US Importer Says Shipping Agent Acted as Carrier, Violated Shipping Act
U.S. Importer CertiFit continued to accuse Evergreen Shipping Agency of violating the Shipping Act, saying in a reply brief this week to the Federal Maritime Commission that Evergreen Shipping gave unreasonable preference to other shippers, unreasonably refused to deal or negotiate and failed to establish "just and reasonable practices" with its cargo. CertiFit also said the FMC has jurisdiction over the case because Evergreen Shipping is a common carrier, one of the main arguments disputed by Evergreen Shipping.
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CertiFit initially filed a complaint in May 2023 accusing Evergreen Shipping of "systematically failing to meet its commitments" as a carrier (see 2305080022). The complaint alleged that from April 2020 to April 2021, Evergreen Shipping failed to meet its minimum quality commitment (MQC) and "initiated a practice of systematically failing to meet its quantity commitments" to CertiFit, refusing to accept loaded shipping containers in Asia for transport to the U.S., and refused to provide empty containers for CertiFit to use. Evergreen Shipping disputed the accusations in a reply earlier this year, saying CertiFit "continues to rely merely on conspiratorial innuendo and halftruths, not evidence."
It also argued it’s not a common carrier, ocean transportation intermediary or terminal operator and does not "take responsibility for cargo transportation or storage, or make use of ocean-going vessels," which means it's not subject to the Shipping Act. Instead, Evergreen Shipping said, it's an agent for the carrier Evergreen Line.
But according to CertiFit, though an agent for a "disclosed principal" is not liable to the third party if the principal breaches the contract, an agent may be held liable if "it acted outside the scope of its agency," if "it acted fraudulently" or if "it clearly manifested its intention to bind itself instead of, or in addition to, its principal."
CertiFit said that Evergreen Shipping "clearly manifested its intention to bind itself instead of, or in addition to," what its principal was doing. Every act CertiFit complained of centered on Evergreen Shipping's actions, and it made the decision to suspend CertiFit's bookings until a proposed amendment to reduce the MQC from 1,000 20-foot equivalent units (TEUs) to 25 TEUs, and add the Port of Taipei to its contract, was adopted, the importer said.
CertiFIt also argued that Evergreen Shipping is a common carrier because it provides transportation by water for cargo between the U.S. and another country, assumes responsibility for transporting the cargo, and operates as a vessel between a U.S. and a foreign port.
Evergreen Shipping also argued that the FMC doesn't have jurisdiction over the alleged shipping violations because it didn't breach the contract between CertiFit and Evergreen Shipping and that the importer failed to "avail itself" of the "remedies" provided. But CertiFit said that it elected to exercise remedies provided in the contract for additional sailings but instead was given an amendment to lower the MQC. CertiFit tried again to get more sailings but said it was ignored.
"The foregoing facts demonstrate that CertiFit did attempt to avail itself of the contractual remedies, but" Evergreen Shipping's "unreasonable course of action following the request was nothing more than protecting its own interests -- in bad faith," the importer said. "In the end, it was Evergreen Shipping that failed to meet the agreed upon MQC and then attempted to bait and switch CertiFit into signing a termination agreement and amendment which would diminish any possibility of obtaining additional sailings as provided for in the Contract."
Evergreen Shipping didn't respond to our request for comment.