British Retailer Sues Maersk for $13.9 Million

The British retailer Argos filed suit in the UK against A.P. Moller-Maersk for $13.9 million, claiming breach of contract in rate increases and services.

Argos, which is part of the British Home Retail Group, said in documents it filed with the High Court in London that Maersk Line had reneged on the freight rates set under its contract, according to the Independent.

Argos accused Maersk of walking away from a deal to transport 5,000 40-foot equivalent container units from the Far East to Britain in 2010 and another 5,000 in 2011.

By The Numbers: Asia-Europe Westbound Container Traffic.

Argos said in its suit that it was informed by Maersk on Jan. 15 that Maersk could no longer guarantee space for the containers at the price agreed, and that Argos would need to increase the payment from $930 to $2,730 dollars per FEU.

Documents filed by Argos with the UK High Court claim that Maersk ‘wrongfully repudiated and/or renounced the contract’ and that Argos ‘had to find another shipping line in order to ship containers from the Far East to the UK,’ resulting in aggregate losses of close to $14 million.

The documents said “(Argos) duly obtained alternative space protection for a period of two years from Kuehne & Nagel. Accordingly, aggregate losses are $13,877,660."

The outcome of the suit in the British High Court will be watched closely by U.S. importers who complained bitterly last winter about the shortage of vessel space for their imports from Asia and about the increases above rates set under their annual trans-Pacific shipping contracts that many liner companies were demanding at the time in order to load the importers’ containers.

“Maersk Line does not consider it appropriate to comment on the case as it is still ongoing,” a spokesperson for the company said.

Maersk announced in January that it was increasing its prices on cargo shipped between South Asia and Europe, and in a statement claimed: "The trading conditions for the carriers operating in these markets are still subject to unacceptable rate levels and the situation is unsustainable in the longer term. The rate increase is necessary to continue to operate our services with the high level of reliability our customers have come to expect from Maersk Line."