Importers Allege Fresh Del Monte’s Shipping Discriminated Against Customers
A group of Ecuadorian export produce companies and their U.S. importers filed a complaint with the Federal Maritime Commission (FMC) alleging “unfair or unjust discriminatory practices” from their carrier resulting in more than $2 million in damages and costs under their 2021-2022 freight contracts. The four exporters and two importers filed a joint complaint against Network Shipping (NWS), Fresh Del Monte’s ocean logistics arm, which offered third-party shipping services aboard Fresh Del Monte’s vessels.
The complaint, which was served on August 3, highlights that as a common carrier, “NWS is prohibited by the Shipping Act of 1984 from providing such preferential treatment to one customer to the detriment of others.” After seeking compensation from NWS, the two importers, Coast Citrus Distributors and Amazon Produce Network, both based in the U.S., along with the exporters Refin Tropicals, JW Fresh, Bresson, and Sembrios de Exportacion Sembriexport, all of Ecuador, are asking for relief as the FMC deems just and proper.
Two of the companies, Refin and Sembriexpor, entered into shipping contracts with NWS running between September 2021 and January 2022 during the season for fresh mangos from Ecuador. They contracted for reefers to be transported to the Port of Hueneme in California.
The companies acknowledge that Fresh Del Monte is a competitor of the complainants. However, Fresh Del Monte highlighted in 2022 its practice of optimizing cargo space on Fresh Del Monte’s 13 owned vessels, including six new fully cellular reefer box ships, by offering tailored shipping solutions to a broader audience. Among their marketing proposition, they highlighted as being involved in cold storage shipments they understand the “market pain points customers go through.”
Network Shipping responded to The Maritime Executive saying that it believes the complaint is "without merit." The company said it plans to "defend itself vigorously" as it proceeds through the complaint process established by the FMC.
The case centers on the availability of truck chassis during the surge in container volumes, an issue that many shippers complained about broadly among the industry. The complaint filed by the Ecuadorian exports states that customarily, when their containers arrived, NWS would unload them from the vessel to the terminal and mount them on the truck chassis. NWS provided the chassis and the importers would contract with the truckers to pick up the mounted reefers and deliver them to customers.
Starting in November 2021, they contend that all the available chassis were being allocated to containers delivered by Del Monte to “the detriment of other NWS customers.” The reefer shipments were reaching the port on schedule, but truckers working for the importers said they would be told when they arrived at the port that no chassis were available or that the cargo was not ready. The complaint says 108 containers remained at the port for 10 or more days, with some remaining for over 50 days, leading to the spoliation of fruit.
They argue that the complainants had a “reasonable expectation that NWS would provide chassis,” in a timely fashion, and did not receive adequate prior notice that NWS would not have chassis available. At the same time, they contend, “NWS provided chassis for containers delivered on the same vessels for its parent company Del Monte.”
The importers said they tried to obtain chassis from other suppliers, but the other providers did not have appropriate types of chassis available in sufficient quantities. They contend that they also repeatedly informed NWS and Del Monte of the chassis shortage at the port.
Under the FMC process, after the complaint is served, Network Shipping as the respondent has 25 days to file a response for review with the FMC. Under the process, the initial decision of the presiding FMC judge shall be issued by August 5, 2024, and the final decision of the FMC shall be issued by February 17, 2025.