US Importers Say Carrier Failed to Provide Chassis, Leading to $2 Million in Damages

U.S. carrier Network Shipping Ltd. (NWS) violated U.S. shipping regulations when it failed to provide chassis for certain shipments and instead unfairly provided those chassis to its parent company, a produce distributor, multiple produce importers and exporters said in an August complaint to the Federal Maritime Commission. The companies said they suffered $2 million in damages and costs "in connection with dumping, inspection, transportation, and lost sales of the perished cargo" due to NWS' actions, the report said.

The complaint -- bought by American importers Coast Citrus Distributors and Amazon Produce Network as well as Ecuadorian companies Refin Tropicals, Bresson and Sembríos de Exportación Sembriexport -- asks the FMC to order that NWS violated U.S. shipping regulations. The companies also asked the FMC to order NWS to put in place "lawful and reasonable practices" that prevent it from providing chassis "in an unequal manner to shippers." NWS also should pay reparations for the conduct, the complaint said.

The companies said they contracted with NWS to ship mangoes from Ecuador to California's Port Hueneme from September 2021 to January 2022. The shipments began experiencing delays when NWS failed to provide chassis and the mango shipments couldn't leave the California port, the complaint said. The companies said this was because NWS gave "preferential treatment" to Del Monte, an importer "affiliated with NWS," to "avoid delays in the delivery of Del Monte products."

The complaint said Del Monte CEO Mohammad Abu-Ghazaleh "acknowledged" that the importer "worked hand-in-hand" with NWS to "achieve timely deliveries of its products." Abu-Ghazaleh at the time allegedly reported that his company was "achieving an almost 100% on-time delivery rate," the complaint said.

The chassis delay led to some containers staying at the port for over 50 days, the complaint said, and "at least 108" containers of the importers' cargo were at port for 10 or more days, causing the fruit to spoil. NWS’ "failure to timely provide chassis" impacted more than 120 importers' containers, the companies said.

The complaint also said NWS was aware the cargo contained fresh mangoes, and the carrier "breached its obligation to allocate chassis in a just and non-discriminatory fashion, which caused significant damages to the Complainants." The companies said they told NWS and Del Monte about the chassis shortage and asked that chassis be provided, but NWS "failed to remedy the situation." This included a call that was scheduled in January 2022, but NWS' agent refused to attend the call, the complaint said. The companies said they sent a demand for compensation under the Shipping Act in May 2023.

NWS and Del Monte did not immediately respond to our request for comment.