and ended the conversation.

"We should not engage in any renegotiation with the customer in light of the possibility of a lawsuit," Juergen Pump, senior vice president at Hamburg Süd North America, wrote in an internal email that OJ Commerce obtained and submitted as part of its lawsuit in the ocean. . Commission. "I also wouldn't give them a chance under the existing contract."

In an interview, Mr. Maffei, the regulator, declined to discuss the specifics of OJ Commerce's allegations but said: "The clear intent of Congress, and my intent as well, is to come down as hard as possible on any kind of retaliation. It undermines the entire enforcement system."

In documents submitted in the commission process, OJ Commerce referred to an internal email dated April 29, 2021, from Kevin Li, a freight forwarding specialist in Hamburg Süd's sales department, to Mr. Pump, who at the time managed the company's North American division.

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"They are threatening us with liquidated damages against a position that we could not provide," Mr. Li wrote. "This is unfortunate and unacceptable, it would be dangerous to continue working with this account."

Mr. Li and Mr. Pump did not respond to messages seeking comment. Maersk declined to comment on allegations that it retaliated against OJ Commerce. In filings, the company said it complied with the terms of its contract with OJ Commerce.

In the 11 months since filing its lawsuit, OJ Commerce has sought access to historical price information maintained by Hamburg Süd and transaction records that could shed light on how much money the carrier made by selling its space to other carriers.

The administrative law judge assigned to the case, Erin M. Wirth, initiated a discovery phase where both sides could request records and depose witnesses, initially setting a deadline of July 29, 2022.

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He doubled the deadline, ordering Hamburg Süd to turn over records included in OJ Commerce's request. The carrier repeatedly ignored those orders, it announced in an August 31 order while threatening to impose sanctions.

The same order referred to OJ Commerce's complaint in which a witness that Hamburg Süd had produced confirmed that he had no knowledge of the issues in the case. Judge Wirth told the carrier to "identify appropriate witnesses" and schedule a deposition within seven days.

Hamburg Süd's legal tactics are indicative of the challenges American importers face when seeking justice at the maritime commission.

Judge Wirth is also evaluating a similar complaint filed last year by a Pennsylvania furniture company against Mediterranean Shipping. In that case, the service provider has refused to comply with the document requirements under the discovery process, claiming that criminal law in its home country of Switzerland prevents it from disclosing the requested information.

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Judge Wirth flatly rejected that argument. "Swiss authorities" advised "that their intervention is not required," he said in an order on July 29.

As Mediterranean Shipping continues to maintain that it cannot legally hand over the documents, Judge Wirth has threatened to issue a judgment against the company.

"An objection to such an issue will not be allowed and will only delay this case," he said in a Sept. 8 filing.

For OJ Business, the clock ran out on its discovery process last month, of course without the company receiving the evidence it was looking for.

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In the Sept. 30 order, Judge Wirth said it was "unclear" whether OJ Commerce had received the documents it requested, but ordered the company to determine the significance of the missing information in its summary of the case. A Maersk spokeswoman said the carrier produced multiple witnesses within the discovery deadline.

Mr. Maffei, the chairman of the maritime commission, said the declining balance of power between importers and shippers in the world indicated the need for the Maritime Reform Act, which would increase his agency's budget and allow for increased staffing.

Peter S. Goodman is a global economics journalist based in New York. He was previously a London-based European economic correspondent and national economic correspondent during the Great Recession. He has also worked at The Washington Post as the Shanghai bureau chief. Learn more about Peter S. Goodman

A version of this article appears in print on , Section B, Page 1 of the New York edition titled: How Cargo Giants Take Advantage of Supply Chain Problems. Reorder | Today's newspaper

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