Marine Online - COSCO joins the battle against MCS Industries

COSCO joins the battle against MCS Industries

News | Published Thursday, September 2, 2021 11:21 AM
Reported by MARINE ONLINE


It is now 2 mega shipowners fighting MCS’ allegations about shipping malpractices

Early August, US Federal Maritime Commission (FMC) commenced investigations against 8 mega-shipowners for their alleged misconduct. Mediterranean Shipping Company (MSC) hit back at the allegations, and China Ocean Shipping Company Limited (COSCO) also responded to the claims.

Crossfires intensify

Big cargo owner, MCS did not hold back in its string of allegations against shipowners for unethical profiteering practices, collusive behaviour and violation of the U.S. Shipping Act. It went as far as to claim several carriers refused to negotiate, adding those who did (including COSCO and MSC) refused to provide more than a fraction of the cargo capacity that MCS requested.

In its list of grievances, MCS alleged both carriers adjusted their practices in a seemingly coordinated fashion and deprived the cargo owner of its contractually agreed space allotments, and instead sold their respective capacities. That included space prior allocated to MCS under service contracts and subsequently withdrawn, offered to the highest bidder on spot market to which their conduct has forced MCS to turn. MCS also alleged that from May to July 2021, MSC provided only 35 per cent of the space required under the contracts and COSCO provided only 1.6 per cent.

Naturally, both carriers were ready to counter with various representations. Notably, COSCO implied possible perjury by MCS in media and through inaccurate statement of facts. COSCO defended, “MCS did not confirm any bookings in June 2021 at any original ports customarily used by MCS to present its containers for carriage. It even failed to utilise all space offered and confirmed to MCS in July 2021. MCS signed a contract that runs from 1 January 2021 to 30 April 2022, for 500 TEUs. We have carried 92 TEUs for MCS through August. With 8 months left in the contract, it contained neither monthly nor quarterly carriage requirements.”

MCS’ dispute will certainly be a long process however valid its concerns are. Despite that, the industry is unlikely to be bifurcated. The FMC is said to be making its initial decision by 3 August 2022, and its final decision on 17 February 2023.

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