Maersk and terminal operator GCT New York have settled a two-year lawsuit involving the transfer of three Maersk vessel services from GCT to APM Terminals in Elizabeth, NJ.
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On Monday, lawyers for both sides filed a letter to the judge hearing the lawsuit, saying they plan to file a joint motion to dismiss the case. About a month later, lawyers for GCT New York filed a motion for summary judgment against Maersk, alleging the ocean carrier had "willfully breached" its terminal service contract and issued a settlement notice.
Terms of the settlement were not disclosed.
GCT New York, operated by Global Container Terminals, filed a lawsuit against Maersk in New York federal court in April 2020 over Maersk's decision to transfer the service of three vessels that have docked at Staten Island since 2015 to Maersk-owned APM Terminals . near Elizabeth, New Jersey.
GCT New York filed a lawsuit against Maersk on April 20, 2020, over the termination agreement, arguing that the agreement was announced 20 months before the agreement termination date.
In a statement to our publication, the port operator explained that it sought special remedies from the court in the form of an expedited preliminary injunction to avoid termination of disruption to labor, operations and other consequences.
GCT has been fighting Maersk's decision, fearing it would plunge it into a loss and cost the port operator more than 100 jobs.
The deal between the two was first established in 2015 and has since been extended several times.
Maersk announced the move in early April, explaining that the shift was aimed at achieving greater operational efficiency following a recent $200 million upgrade and expansion at APM Terminals Elizabeth.
A company spokesperson confirmed to Offshore Energy that the court rejected the restraining order on Friday, April 24, 2020, allowing Maersk to terminate the agreement from May 1.
Maersk offers termination fee
Maersk argued that it could exit the GCT deal through a clause in the contract that allowed for a termination fee based on expected volume. Maersk said in an April 2020 letter to GCT that it would pay $5.4 million to resolve the dispute.
Despite the loss of those services, GCT New York, like other terminals, has seen its fate amid a surge in U.S. imports over the past 18 months. According to the Port Authority of New York and New Jersey, rents and container throughput at GCT New York are up 53% in 2021.
The available berth space at GCT New York is one reason the port was able to handle more ships and cargo last year. Independent airline Wan Hai Lines launched its Asia-US East Coast route earlier this year and added a second Asia route called GCT New York. MSC has also switched the Asia-West Coast route to GCT New York.
