Maersk Flexible Contract Version 2-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: Click here to enter text.
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.
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.
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.
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.
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.
As set out under Appendix 1 to this Contract.
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.
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.
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.
As set out under Appendix 1 to this Contract.
As set out under Appendix 1 to this Contract.
Any provision hereof which is prohibited or unenforceable in any jurisdiction shall not invalidate or render unenforceable any other provision of this Contract.
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)
The parties agree that costs for store door service (truck or rail) provided by Maersk Provided Trucking (MPT) will increase or decrease throughout the duration of this Contract to include items in regard to congestion premiums or line hauls changes based on the condition of the respective inland operating environments. In such case, if there is an increase of 5% or more in the CASS Freight Index for linehaul truckload prices (https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/truckload-linehaul-index) against a baseline index as published at the corresponding date of the initial quotation of the contract tender, then the rates under this Contract shall increase or decrease by the CASS Freight index change which triggered the rate adjustment will become the new baseline for any future rate increase or decreases. Carrier will cover associated chassis rental expenses from Carrier-designated market chassis pool up to the number of days separately agreed as Detention Free Time, but makes no commitment in the guarantee of chassis availability. In the event of an operational change to the designated market chassis pool, Carrier will provide written notice to customer (via customer advisory) stating that there are incremental cost increases related to providing chassis, and as a result, Shipper must negotiate a new chassis charge with Carrier or will pay Carrier’s Tariff rate for such charge.
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),
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 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.2
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. 2 (hereinafter referred to as “Flexible Terms v.2” or “Terms”). The definitions set out in the Terms for Carriage and Service Contract Terms are adopted for these Flexible Terms v.2. 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.2 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, rate related information and the Minimum Quantity Commitment (”Contract Output”) which forms a part of these Flexible Terms v.2 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. Shipper’s and Carrier’s respective commitments towards the Minimum Quantity Commitment under these Terms shall only apply within the scope stated in the Contract Output.
2.2 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 VOLUME COMMITMENTS
Shipper’s Minimum Quantity Commitment
3.1 Shipper commits to tendering for carriage a minimum quantity of Forty Foot Equivalent Units (“FFEs”) during the Term (the “Minimum Quantity Commitment”). If Shipper fails to tender the Minimum Quantity Commitment, Shipper may be liable to pay Carrier liquidated damages. For the purpose of calculating properly tendered volumes, the following equivalencies shall apply:
In this table “HC” means a high cube container. “NOR” means a non-operating reefer container.
3.2 The Minimum Quantity Commitment shall be prorated for the number of weeks in the Term to give the “Weekly Volume Nomination”. The Weekly Volume Nomination is an indication of the number of FFEs that Shipper intends to tender for carriage in any given week. Each booking will be allocated to a particular week in the Term (each an “Allocation Week”), and the relevant Allocation Week against which a specific FFE is recorded will be the Allocation Week in which the Proforma Departure Date for the intended sailing falls. The “Proforma Departure Date” is the date on which the relevant vessel is intended to depart the intended loading port per Carrier’s proforma schedule, which Carrier will share with Shipper on request.
3.3 Shipper may tender an amount of FFE from week to week based on an adjustment of the Weekly Volume Nomination by the Flexibility as recorded in the Contract Output.
*By way of non-binding example only, we set out the below hypothetical situation:
Minimum Quantity Commitment from Shanghai to Rotterdam = 5200 FFEs
Term: 52 Weeks
Weekly Volume Nomination= 100 FFEs (5200/52)
Flexibility agreed to be 10% of the Weekly Volume Nomination, i.e., 10 FFEs/week.
Weekly Volume Nomination plus Flexibility= 110 FFEs
Shipper’s Weekly Volume Commitment
3.4 Shipper may place bookings at any time up until seven (7) calendar days in advance of the Estimated Time of Departure of the intended vessel from the intended load port as set out in Carrier’s schedule (the “ETD”). 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”).
3.5 Any booking request made within seven (7) calendar days of the ETD will be considered a booking outside of the Weekly Volume Commitment and accordingly must be made as a request for space under Always Space (see Clause 3.9 below).
3.6 Shipper shall tender the Weekly Volume Commitment for carriage with Carrier before the cut-off time(s) indicated in the booking confirmation.
3.7 If Shipper fails to tender part or all of the Weekly Volume Commitment as booked for any reason whatsoever including, without limitation, cancellation, amendment or no show, such number of FFE not properly tendered or cancelled shall constitute the “Cancelled Volume”. Shipper shall pay Liquidated Damages on the Cancelled Volume in accordance with Clause 5.
3.8 Carrier shall reasonably seek to accept amendments made to any bookings under these Terms, subject always to Carrier’s right to charge amendment fees in Carrier’s discretion and changes to the pricing of any amended bookings that are accepted.
Request for Additional Space
3.9 If Shipper requires additional space in excess of the Weekly Volume Nomination plus the Flexibility, or if the booking request falls outside of the Weekly Volume Commitment because it is made within 7 calendar days prior to the ETD, then Shipper may seek to book such additional space via:
- Maersk.com, via Always Space powered by Maersk Spot; or
- An “Always Space Contract Output”, which sets out the rates for further volumes that may be carried as “Always Space” volumes under these Terms. Carrier may, but shall not be obliged to, provide additional space at the rates stated in the Always Space Contract Output up to 50% of the Weekly Volume Nomination in any given week.
3.10 These Terms shall be subject to the Free Time terms applicable as of the Commencement Date of these Terms.
3.11 The applicable Free Time terms shall be made available by Carrier to Shipper at the time of booking.
4. CARRIER’S COMMITMENTS
Carrier’s Space Commitment
4.1 Carrier shall provide sufficient vessel capacity to carry all cargo actually tendered by Shipper within the Weekly Volume Nomination from week to week.
4.2 Shipper’s sole and exclusive remedy for Carrier’s failure to carry all cargo actually and properly tendered by Shipper within the Weekly Volume Nomination from week to week shall be the payment of liquidated damages as set out in Clause 6.
Carrier’s Loading Target
4.3. Carrier shall endeavour to load the volume accepted for carriage onboard the original first leg ocean going vessel listed in the booking confirmation, always subject to Carrier’s service schedules, service patterns and network constraints.
4.4 If Carrier cannot satisfy a booking on the requested sailing, Carrier expects and intends (without guarantee) to accept such booking on a later sailing.
4.5 Carrier shall not bear any responsibility for refusing to accept a booking or for refusing to load cargo if any of the following apply (each an “Extenuating Circumstance”):
- Shipper’s untimely provision or failure to provide documents necessary for the transportation of Goods or any 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 Shipper or anyone acting on Shipper’s behalf, which may result in or create any hindrance to Carrier’s ability to perform hereunder;
- Any event beyond Carrier’s reasonable control which causes or results in Carrier being unable to perform (in whole or in part), including, but not limited to, 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
- 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.
4.6 Shipper’s volume commitment and Carrier’s space commitment may be split by Carrier into Allocation Grouping(s). An “Allocation Grouping” is a region-based group of load ports and discharge ports, which include the applicable port pairs for that Allocation Grouping. This will often be on a ‘route code’ basis.
4.7 Carrier may, in its sole discretion, offer Shipper to reallocate a portion of Shipper’s Minimum Quantity Commitment from one Port Pair to a different port pair, provided that the new port pair is a part of the same Allocation Grouping as the original port pair. If Carrier does so:
- Carrier shall be under no obligation to carry any cargo provided for by these Terms between the original port pair, if Carrier has offered to carry such cargo between a new port pair within the applicable Allocation Grouping; and
- Shipper is entitled to decline Carrier’s offer to ship cargo between the new port pair, in which case Shipper shall not be required to tender the relevant cargo for the new port pair and Carrier shall not be required to carry them under these Terms.
4.8 The provision of availability between port pairs and provision of 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 change. In such cases, the parties shall seek to agree to reallocate the impacted volumes to an unaffected port pair(s) within 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 Minimum Quantity Commitment in an amount equal to the impacted volume for the affected time period without any further liability for damages from either party.
4.9 The carriage of any volumes reallocated pursuant to Clauses 4.6-4.8 shall be subject to the rates stated in the Contract Output.
4.10 Subject to Clauses 4.11-4.14, Carrier shall provide Shipper with the equipment indicated in the booking confirmation or a reasonable alternative.
4.11 Save for 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.
4.12 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.
4.13 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.
4.14 Carrier shall only provide 45’ equivalent units and non-operating reefer containers (NORs) if it is expressly confirmed in the booking confirmation. Carrier reserves the right to substitute 45’ equivalent units and NORs with FFE and/or 40’HC equivalent units.
5. DAMAGES FOR SHIPPER’S NON-PERFORMANCE
Liquidated Damages for Failure to Tender the Minimum Quantity Commitment
5.1 Shipper’s tendered volumes shall be reviewed by Carrier on an annual basis. The review period is one contractual year, meaning that the first annual review period will be the period between the effective date of these Terms and the first anniversary of the effective date of these Terms.
5.2 If Shipper fails to tender eighty percent (80%) or more of the Minimum Quantity Commitment in any year, the Shipper shall pay to Carrier liquidated damages at the liquidated damages rate set out in the Contract Output (the ”Liquidated Damages Rate”).
5.3 The Liquidated Damages Rate shall be payable per FFE, on the higher of:
- The FFE amount of the Cancelled Volumes, per Clause 3.7; or
- The FFE amount of:
- Eighty percent (80%) of the Minimum Quantity Commitment; LESS
- The number of FFEs properly tendered for carriage during the annual review period (the ”Tendered Volume”).
By way of non-binding example only, we set out the following hypothetical situation:
The Minimum Quantity Commitment is 1,000 FFEs;
80% of 1,000 FFEs equals 800 FFEs;
The Tendered Volume is 600 FFEs; and
The Cancelled Volume is 220FFEs.
In this example, liquidated damages will be charged on the higher of:
- The Cancelled Volume (220FFEs); or
- The difference between 80% of the MQC (800FFEs) and the Tendered Volume (600FFEs), being 200FFE.
The liquidated damages to be assessed would therefore be the applicable Liquidated Damages Rate multiplied by 220.
5.4 For the purpose of any liquidated damages calculation, the Tendered Volume means the actual amount of cargo properly tendered to Carrier for ocean carriage under this Agreement, including:
- Any cargo that fall within the Weekly Volume Nomination as adjusted by the Flexibility that Shipper seeks to tender, but that Carrier is unable to carry; and
- Any cargo booked under the Always Space option, if accepted by Carrier for carriage.
5.5 Shipper shall not be liable to pay liquidated damages for failure to tender the Minimum Quantity Commitment where, with respect to a given cargo:
- it was impossible for Shipper to tender the cargo due to any events beyond Shipper’s reasonable control including, but not limited to, 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
- Carrier has failed to make available a vessel or an alternative vessel due to a blank sailing.
The limitation of liability in this Clause 5.5 is subject to receipt of evidence thereof to Carrier’s satisfaction, and relates only to the specific cargo affected.
6. DAMAGES FOR CARRIER’S NON-PERFORMANCE
6.1 If Carrier fails to make available vessel capacity in accordance with Clause 4.1, Carrier shall be liable to pay to Shipper liquidated damages in accordance with this Clause 6.
6.2 Carrier shall pay liquidated damages to Shipper based on the Liquidated Damages Rate.
6.3 The volume against which the Liquidated Damages Rate shall be calculated is reviewed on an annual basis. The review period is one contractual year, meaning that the first annual review period will be the period between the effective date of these Terms and the first anniversary of the effective date of these Terms.
6.4 Liquidated damages shall be calculated as the Liquidated Damages Rate, multiplied by the number of FFEs derived from the following calculation (if a positive number):
- The total volumes properly tendered for carriage by Shipper within the Weekly Volume Nomination (including any such volumes that Carrier was unable to carry); LESS
- The total volumes carried by Carrier during the annual review period (including any volumes carried within the Flexibility or under Always Space); LESS
- The total volumes properly tendered for carriage by Shipper within the Weekly Volume Nomination that Carrier was unable to carry but which were affected by an ”Extenuating Circumstance” as per Clause 4.5.
By way of non-binding example only, we set out the following hypothetical situation:
Shipper tendered 1000 FFEs for shipment across the review period.
Of those 1000 FFEs:
200 FFEs were booked as a part of the Flexibility; and
100 FFEs were booked via Always Space.
(Carrier carried all 300 FFEs that were part of the Flexibility or booked on Always Space)
Of the 700 FFEs that were a part of the Weekly Volume Nomination, Carrier failed to carry 200 FFEs in accordance with these Terms.
In that situation, the Liquidated Damages Rate would apply to the number of FFEs derived from the following calculation:
700 FFEs – being the 700 FFEs tendered that was a part of the Weekly Volume Nomination
800 FFEs – being the 800 FFEs actually carried by Carrier across the review period (comprising the 200 FFEs that were a part of the Flexibility, the 100 FFEs that were booked on Always Space and the 500 FFEs carried that were booked as a part of the Weekly Volume Nomination)
0 FFE – being the amount to which an Extenuating Circumstance applies.
In this instance, the Liquidated Damages Rate would apply to a negative figure (-100 FFEs), so no liquidated damages would be payable by Carrier.
6.5 The liquidated damages under this Clause 6 are Shipper’s sole and exclusive remedy for any and all failures by Carrier to meet its commitments under these Terms.
6.6 Any liability for loss or damage during carriage shall be subject to and provided for in the Terms for Carriage.
6.7 Notwithstanding any other provision to the contrary in these Flexible Terms or any separate agreement between Shipper and Carrier, Carrier shall in no event be liable whether directly or indirectly to 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 or punitive and/or other extraordinary damages claimed by 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 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.
7. REVIEW, INVOICING AND PAYMENT OF LIQUIDATED DAMAGES
7.1 The Carrier shall conduct an annual review of performance under these Terms and ascertain any shortfall.
7.2 Following the annual review, the invoicing procedure set forth below shall apply to all invoices generated for liquidated damages amounts pursuant to these Terms:
- Invoices for liquidated damages will be submitted on an annual basis in arrears by Carrier to Shipper in an agreed format.
- The invoiced amount will be the result of the total amount of liquidated damages owed by Shipper, if any, LESS the amount of liquidated damages owed by Carrier, if any.
- In the event that the amount of liquidated damages payable by Carrier is more than the total amount of liquidated damages payable by Shipper during any given year, Carrier shall follow a self-billing process and at its sole discretion: (a) issue a credit note in the name of Shipper for the difference in amount; or (b) if at the request of Carrier, Shipper has provided its banking details to 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 favour after the annual review.
- A credit note shall not be issued in favour of Shipper and Shipper shall waive its right to any liquidated damages from Carrier whatsoever if Shipper has overdue invoices outstanding in an amount of more than 10% of the Shipper’s total outstanding invoice amounts.
7.3 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.
7.4 Shipper shall make its payments for any invoice issued by Carrier pursuant to this Clause 7 on the payment due date indicated on the invoice, or in accordance with the separate credit agreement agreed to between the parties (if any).
7.5 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. 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.
9. 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 Minimum Quantity Commitment 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.
10. EMISSIONS REGULATION CLAUSE
10.1 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”).
10.2 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 Flexible Terms. Specifically and without limitation, Shipper agrees that each of the following shall be considered to be an Emissions Regulation under these Terms:
10.2.1 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”;
10.2.2 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
10.2.3 The FuelEU Maritime Initiative, which is proposed to be phased in beginning in the year 2025.
10.3 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.
11.1 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.
11.2 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.
12. 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.
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.
14. 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
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.
Subject to an amendment fee if the amendment is to a booking within the Weekly Volume Commitment.
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.
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
No fee, unless the amendment reduces the amount of cargo (in FFE) to be tendered.
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
Shipper requests change to equipment size/type
Subject to repricing of the amended equipment,
No fee, unless the amendment reduces the amount of cargo (in FFE) to be tendered.
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.