A retailer in the United States has lodged a $37.65 million claim against Orient Overseas (International) Limited, OOCL, on the basis of alleged exploitative and unjust business practices.
The lawsuit follows after New Jersey headquartered Bed Bath & Beyond (BB&B) filed for bankruptcy last week despite attempts to recover from punishing costs related to Covid-19 market disruption.
According to The Loadstar, other shippers have also expressed their displeasure and are filing complaints with the Federal Maritime Commission (FMC).
BB&B claims that despite contracted minimum quantities of cargo to be shipped and corresponding vessel space, OOCL "systematically failed" to meet the requirements and sold the space to higher-paying customers.
BB&B claims that, as result, it was forced to find capacity on the much costlier spot market, "at enormous expense".
It noted that only 70% of the required capacity was provided in 2020, and much of the freight that actually moved was moved only after BB&B agreed to OOCL's demands for exorbitant premium pricing.
Between October 2021 and March 2022, OOCL provided just 52.9% of the contracted space.
BB&B also pointed out that it incurred many detention and demurrage (D&D) charges because it was unable to pick up containers due to congestion, shipping line policies, and other problems, including social distancing orders.
It also complained that surcharges, mainly for peak season, should have been included in its pricing, according to its contract, yet it was still charged.
The filing includes a number of emails from OOCL suggesting BB&B pay more and revealing that "OOCL did not attempt to conceal that it was actively auctioning space to the highest bidder, rather than meeting its service commitment".
In one email, OOCL stated: "We are not looking to gouge, but stating the reality of the current market environment for any extra space.”
BB&B, which is working through its bankruptcy, added that OOCL's container transport business made an operating profit in 2021 of $7.36 billion, up 642% from the previous year.
The retailer has been forced to launch a liquidation sale and said it would use its Chapter 11 bankruptcy proceedings to find outside buyers that may be able to keep the business going, or at least purchase some of its assets.
It has been allowed to borrow $40m to stabilise its operations and begin a sales process.
In January, BB&B reported its third-quarter results, ending 26 November. It made a loss of $100m on net sales of $1.25bn.
