Freight Forwarder Illegally Used Containers as ‘Leverage,’ Shipper Says
FormuKleen, a Boca Raton, Florida-based importer in the hospitality industry, accused Miami-based freight forwarder and customs broker Top Shipping Systems (TSS) of violating the Shipping Act by withholding two “high-value” shipments in an attempt to obtain payment for past-due invoices for other shipments, according to a complaint filed this month with the Federal Maritime Commission.
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FormuKleen alleges that TSS refused to deliver the containers this year despite full payment having been made on both. While one container was eventually delivered in February, the other hasn’t been released, FormuKleen said.
“After receiving full payment for the invoices associated with these specific containers, TSS unilaterally and unlawfully withheld release of the containers (with one still being held), not due to any dispute over that shipment but because of outstanding balances on unrelated invoices tied to previous shipments,” the complaint says. “TSS has openly admitted that it did withhold and is withholding release solely as leverage to pressure the shipper into making additional payments on other debts."
By losing access to the containers, FormuKleen said, it incurred excessive demurrage and storage fees, late-payment penalties for customs duties it was not told of in a timely manner, reputational harm due to missed customer obligations, operational disruption from having inventory withheld, and increased product replacement and acquisition costs.
"FormuKleen has been compelled to absorb higher costs, accept lower profitability, and risk customer dissatisfaction and brand dilution, all to mitigate the damage caused by respondent's misconduct," the complaint says. "Because FormuKleen's own goods remain inaccessible, the company has lost the ability to fulfill orders as intended, and is now incurring measurable out-of-pocket costs to avoid complete delivery failure."
FormuKleen urged the FMC to award it "reparations" and to impose "appropriate penalties" on TSS. TSS didn’t respond to a request for comment.