CSCL is accusing Zim of breaching a container slot cooperation agreement on shipping routes between Asia and North European ports
Foreign media informed last week that a major dispute had erupted between Israel's Zim Integrated Shipping Services and CSCL - China Shipping Container Liners.
The foreign media noted that CSCL is accusing Zim of breaching a container slot cooperation agreement on shipping routes between Asia and North European ports.
In September 2008, Zim and CSCL reached an understanding under which Zim would lease capacity on CSCL container vessels on routes between Chinese and Northern European ports.
Within the framework of the understanding, Zim was due to lease TEU 4,000 (TEU - twenty-foot equivalent units) on China Shipping's weekly service, on which it operates eight large container vessels. Industry sources estimate the value of the agreement at$100-120 million.
Due to heavy drop in demand in the Far Eastern trade Zim decided to pull out of the agreement. In addition, Zim's financial situation is deteriorating; it lost $199 million in the first quarter of 2009, after losing $330 million in 2008 as a whole.
A spokesman for Zim confirmed that CSCL had embarked upon legal dispute with Zim but noted that the company's legal consultants did not see much of a threat to the company.
