National Shipping Company HMM Sued in the US for 'Breach of Contract'

[Asia Economy Reporter Kim Min-young] HMM, the largest domestic national shipping company, has been sued in the United States for allegedly breaching a cargo transportation contract.

On the 23rd (local time), according to the U.S. Federal Maritime Commission (FMC), recently U.S. food importer MSRF filed a complaint with the FMC, claiming that HMM violated a long-term transportation contract by providing less cargo capacity than promised during 2021-2022.

In the period from May to December last year, MSRF was supposed to have access to 25 FEU containers (one 40-foot container per FEU) under the contract, but HMM only provided 9 FEU.

The shipper MSRF argued that due to this, they had to pay HMM the more expensive 'spot' rates under short-term irregular transportation contracts instead of the long-term contract rates to transport their cargo.

MSRF stated, "Because HMM violated the Shipping Act and breached the contract, we had to bear unreasonably high transportation costs and suffered damages exceeding 1 million dollars (approximately 1.34 billion KRW). HMM unfairly and unreasonably disrupted the globally stable maritime shipping industry."

The FMC announced that this lawsuit has been assigned to an administrative law judge. The first judicial decision is expected in August next year, with the final ruling scheduled for March 2024.

This content was produced with the assistance of AI translation services.