Samsung Electronics Sues CMA CGM Over "Unlawful" Pandemic-Era Charges

Consumer goods giant Samsung Electronics has filed a $186 million claim against CMA CGM over allegedly excessive charges during the pandemic era, when controversial billing policies were commonplace. At issue in the record-setting Federal Maritime Commission filing is the question of who should bear the cost of delays when extraordinary circumstances snarl the supply chain - the shipper, or the contracted carrier.

Starting in early 2020, right at the advent of the pandemic, Samsung stopped buying traditional port-to-port ocean freight contracts from CMA CGM and instead switched to prepaid "store-door" delivery contracts, paying the French carrier for final inland transport of the container. According to Samsung, CMA CGM repeatedly failed to perform on its inland transportation contracts; in addition, it allegedly charged Samsung about 120,000 "unlawful" D&D charges on inland delivery shipments. Samsung's attorneys detailed storage practices that they alleged amounted to holding containers "hostage" while racking up charges that - acccording to Samsung - should have been borne by CMA as the contracted inland delivery provider.

"[CMA CGM] continued to fail, repeatedly, to perform its inland transportation obligations properly, exposing [Samsung] to unreasonable costs, charges, delays, and other harms," the Korean company wrote in its FMC filing. "CMA proffered various excuses relating to alleged chassis shortages, trucker shortages, and port and terminal congestion matters, which were neither within [Samsung's] control nor [Samsung's] responsibility as the consignee of containers that CMA was obligated as the common carrier to deliver to the inland door destinations."

When Samsung declined to pay, CMA allegedly put a hold on Samsung cargoes in its system, including containers that were not part of any fee dispute. Further, Samsung alleges, CMA CGM would at times convert its prepaid "store-door" bills of lading to standard "CY" bills of lading, handing the inland transport responsibility that Samsung had paid for back to Samsung. As a result, containers racked up fees in storage: one single box cited in Samsung's complaint accumulated $160,000 in rail storage fees.

In total, Samsung says that it was forced to pay out $148 million to CMA or to third parties in connection with the fee disputes, plus another $8 million that Samsung had to spend on completing inland deliveries on its own. It also seeks about $30 million in pre-judgement interest, plus attorney's fees, for a total of at least $186 million - less than two percent of the carrier's FY2025 EBITDA. It appears to be the largest FMC monetary demand ever filed.

The filing announces the start of what may be a long proceeding. The Maritime Commission's administrative law judge will have until September 2027 to issue an initial decision, and the FMC has until mid-March 2028 to finalize it.