Maersk Flexible Contract Version 1-FMC Lanes
Shipper / Carrier Definition
This Service Contract (as may be subsequently amended from time to time, hereinafter "Contract") is made by and between (1) Maersk Agency U.S.A., Inc. as agent for Maersk A/S dba Maersk (hereinafter "Carrier") and (2) the party(ies) identified on the Contract/Signatories page hereto (hereinafter "Shipper"), whereby the parties mutually agree as follows.
Fulfilment of Minimum Quantity Commitment
(A) Shipper agrees to tender the MQC of the commodities set forth herein for carriage pursuant to a contract of carriage with Carrier, whether evidenced by a bill of lading or otherwise within the geographic scope of this Contract during the Term of this Contract. For purposes of this Contract, a "bill of lading" means any negotiable bill of lading or any seaway bill of lading.
(B) After the date that Carrier has fulfilled the MQC, Carrier shall have no further obligations under this Contract.
(C) All cargo shipped by Shipper at Tariff prices or agreed rates during the Term shall count towards the MQC.
Service Contract Minimum Quantity Commitment
Shipper's Minimum Quantity Commitment:
|
20 |
40/40HC/45 |
53 |
|
|
Dry |
0.5 |
1 |
1.60 |
|
Reefer |
0.5 |
1 |
N/A |
Schedule/Service Pattern Changes
The provision of the services from or to the origins/destinations set forth in the Contract Output is subject to changes in Carrier's schedule/service patterns. Should Carrier for any reason discontinue service to/from any origin/destination referenced in the Contract Output, it shall not be required to continue to carry cargo, whether within the MQC or not, from or to such origin/destination listed herein. In such event, Shipper and Carrier shall negotiate in good faith regarding an amendment to this Contract reflecting the change in service. If the parties are unable to reach agreement on such amendment, then the Shipper's sole remedy shall be to reduce the MQC by calculating an amount based on the volume of cargo shipped to/from such origin/destination as of the date the service is discontinued ("Remaining MQC Portion"). To determine the Remaining MQC Portion, the parties shall multiply the number of days remaining in the Term by the ratio of (x) cargo shipped to/from such origin/destination since the date this Contract was effective until the date of discontinuance over (y) the number of days that have elapsed during such period. Example: If 200 days remain in the Term and 20FFE has been shipped to/from Port A during the first 100 days of the Term, the MQC would be reduced by 200 x 20/100 = 40FFE.
Vessel Space
Carrier agrees to make available vessel space adequate to carry the MQC and, solely at Carrier's option, any additional cargo tendered by the Shipper as set out under Appendix 1. Carrier may provide such capacity through equipment it owns, operates, charters, leases or through vessel sharing arrangements with other carriers.
Carrier’s obligation to provide vessel space adequate to carry the MQC is based on the MQC spread across evenly on weekly basis throughout the Term and as set out in Appendix 1. Carrier shall not be bound to provide any additional space other than the Weekly Volume Nomination plus the Flexibility in any week. Shipper shall, therefore, plan its weekly volume requirement in a such a way that it will meet its MQC at the end of the Term. Nevertheless, any cargo carried under this Contract shall count towards fulfilment of MQC.
Application of Service Contract Rates and Tariff
The effective date of this Contract and/or the rates of this Contract is as provided for herein. Shipper shall pay the Contract rates set forth in the Contract Output which shall apply until the Contract expiration date unless otherwise stated herein. In addition, except as otherwise provided for in the section of this Contract ("Service Contract Rates - Surcharges") or the Contract Output, shipments under this Contract shall be subject to the Tariffs. The term "Tariffs" means Maersk A/S Transport Document Publication Tariff, Regulated Contract Essential Terms Tariff and any other tariffs (including freight rate increases applicable to the movement of any commodities, charges, surcharges, rules, obligations, indemnities, regulations, arbitraries/additionals or terms in the Tariffs published by Carrier and applicable to the carriage of cargo in the trades covered by this Contract as provided in the Contract Output), provided that this Contract shall not be subject to the general rate increases published in the Tariffs. The full texts, including subsequent modifications of such Tariffs, are published at www.maersk.com. The Tariffs and Contract Output are hereby incorporated by reference, including any subsequent modifications. Except in regards to the rates and charges set forth in this Contract, the current terms and conditions of Carrier’s standard form of bill of lading covering individual shipments shall in all respects apply to shipments hereunder. If during the Term of this Contract Carrier eliminates a charge or surcharge from the Tariffs that was payable by Shipper hereunder, Shipper agrees that Carrier shall amend the base ocean rates in this Contract to increase such rates by an amount equal to the amount of the eliminated surcharge(s) at the time of its or their elimination from the Tariffs, so that the total amount payable to Carrier by the Shipper with respect to shipments hereunder remains unchanged. If during the Term of this Contract Shipper moves cargo priced at Tariff, Contract terms pertaining to conditions such as Free Time shall apply to such shipments.
Bunker Adjustment Factor (“BAF”)
Notwithstanding anything to the contrary in this Contract, the Carrier and Shipper may agree on a Bunker Adjustment Factor (“BAF”) which shall follow a mechanism set out below:
BAF as filed in the Tariff shall be applied either as (i) a separate surcharge; or (ii) rolled into the Basic Ocean Freight (“BAS”). If the BAF is rolled into the BAS, the BAS rate will automatically change according to the BAF published in Carrier’s Tariff from time to time. For E.g. If the BAF published in Carrier’s Tariff increases by USD50 effective April 1st, the BAS will automatically increase by USD50 effective from April 1st.
For any BAF following the Tariff as set out in (i) and (ii) above then any change in BAF will follow Carrier’s Tariff quarterly cycle. Notwithstanding the foregoing, Carrier reserves the right to carry out any ad-hoc reviews for BAF in its sole discretion in case of any exceptional event(s) and in such cases any changed BAF shall come into effect by one month pre-notice to the Shipper.
Carrier and Shipper may agree to have a Bunker Adjustment Factor (“BAF”) calculated as per customer specific terms. Any customer specific terms need to be clearly described and accepted by the Carrier.
Low Sulphur Surcharge (“LSS”)
Notwithstanding anything to the contrary in this Contract, the Carrier and Shipper may agree on a Low Sulphur Surcharge (“LSS”) which shall follow a mechanism set out below:
LSS as filed in the Tariff shall be applied either as (i) a separate surcharge; or (ii) rolled into the Basic Ocean Freight (“BAS”). If the LSS is rolled into the BAS, the BAS rate will automatically change according to the LSS published in Carrier’s Tariff from time to time. For E.g. If the LSS published in Carrier’s Tariff increases by USD50 effective April 1st, the BAS will automatically increase by USD 50 effective from April 1st.
For any LSS following the Tariff as set out in (i) and (ii) above then any change in LSS will follow Carrier’s Tariff quarterly cycle. Notwithstanding the foregoing, Carrier reserves the right to carry out any ad-hoc reviews for LSS in its sole discretion in case of any exceptional event(s) and in such cases any changed LSS shall come into effect by one month pre-notice to the Shipper.
Carrier and Shipper may agree to have a Low Sulphur Surcharge (“LSS”) calculated as per customer specific terms. Any customer specific terms need to be clearly described and accepted by the Carrier.
Emissions Regulation Clause
(A) Shipper accepts and acknowledges that during the Term of this Contract Carrier may be subject to regulatory or other industry-wide requirements relating to emissions, fuel bunker content requirements or a requirement to purchase allowances or otherwise make payments calculated by reference to Carrier’s emissions, or any other regulation whatsoever relating to de-carbonisation or any other environmental concern (each an “Emissions Regulation”).
(B) Shipper accepts and acknowledges that an Emissions Regulations may arise in any jurisdiction in which Carrier performs activities with any of its customers and that an Emissions Regulation may not yet be envisaged, implemented or in full force and effect as of the date of this Contract. Specifically, and without limitation, Shipper agrees that each of the following will be considered to be an Emissions Regulation under this Contract:
- Amendments to MARPOL Annex VI, introducing an Energy Efficiency Design Index for existing ships (EEXI) and Carbon Intensity Indicator (CII), anticipated to enter force in 2022 and 2023, respectively, and known in the industry as “the IMO 2023 regulations”;
- The expansion of the European Union Emissions Trading System (ETS) to include the shipping industry, which is to be phased in beginning in the year 2024; and
- The FuelEU Maritime Initiative, which is proposed to be phased in beginning in the year 2025.
(C) Where Carrier is subject to one or more Emissions Regulation(s), Shipper shall pay to Carrier an amount assessed by the Carrier in the Carrier’s sole discretion as being the Carrier business cost of complying with that or with those Emissions Regulation(s) in performing this Contract.
Flag Requirement
Unless otherwise indicated within this Contract, rates set forth in this Contract do not apply to:
(1) Any cargo being moved pursuant to an US government-related program, which includes but is not limited to US Military, USAID, International Department of Development, US State Department, US Department of Agriculture, US Government Household Goods and US Foreign Military Sales cargo.
(2) Project Cargo which is construction, building, manufacturing materials or supplies or any other materials for a Government-impelled named project.
(3) Any cargo that must be carried on an US Flagged vessel as required by Cargo Preference Laws.
Right of Carrier to reduce, exempt or extend rates
Carrier has the right to i) reduce one or more rates, ii) to exempt shipments hereunder from one or more tariff surcharges, and/or iii) to extend one or more contract rates for a time period specified by Carrier (but in no event longer than 90 days) without the written agreement from Shipper. Carrier shall provide Shipper a copy of such amendment within ten (10) days of filing with the FMC. If Shipper provides written notice to Carrier that it objects to such amendment within five (5) days after receiving filing confirmation, Carrier shall amend the Contract to remove such reduction, exemption or extension and provide Shipper written evidence that it has taken such action.
Tendering as Acceptance
If Carrier sends Shipper a written offer to add a new rate, or replace an expiring rate (which rate would be less than Tariff) to this Contract for a specific origin/destination/commodity/container size/type, Shipper shall be deemed to have accepted such offer by (i) providing Carrier written acceptance of such offer or (ii) the action of Shipper tendering cargo to Carrier after the date of Carrier’s rate offer for the same origin/destination/commodity/container type/size.
Damages for Carrier's Non-performance
Damages for Carrier’s Non-Performance are set out in Appendix 1 to this Contract.
Damages for Shipper's Non-performance
(A) If at the end of the Term Shipper has not met the MQC, Shipper shall be liable to Carrier for liquidated damages. The parties agree that the measure of such liquidated damages for Shipper's non-performance shall be: $1000 per FFE of dry cargo committed, but not shipped and $2000 per FFE of refrigerated cargo committed, but not shipped.
(B) Notwithstanding the foregoing, Shipper’s damages to meet its Weekly Volume Commitment shall be exclusively governed by Appendix 1.
Service Contract Number Reference
Shipper shall reference the service contact number upon cargo booking, on each bill of lading and set of shipping instructions for shipments tendered pursuant to this Contract. If Shipper fails to reference the proper service contract number on each bill of lading, Carrier may elect to reduce the WVC by the shipment covered by such bill of lading.
Shipper's Qualification
In order for cargo to qualify for the rates and terms set forth in this Contract, including without limitation, counting towards the MQC, the Shipper or affiliated concern must appear as shipper or consignee on the applicable bill of lading; provided however, that in instances where Shipper appears as "First Notify Party" on the bill of lading, and Carrier determines that there is sufficient evidence permitting it to conclude that the cargoes are owned by or consigned to the Shipper, such cargo shall also qualify under the rates and terms set forth herein.
Supporting Shipment Records
Carrier's bills of lading/manifest Data and Electronic Data Processing reports, the Shipper's statements of cargo shipped under this Contract, and written communications issued by Carrier regarding such statements shall constitute the records supporting performance under this Contract. The address, telephone number and title of the Carrier representative who will respond to request under 46 CFR, 530.15 is provided under the Section titled "Written Notice".
Force Majeure - Definition and Occurrence
Upon any Force Majeure conditions occurring, the parties shall be excused from their obligation (other than the obligation of the Shipper to pay money owed in connection with the performance of this Contract) under this Contract to the extent and for the duration of the Force Majeure conditions. Neither party shall be obligated to settle any strike, lockout or other labor disturbance or disputes with governmental entities in a manner contrary to its interest, which shall be determined in the affected party's sole discretion. Upon the reinstatement of the Contract obligations after a Force Majeure Event, the Shipper's MQC applicable to the origins/destinations affected by such Force Majeure Event will be reduced by a percentage equal to the (i) duration in calendar days of the Force Majeure event divided by (ii) the duration in calendar days of the Term.
The term "Force Majeure" as used herein shall mean any and all events beyond the reasonable control of a party including, without limitation, strikes, congestion, work stoppages, lockouts or circumstances arising from the threat thereof; acts of God, states or a public enemy, terrorism, cyber-attack, war, hostilities, riots, civil disorder, insurrection, embargo, governmental actions (whether informal or formal government acts) or other similar disruptions or interference with trade, marine disaster, fire and or other casualty.
Amendments
After Carrier and Shipper signed this Contract and it has been filed with the Federal Maritime Commission, the parties may enter into subsequent amendments to this Contract by each party's mutual agreement in writing and may be exchanged by original signature, fax signature or via an exchange of e-mails. Such amendment shall not be effective until filed with the FMC. Except for technical corrections and revisions reflecting adjustments provided for in this Contract, no modifications of the Contract or waiver of any of its terms or conditions shall be of any force or effect unless made in writing expressly stating that it is intended by both parties to modify this Contract and signed by the parties. Shipper hereby consents to a maintenance amendment to the Contract without Shipper's approval for the purposes of reflecting non substantive change.
Applicable Law
As set out under Appendix 1 to this Contract.
Assignment
The Shipper may not assign this Contract, including any or all its rights or liabilities hereunder, or otherwise permit any other person or entity, directly or indirectly to utilize services, rates, or other terms provided by Carrier under this Contract, without prior consent of Carrier. Carrier may assign or novate this Contract, including any or all its rights or liabilities hereunder to any company or other entity within the A.P. Moller-Maersk Group by giving public notice or in other way informing the Shipper.
Confidentiality
Except upon written consent of the other party, or to the extent required by law, or by request of a competent government entity, agency, court or tribunal thereof, or as otherwise necessary to comply with governmental requirements, neither party shall disclose the terms and conditions of this Contract to third parties other than to affiliates who agree to be bound by the same confidentiality provisions. Carrier may disclose to a third party terms and conditions of this Contract for the purposes of performing this Contract or collecting outstanding charges related hereto, including, but not limited, to ocean freight, demurrage and detention. In the event Shipper breaches its confidentiality obligations hereunder, Carrier shall be entitled (but not required) to terminate this Contract with immediate effect by providing written notice of termination to Shipper.
Counterparts
This Contract may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement, and all signatures need not appear on any one counterpart.
Invoice Dispute Time Bar
In case of a dispute arising under or relating to this Contract for the payment of freight and charges, such dispute shall be handled pursuant to the law and jurisdiction clause in the Carrier's bill of lading. In the event the Shipper disputes an item invoiced by the Carrier or requires additional supporting documentation, the Shipper shall notify the Carrier in writing thereof within thirty (30) calendar days from the date of invoice, specifying the disputed item and requesting the Carrier to issue a credit note for the unaccepted part or whole of the invoice as applicable. In any event the Shipper shall in such circumstances be obliged to pay only the undisputed part of a disputed invoice. If Carrier disagrees with the Shipper’s decision regarding the disputed item, the Carrier shall inform the Shipper in writing accordingly within 30 calendar days after receipt of the Shipper's statement. In the event this dispute is resolved in favor of the Carrier, Shipper shall be responsible for immediate payment of the full invoice value.
Shipper shall be deemed to have accepted any Carrier invoice and waived any rights to dispute if Shipper fails to submit a dispute in writing within one (1) year from the date of Carrier’s invoice. Carrier shall be deemed to have been paid in full by Shipper and waived any rights to request payment for an undercharge if not submitted to Shipper in writing within one (1) year from the date of Carrier’s initial invoice related to such undercharge. Any extension of this time bar must be granted by either Carrier and Shipper in writing as the case may be.
Disputes
As set out under Appendix 1 to this Contract.
Entire Contract
As set out under Appendix 1 to this Contract.
Severability
Any provision hereof which is prohibited or unenforceable in any jurisdiction shall not invalidate or render unenforceable any other provision of this Contract.
Shipper's Warranty
The Shipper warrants that it has all due authority to enter into this Contract and to bind such affiliates to the Contract terms and that such affiliates shall be jointly and severally liable for the Shipper's obligations under this Contract.
Shipper hereby certifies it and the entity(ies) declared in this Contract as affiliate(s) have either (a) a common entity that directly or indirectly owns at least one (1) percent of both Shipper and such affiliate(s) or (b) Shipper directly or indirectly owns at least one (1) percent of such affiliate(s). If not otherwise provided in this Contract, Shipper hereby agrees that it will provide the business addresses of each of the contract listed affiliates to Carrier five (5) business days of a written request for the same from Carrier.
Application of Store Door Rates
Store door rates may be subject to, but not limited to, Overweight, Triaxle and Hazardous charges and shall include the cost for a round trip drayage of a loaded and empty container. Any additional drayage expense over one round trip from the destination interchange terminal to the Shipper's facility and/or additional trucker waiting time over the time allowed per tariff or contract shall be for the account of the Shipper. If at any time, the number of empty containers at the Shipper's facility exceeds the number of full loads to be delivered to or picked up from the Shipper's facility over the next 14 calendar days, then Carrier will pick up the excess empty containers and bill the Shipper for an additional round trip drayage charge as per Carrier’s inland tariff. Shippers will have the option to return the empty equipment within 7 calendar days at their cost once notified by Carrier. For all lanes in which Carrier has committed to store door delivery via truck, the Carrier shall execute the transport moves committed. Provision of store door deliveries in excess of Carrier’s commitment will be subject to mutual agreement.
Maersk Provided Trucker rate index (applicable to U.S. locations only)
Inland Fuel Adjustment Factor
If this Contract provides for store door service (truck or rail), this Section shall also apply, and an Inland Fuel Adjustment Factor (“FAF”) shall apply to this Contract. Notwithstanding anything to the contrary in this Contract, the following provisions shall apply.
1. Calculation of the Inland Rates
(a) The rate for store door service (truck or rail) applicable to each relevant container shall be equal to the sum of the Inland Haulage cost (being the Inland Haulage Export, Inland Haulage Import, or Inland Haulage Landside), plus the Inland Fuel cost (being the Inland Fuel Export, Inland Fuel Import, or Inland Fuel Landside),
where:
The Inland Haulage cost is a fixed USD amount as set out in the Rate Sheet or Inland Rates Appendix;
The Inland Fuel cost is a USD amount which is calculated by multiplying the FAF with the Inland Haulage cost;
The FAF is a percentage amount which varies over time in order to give effect to any changes in the fuel index(ices) (including aggregated and item-specific indices) relevant to the country(ies) in relation to which the parties have agreed the Inland Nomination. The FAF shall be revised on a quarterly basis by reference to the fuel index(ices) to be selected at Carrier’s reasonable discretion for each FAF revision and made available at www.maersk.com/news/articles/2022/12/01/global-fuel-indexes; and
“Fuel” includes any solid, liquid, plasma or gaseous combustible material, biofuels, fuels derived from renewable technologies, and any other existing or future fuel type used to produce energy.
By way of example only, Carrier sets out the below hypothetical rate calculations, in the below example where the FAF is reduced between Q2 and Q3:
(b) Carrier will revise the FAF each calendar quarter during the Term. Carrier will communicate the revised FAF (including the index(ices) used in such revision) to Shipper once it has been established.
(c) Notwithstanding the foregoing, Carrier reserve the right to carry out any ad-hoc reviews of the FAF in Carrier’s sole discretion in case of any exceptional event(s) and in such cases any changed FAF shall come into effect on one (1) month’s written notice to the Shipper.
(d) The parties may agree to have a FAF model calculated as per customer specific terms. Any customer specific terms need to be clearly described and accepted by the Carrier. In such cases, those terms shall overrule this Section to the extent there is a conflict.
US Trade Control Compliance
The Shipper shall comply with all applicable laws, rules and regulations, including, but not limited to, the export laws and government regulations of any country (“Laws”) to, from, or through which the Goods may be carried. The Shipper hereby also warrants that the Goods do not require Carrier to obtain any special license or permit for transportation, exportation or importation of the Goods and, to the extent required by law or regulation, the Shipper has obtained all necessary export, reexport, and/or import licenses or permits. The Shipper also warrants that transportation, importation or exportation of the goods is not prohibited by any applicable law or regulation, including comprehensive economic and/or trade sanctions maintained by the United States. To the extent applicable, the Shipper further warrants that it or any party that the Shipper trades with is not a party identified on the U.S. Commerce Department's Denied Persons List or Entity List; the U.S. Treasury Department's list of Specially Designated Nationals and Blocked Persons; The U.S. State Department's Debarred List; or any other similar list of prohibited or denied parties maintained by any other country.
The Shipper shall indemnify and hold Carrier harmless to the full extent of any loss, damage, cost, expense, or liability to Carrier including attorney's fees and court costs for any failure or alleged failure of Shipper to comply with Laws and regulations of any country or specially granted licenses from relevant authority permitting export of the Goods supplied to Carrier for transportation. Carrier assumes no liability to Shipper or any other person for any loss or expense - including, but not limited to, fines and penalties – in connection with the Shipper's failure to comply with Laws or licenses granting the transaction.
Written Notice
Written notice shall be deemed to have been duly served on the Shipper if delivered in person or by registered mail, courier or by facsimile (fax) or e-mailed to the Shipper's address on the signature page of this Contract or, if such has been changed subsequent to the execution of this Contract, to the last business address provided to Carrier. Written notice shall be deemed to have been duly served on Carrier if delivered in person or by registered mail, courier or by facsimile (fax) or e-mailed to Regulatory Affairs, Maersk Agency U.S.A. Inc. 180 Park Avenue, Florham Park, NJ 07932, fax: 973-514-5214.
APPENDIX 1 TO THE CONTRACT
Maersk Flexible Terms v.1
1. CARRIER’S TERMS FOR SERVICE AND CARRIAGE
1.1. The Carrier’s Service Contract Terms available at https://terms.maersk.com/service (“Service Contract Terms”) are incorporated herein for non-U.S. trade lanes, the Contract terms apply for U.S. trade lanes and further the Carrier’s terms for carriage available at https://terms.maersk.com/carriage (“Terms for Carriage”) or otherwise obtainable from the Carrier upon request, are incorporated herein by reference and shall apply to all individual shipments carried under these Maersk Flexible Terms v.1 (hereinafter referred to as “Flexible Terms v.1” or “Terms”). The definitions set out in the Terms for Carriage and Service Contract Terms are adopted for these Flexible Terms v.1. The term “Contract” as used herein means the service contract signed between the parties for filing with the Federal Maritime Commission (“FMC”).
In the event of any conflict, the order of precedence shall be as follows:
- these Flexible Terms v.1 including Contract Output;
- the Terms for Carriage; and
- the Service Contract Terms (for non-U.S. trade lanes) and the Contract (for U.S. trade lanes), as applicable.
1.2 The contract output specifies the geographic scope, commodities and rate related information (”Contract Output”) which forms a part of these Flexible Terms v.1 as set out above. Rates appearing in the Contract Output may be subject to surcharge(s) resulting from congestion, emergency risks, government or supranational mandates, capacity or equipment issues or any other cause whatsoever which causes increased expenditure to the Carrier in carrying the cargo.
2. DURATION AND SCOPE
2.1 These Terms shall come into effect on the Commencement Date as provided in the Contract Output or the earliest date permitted by the U.S. Shipping Act and shall expire on the Expiration Date as stated in the Contract Output (the “Term”), unless terminated earlier in accordance with the termination provisions hereunder. The Shipper’s and Carrier’s respective commitments towards the Weekly Volume Commitment (“Weekly Volume Commitment” or “WVC” as defined at Clause 4.1) under these Terms shall only apply within the scope stated in the Contract Output.
2.2 The commitments covered under these Terms shall not apply to any bookings related to refrigerated cargo.
2.3 Carriage of dangerous and/or hazardous Goods shall be subject to Clause 21 of the Terms for Carriage and acceptance thereof shall be subject to Carrier’s sole discretion. The commitments/promises covered under these Terms shall not apply to any bookings of dangerous and/or hazardous Goods unless such shipments are accepted by Carrier for Carriage.
3. SHIPPER'S FORECAST OF VOLUME
3.1 Shipper forecasts shipment of a minimum quantity of Forty Foot Equivalent Units (“FFEs”) during the Term (the “Total Nomination”). The Total Nomination shall be equally divided by the total number of weeks during the Term, resulting in a weekly nomination of shipment Shipper shall tender to Carrier for carriage (”Weekly Volume Nomination”), plus the percentage of any additional weekly volume agreed to in the Contract Output (“Flexibility”).
For purposes of the WVC calculations, the following equivalencies shall apply:
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20’ |
40’ HC/NOR |
45’ |
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Dry |
0.5 FFE |
1 FFE |
1.266 FFE |
“HC” means high cube containers.
“NOR” means non-operating reefer containers.
*Example given for purposes of calculating the WVN:
Total Nomination from Shanghai to Rotterdam = 5200 FFEs
Term: 52 Weeks
Weekly Volume Nomination = 100 FFEs (5200/52)
Flexibility = 10% of Weekly Volume Nomination, i.e. 10 FFEs
Weekly Volume Nomination plus Flexibility= 110 FFEs
4. FLEXIBLE COMMITMENTS
4.1 The Flexible commitments prior to the Estimated Date of Departure (“ETD”) are set forth as follows:
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Shipper |
Carrier |
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Greater than (>) seven (7) calendar days prior to the ETD |
Weekly Volume Nomination |
Weekly Space Allocation |
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Weekly Volume Nomination is provided at the time of contracting and is a non-binding indication of the weekly cargo volumes that Shipper may tender for shipment with the Carrier at the contracted rates. |
Carrier will provide allocation at the contracted rates agreed for the Weekly Volume Nomination and the Flexibility provided at the time of contracting (“Weekly Space Allocation”). |
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The Shipper may book shipments anytime up until seven (7) calendar days in advance of the ETD. The booked volume can be less than the Weekly Volume Nomination or in excess of the WVN, but in any event within the Flexibility offered. |
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Less than or equal to (≤) seven (7) calendar days prior to the ETD |
Volume commitment |
Vessel Space commitment |
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Any volume booked up until seven (7) calendar days prior to the ETD which is within the Weekly Volume Nomination plus the Flexibility becomes Shipper’s weekly volume commitment (“Weekly Volume Commitment” or “WVC”). Shipper’s failure to meet the WVC is subject to the fees contained in Clause 5. |
Carrier shall provide vessel space sufficient to carry the Weekly Volume Commitment, failing which the Compensation Fee set out in Clause 6.1 may apply. |
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Carrier shall be free to release the unused Weekly Space Allocation ("Unused Space") in the event: (i) the WVC is less than the Weekly Volume Nomination; or (ii) the booked but not tendered volume is less than the WVC. |
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Always Space |
If Shipper requires any additional space (i) over and above the Weekly Volume Nomination plus the Flexibility; and/or (ii) requires space after release of Unused Space in any week during the Term, then Carrier will exercise reasonable endeavours to accommodate such requests via: |
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The applicable floating rates for the Always Space option are published every month by Carrier and, if applicable, are filed with the FMC. Shipper shall be deemed to have accepted such floating rates as published by Carrier by using the Always Space option and booking the cargo for carriage under such option. |
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Any volume(s) booked under the Always Space option shall also become a part of the Weekly Volume Commitment and shall be subject to these Terms. |
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4.2. The weekly calculation stated herein is based on the Proforma Departure Date and not on calendar weeks.
4.3 Freetime terms and conditions under these Terms shall be in accordance with those effective at the time of the Commencement Date and shall be made available to Shipper and/or its affiliates at the time of booking for the Origin/Destination, Container Size/Type and commodity booked.
5. DAMAGES FOR SHIPPER’S NON-PERFORMANCE
5.1 In accordance with the WVC, Shipper agrees to tender the Goods for shipment with the Carrier before the cut-off time(s) as indicated in the booking confirmation.
5.2 Cancellation Fee
Should the Shipper wish to cancel a shipment of a part of or all of the containerised Goods from the WVC at any time after seven (7) calendar days prior to the ETD, then the Shipper shall pay to the Carrier a fee of USD 200 per container that is cancelled (“Cancellation Fee”). The bookings made on the floating rate will only be subject to Cancellation Fee if cancellation is made later than twenty-four (24) hours after booking confirmation.
5.3 No-show Fee
If the Shipper fails to notify the Carrier of a cancellation of a part or all of the containerised Goods in accordance with Clause 5.2 above, or otherwise fails to deliver a part or all of the containerised Goods for shipment from the WVC at any time after seven (7) calendar days prior to the ETD, then the Shipper shall pay a “no-show” fee of USD 200 per container (“No-show Fee”).
5.4 Amendment Fee
If any booking amendment as set out under Schedule I is requested by Shipper any time after seven (7) days prior to the ETD, then such amendment shall be subject to a fee at the rate stated in the Contract Output per container (“Amendment Fee”). The bookings made on the floating rate will only be subject to Amendment Fee if the change(s) are made later than twenty-four (24) hours after booking confirmation.
5.5 Subject to Clause 6.3, in case Carrier fails to make available the equipment agreed and indicated in the booking confirmation or a suitable alternative, the Shipper shall not be liable for any Cancellation and/or No-show Fee.
5.6 Notwithstanding the foregoing, if the failure by the Shipper to properly tender the Goods to Carrier is due to:
- any Force Majeure event, (the term "Force Majeure" as used herein shall mean any and all events beyond the reasonable control of a party including, without limitation, strikes, work stoppages, lockouts or circumstances arising from threats thereof; acts of God, states or a public enemy, terrorism or threats thereof, cyber-attack, war, hostilities, riots, civil disorder, insurrection, embargo, pandemic, governmental actions (whether informal or formal government acts) or other similar disruptions or interference with trade, marine disaster, fire and or other casualty); or
- the unavailability of a vessel or alternative vessel due to blank sailing
then Shipper shall not be liable for the payment of any fee(s) set out in this Clause 5, provided that evidence thereof is demonstrated to the satisfaction of the Carrier.
6. CARRIER’S SERVICE COMMITMENT
6.1 Carrier’s service commitment shall be as set out in the below table:
|
Scope |
||
|
Delivery Promise |
Standard Delivery Promise |
Essential Delivery Promise |
|
Carrier commits that the vessel arrival time at final discharge port shall be no later than three (3) days after the scheduled Estimated Date of Arrival (“ETA”) as booked and confirmed in the initial booking confirmation. |
Carrier commits that the vessel arrival time at final discharge port shall be no later than ten (10) days after the scheduled Estimated Date of Arrival (“ETA”) as booked and confirmed in the initial booking confirmation. |
|
|
Load as Booked |
If a given port pair is not listed here, or the specified Delivery Promise has been disapplied by Carrier, then Carrier agrees to load the tendered volume within the WVC aboard the original first leg ocean going vessel listed in the booking confirmation. If Carrier requires to load the container on an alternative vessel, then Carrier shall load the container aboard an alternative vessel no earlier or later than three (3) days before or after the scheduled ETD as confirmed in the booking confirmation. |
|
|
Allocation Grouping(s) |
The Shipper’s Weekly Volume Commitment and Carrier’s space commitment may be split into allocation grouping(s) as may be separately agreed. Such allocation grouping(s) indicates the geographical distribution of the Weekly Volume Commitment. Shipper acknowledges that the allocation grouping(s) may be impacted by network and/or operational constraints (including but not limited to reduced capacity to or from any port) and may therefore be subject to changes. In such event, Carrier will exercise reasonable endeavours to reallocate the impacted volume to the unaffected port pair(s) from the same or different allocation grouping(s) for the relevant period. In any event and failing feasible alternatives, Carrier reserves the right to reduce the Weekly Volume Commitment equal to the impacted volume for the affected time period without any further liability by either party. |
|
|
Exceptions |
In the event Shipper requests any changes to the confirmed initial booking, the scheduled ETA (Standard/Essential Delivery Promise) or ETD (Load as Booked) in the subsequent revised booking confirmation will apply in those cases. Carrier’s commitment shall automatically extend as per the rescheduled ETA or ETD in such subsequent revised booking confirmation. In the event Carrier initiates any service changes resulting in a revised ETA or ETD, the original scheduled ETA or ETD as confirmed in the initial booking confirmation shall nevertheless apply. |
|
|
Equipment Availability |
Subject to Clause 6.3, Carrier shall provide the equipment indicated in the booking confirmation or a reasonable alternative to the Shipper. |
|
|
Damages |
Subject to the contingencies specified in Clause 6.2, Carrier shall pay USD 200 per container (“Compensation Fee”) for failure to comply with its delivery or loading commitments (as the case may be), as further set forth below. The Carrier shall only be liable for one Compensation Fee in total for the same FFE. |
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6.2 Notwithstanding the foregoing, the commitments described in Clause 6.1 shall not apply in the following cases:
- Shipper’s untimely provision or failure to provide documents necessary for the transportation of Goods or incorrect declarations by Shipper;
- The late gate-in of the Goods;
- Laden containers which do not comply with weight restrictions or limitations under applicable law e.g., overweight containers) or containers that are damaged by inadequate loading and stowage of the Goods;
- Any default or breach of these Terms or any other set of terms agreed between the parties, on the part of the Shipper or anyone acting on Shipper’s behalf, which may result or create any hindrance to Carrier’s ability to perform hereunder;
- Carrier’s inability to perform (in whole or in part), or delay in performance due to a Force Majeure event; or
- Any omission of a scheduled call at any relevant port affecting the voyage due to operational reasons or any other reason beyond Carrier’s reasonable control or anticipation.
6.3(A) Carrier shall provide Shipper with the equipment indicated in the booking confirmation or a reasonable alternative. Except as expressly agreed in writing between the parties, Carrier is under no obligation to provide:
- Any special grade containers, including: food/dairy, flexitank, open tops, flat racks and scrap-grade containers;
- Any equipment from any location other than the default ‘Empty Container Depot’ stated in the booking confirmation; and/or
- Any equipment on a date earlier than the equipment ‘Release Date’ stated in the booking confirmation.
6.3(B) Some equipment grades are subject to additional charges. By making a booking to include such equipment grades, Shipper agrees to pay the additional amount. Details of those charges can be found at https://www.maersk.com/local-information under the country specific section or by contacting Carrier’s relevant local office.
6.3(C) If the parties have agreed on an equipment pick up/drop off point which is different from the origin/destination locations stated in the booking confirmation, Shipper agrees to pay any additional charges that may apply to that revised pick up/drop off point.
6.3(D) Carrier shall only provide 45’ equivalent units and NORs if it is expressly confirmed in booking confirmation. Carrier reserves the right to substitute 45’ equivalents unit and NORs with 40’ equivalent units and/or 40’HC equivalent units.
7. DAMAGES FOR CARRIER’S NON-PERFORMANCE
7.1 Notwithstanding any separate agreement between Shipper and Carrier, Shipper hereby explicitly agrees and accepts that the Compensation Fee stated under Clause 6.1 above shall constitute its sole and exclusive remedy for Carrier's failure meet its commitments stated under these Flexible Terms.
7.2 Notwithstanding any other provision to the contrary in these Terms or any separate agreement between Shipper and Carrier, Carrier shall in no event be liable whether directly or indirectly to the Shipper for any special, consequential, indirect (including, but not limited to, lost profits, lost sales, loss of reputation, loss of market share, loss of agreements or contracts, loss of anticipated savings, loss of use or corruption of software, data or information, loss of or damage to goodwill and lost opportunity costs, etc.), multiple, exemplary, liquidated or punitive and/or other extraordinary damages claimed by the Shipper. The foregoing limitation shall apply regardless of the form of action, whether the damages or other relief sought are based on a theory of breach of warranty, breach of contract, tort (including negligence), strict product liability or any other legal or equitable theory, even if the Carrier has been advised of the possibilities of such damages. The prohibition on the foregoing types of damages shall also apply whether the damages are characterized as "contract damages", "tort damages" or otherwise.
8. REVIEW, INVOICING AND PAYMENT
8.1 The Carrier shall conduct the quarterly review of performance under these Terms and ascertain the liabilities of each party.
8.2 Following the quarterly review, the invoice procedure set forth below shall apply to all invoices generated pursuant to these Terms:
- Invoices for Cancellation Fee, No-Show Fee and Amendment Fee will be submitted quarterly in arrears by Carrier to Shipper in an agreed format.
- The invoiced amount would be the result of the total amount of any Cancellation Fee, No-Show Fee and Amendment Fee owed by Shipper, less the amount of any Compensation Fee owed by Carrier.
- In the event that the amount of any Compensation Fee payable by the Carrier is more than the total amount of any Cancellation Fee, No-Show Fee and Amendment Fee payable by the Shipper during any quarter, the Carrier shall follow a self-billing process and at its sole discretion (i) issue a credit note in the name of the Shipper for the difference in amount; or (ii) if at the request of the Carrier, Shipper has provided its banking details to the Carrier prior to the Commencement Date of these Terms, refund the difference in amount to the designated bank account.
- Shipper shall not claim any credit from Carrier until the credit note is issued in Shipper’s favor after the quarterly review.
- A credit note shall not be issued in favor of Shipper and Shipper shall waive its right to any Compensation Fee from Carrier whatsoever if Shipper has overdue invoices outstanding in an amount of more than 10% of the Shipper’s total outstanding invoice amounts.
8.3 If Shipper believes that there is any discrepancy in Carrier’s invoice, Shipper must notify Carrier of such, outlining the basis for contesting the invoice within seven (7) days from the date of the invoice. Any invoices that are not contested in accordance with this provision shall be deemed to be valid and undisputed.
8.4 Shipper shall make its payments for any invoice issued by Carrier pursuant to this Clause on the payment due date indicated on the invoice, or in accordance with the separate credit agreement agreed to between the parties.
8.5 Any and all costs related to tax or any other mandatory charges, fines, penalty, fees, etc. as required by law or regulation shall be borne by the party legally liable to pay for such costs.
8.6 The invoices generated pursuant to section will be issued as per the details mentioned on the invoice. Shipper shall wire transfer the amount invoiced to the bank account stated in the invoice.
9. FAILURE TO PAY INVOICES
Shipper shall settle all payments in accordance with the credit agreement. In the event that Shipper does not settle any outstanding amounts accordingly, Carrier reserves the right to take any or all of the following actions:
- Withhold original documents including transport documents and/or cargo until all outstanding amounts due under these Terms, including the costs of collection efforts are settled.
- Suspend or terminate the provision of credit privileges and/or immediately withdraw from or terminate any and all agreements existing with Shipper including but not limited to these Terms and also cancel all negotiations with Shipper without any consequence.
- Suspend or terminate any special benefit and/or privilege whatsoever provided to the Shipper under these Terms and/or any other agreement with the Carrier or with any company or other entity within the A.P. Moller Maersk Group.
- Exercise any applicable right of lien over any cargo and discontinue any services.
- Upon notice, assess a fixed charge and/or interest permissible under applicable law on the outstanding overdue amounts.
- Commence collections proceedings to recover all amounts due and owing to Carrier. Any expenses and fees incurred in collection efforts shall be recoverable from Shipper.
10. SCHEDULE/SERVICE PATTERN CHANGES
The provision of the services from or to the origins/destinations set forth in the Contract Output and/or here is subject to changes in Carrier's schedules and service patterns. Should Carrier for any reason discontinue service to/from any origin/destination referenced in the Contract Output and/or here, it shall not be required to continue to carry the cargo, whether within the WVC or not, from or to such origin/destination. In such event, Shipper and Carrier shall negotiate in good faith regarding an amendment to these Terms reflecting the change in service. If the parties are unable to reach agreement on such amendment within thirty (30) days from such service change, then either party shall have the right to cancel, upon written notice to the other, the part of these Terms relating to the specific origin/destination which is affected by the service change.
11. EMISSIONS REGULATION CLAUSE
11.1 Shipper accepts and acknowledges that during the Term the Carrier may be subject to regulatory or other industry-wide requirements relating to emissions, fuel bunker content requirements or a requirement to purchase allowances or otherwise make payments calculated by reference to Carrier emissions, or any other regulation whatsoever relating to decarbonisation or any other environmental concern (each an “Emissions Regulation”).
11.2 Shipper accepts and acknowledges that an Emissions Regulations may arise in any jurisdiction in which Carrier performs activities with any of its customers and that an Emissions Regulation may not yet be envisaged, implemented or in full force and effect as of the date of agreeing to these Terms. Specifically and without limitation, you agree that each of the following will be considered to be an Emissions Regulation under these Terms:
11.2.1 Amendments to MARPOL Annex VI, introducing an Energy Efficiency Design Index for existing ships (EEXI) and Carbon Intensity Indicator (CII), anticipated to enter force in 2022 and 2023, respectively, and known in the industry as “the IMO 2023 regulations”;
11.2.2 The expansion of the European Union Emissions Trading System (ETS) to include the shipping industry, and to be phased in beginning in the year 2024; and
11.2.3 The FuelEU Maritime Initiative, which is proposed to be phased in beginning in the year 2025.
11.3 Where Carrier is subject to one or more Emissions Regulation(s), Shipper shall pay to Carrier an amount assessed by the Carrier in the Carrier's sole discretion as being the Carrier's business cost of complying with that or with those Emissions Regulation(s) in performing these Terms.
12. TERMINATION
12.1 After carriage of at least 1 FFE, these Terms, the Contract Output and the Contract (for U.S. trade lanes) may be terminated at any time during the Term by mutual agreement in writing between the parties. Save and except that, in case either party becomes insolvent, enters into liquidation (apart from solvent liquidation for the purposes of amalgamation or reconstruction) or is dissolved or declared bankrupt or has a receiver, administrator or administrative receiver appointed over all or a substantial part of its assets or enters into an arrangement with its creditors or takes or suffers similar action the other party may terminate these Terms and the Contract (for U.S. trade lanes) with notice immediately.
12.2 In the event of termination, the accrued rights and liabilities of the parties as at termination and the continuation of any provision surviving termination, shall not be affected.
13. ENTIRE AGREEMENT
Notwithstanding anything herein to the contrary, these Terms, including the Contract Output, Carrier’s Terms for Carriage and the Tariff together constitute the entire agreement and understanding between the parties pertaining to the subject matter contained in these Terms, and these Terms supersede all prior agreements, representations, and understandings of the parties pertaining to the subject matter. It is agreed by the parties that, the Carrier reserves the right to update, revise and change these Terms for non-U.S. trade lanes by way of public notice or any other way informing the Shipper. Any update, revision and change to these Terms for U.S. trade lanes shall be subject to mutual agreement and effective once filed with the FMC.
14. WAIVER
Any failure by either party in exercising any right, power or privilege under these Terms and/or the Contract shall not constitute a waiver, nor shall any single or partial exercise preclude any further exercise of any such right, power or privilege.
15. LAW AND JURISDICTION
For shipments to or from the U.S., any dispute relating to the Contract (for U.S. trade lanes) and these Terms shall be subject to the U.S. Shipping Act of 1984, as amended, and shall otherwise be construed and governed by the statutory and general maritime law of the United States and, to the extent not inconsistent therewith, the laws of the State of New York, except for the choice of law rules of either. The United States District Court for the Southern District of New York is to have exclusive jurisdiction to hear all disputes in respect thereof. In all other cases, Flexible Terms shall be governed by and construed in accordance with English law and any dispute arising shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association Terms current at the time of commencement of arbitration proceedings.
SCHEDULE 1: BOOKING CANCELLATION AND AMENDMENT DETAILS
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Sr. No. |
Booking Amendment/Cancellation |
Description |
Fee Details |
|
1 |
Cancellation |
If the Shipper wishes to cancel shipment of part of or all the goods (except by combining bookings without impacting on the FEE volume originally booked) after the booking confirmation has been issued. |
Cancellation Fee applies. |
|
2 |
No-show (part or all) |
If the Shipper fails to notify the Carrier of cancellation of part or all goods in accordance with Clause 5 or fails to deliver part or all of the goods for shipment. |
No-show Fee applies. |
|
3 |
Change of Destination (COD) Pre-gate in |
Shipper requests to amend the destination/delivery before a container is gated in at the port of origin |
Subject to repricing for ocean and inland. Amendment Fee applies. |
|
4 |
Change of Destination (COD) Post-gate in |
Shipper requests to amend the destination/delivery after a container is gated in at the port of origin |
Subject to repricing. COD Fee applies. DIT follows COD on water process. |
|
5 |
Change of Origin (COO) |
Shipper requests change of origin to an origin stated at the time of contracting. |
Subject to repricing for ocean and inland. Amendment Fee applies. |
|
6 |
Change of Vessel (COV) |
Shipper requests to change shipment to a different vessel/voyage than the one on the original booking confirmation. |
Subject to repricing. Amendment Fee applies. DIT follows COD on water process |
|
7 |
Equipment amendment |
Shipper requests change to equipment size/type |
Subject to repricing of the amended equipment. Amendment Fee applies. |
|
8 |
Equipment addition or amendment resulting in booking total FFE unchanged, or increasing |
Shipper requests to add same size/type equipment, or to change equipment size/type which as a result doesn’t change, or increases the booking total FFE |
Subject to repricing of the amended and/or added equipment. |