Tuesday, July 3, 2012

Top Story

Maersk snags $2.1 billion Defense Department contract

Maersk Line, the largest global container line, has been awarded a $2.1 billion contract to ship U.S. military cargo internationally, according to an announcement released by the U.S. Defense Department on Monday. Shares of parent company A.P. Moller-Maersk rose by 4.1 percent as of 10:00 a.m. Tuesday.

The Defense Department picked Maersk Line for the contract out of 22 proposals received, despite an overcharging dispute, according to Reuters.

The Maersk group has been a shipping line for the U.S. military for decades, a relationship that was hurt when Maersk Line was accused of overbilling for transporting cargo to support American soldiers in Iraq and Afghanistan. In January 2012 the dispute was settled when Maersk said it would pay $31.9 million to settle the claim.

The second biggest contract deal from the U.S. Transportation Command was awarded to American President Lines, an arm of Neptune Orient Lines Group (NOL), in the amount of $1.7 billion, according to the daily contract bulletin from the Pentagon.

The seventh round of "universal service" contracts primarily involve maritime transport, though some ground shipping is included, said Cynthia Bauer, of the Transportation Command at Scott Air Force Base, Illinois to Reuters.

For more of the Reuters story: www.reuters.com

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