SIMIC

Attorneys for both sides last week submitted a letter to the judge hearing the lawsuit that said they plan to file a joint motion to dismiss the case.

The notice of the settlement comes approximately a month after GCT New York's lawyers filed a motion for summary judgment against Maersk, arguing that the ocean carrier "intentionally breached" the terminal services contract.

GCT New York, operated by Global Container Terminals, filed suit in New York federal court in April 2020 against Maersk due to its decision to move three vessel services that had called GCT New York on Staten Island since 2015 to the Maersk-owned APM terminal in nearby Elizabeth, New Jersey.

In the lawsuit, GCT New York alleged that the loss of the services, one from Europe and two from South America, would cause the terminal's revenue to drop by more than half. GCT claimed that handling the three services accounted for 153 vessel calls and brought in US$52.6 million in total revenue in 2019.

GCT said in the original complaint that in March 2020 it was informed that APM was "attempting to induce" Maersk and its Hamburg Sud subsidiary to end calls at GCT New York, despite their terminal berthing agreement not expiring until the end of 2021.

By the end of March 2020, Maersk had sent two vessels to a "competing terminal", GCT alleged in its lawsuit. Maersk formally alerted GCT New York about ending the calls in an April 2020 letter saying its vessels would cease calls on May 1.

Maersk has argued that it could exit the GCT deal through a clause in the contract allowing for the payment of a termination fee based on expected volumes. Maersk said in an April 2020 letter to GCT that it would pay $5.4 million to settle the dispute.

Despite the loss of the services, GCT New York, as have other terminals, saw its fortunes brighten amid the US import surge over the past 18 months. Rental and container throughput fees from GCT New York rose 53 per cent in 2021, according to the Port Authority of New York and New Jersey.

The available berth space at GCT New York was one reason the port was able to handle more ships and cargo last year. Independent carrier Wan Hai lines, which debuted an Asia-US East Coast service earlier this year, added a second Asia service that calls GCT New York. Mediterranean Shipping Co has also transitioned an Asia-West Coast service to call at GCT New York.