Furniture maker MCS sues two shipping companies, claims collusion
August 6, 2021 | 11:07 am CDT
MSC Shipping

Photo By Mediterranean Shipping Company

American home furniture manufacturer and supplier MCS Industries has filed a $600,000 lawsuit against Cosco and MSC Mediterranean Shipping Company, alleging the two shippers had violated the U.S. Shipping Act and exploited customers. 

MCS said the carriers had "unjustly and unreasonably exploited customers, vastly increasing their profitability at the expense of shippers and the U.S public generally, which bears increased freight cost in the form of inflation.”

MCS says that since the pandemic, shippers have colluded to manipulate the market.

“In a stark break from pre-pandemic practice, several ocean carriers refused to negotiate or provide service contracts to MCS, and those that did provide such service contracts, including the respondents named herein, refused to provide more than a fraction of the cargo capacity that MCS requested and needs, despite the fact that the respondents overall have continued to operate at or near pre-pandemic capacity," the filing reads.

MCS says Cosco offered just 1.6 percent of the capacity it was contractually obliged to make available, while MSC offered 35 percent.

“By definition, the service contracts required respondents to 'commit to a certain rate or rate schedule and a defined service level, such as assured space, transit time, port rotation, or similar service features,” says the complaint.

MCS says the shippers then "forced" it to buy space on the vastly inflated spot market.

MCS said the collusion was made possible because there are now just three alliances that dominate 90 percent of the East-West trade lanes.

MSC, the world's second-largest shipper, said it was 'shocked' by the suit and rejected claims of collusion. Cosco has not yet issued a response.

MCS says a container shipped from China to the U.S. West Coast in 2019 would have cost $2,700. Now that same voyage would cost more than $15,000.

Congress recently moved to give the Federal Maritime Commission more power to investigate shipping lines. Shipping companies are on track to post their highest ever profits, which could equal triple the previous all-time highs, reports Splash247.

MCS produces home decor, and architectural moldings for the home construction and improvement markets.

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Robert Dalheim

Robert Dalheim is an editor at the Woodworking Network. Along with publishing online news articles, he writes feature stories for the FDMC print publication. He can be reached at robert.dalheim@woodworkingnetwork.com.