Photo courtesy Port of Long Beach
By Alex Lennane (The Loadstar) –
US retailer Bed Bath & Beyond, which last week filed for bankruptcy protection, has filed a claim of $37.65m against OOCL, alleging exploitative and unjust business practices during the pandemic.
The retailer has filed its complaint with the Federal Maritime Commission (FMC), alongside increasing numbers of other angry shippers.
It’s not hard to see why, from this initial set of complaints. As Bed Bath and Beyond (BB&B) noted, despite contracted minimum quantity commitments of cargo to be shipped and corresponding vessel space, OOCL “systematically failed” to meet the requirements and sold the space on to higher-paying customers, leaving BB&B to find capacity on the much costlier spot market, “at enormous expense”.
In fact, it said, only 70% of the required capacity in 2020 was provided and that “much of the freight 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 many D&D charges were incurred because it was unable to pick up containers owing to congestion, shipping line policies and numerous other problems, including social distancing orders.
It also complained that surcharges, such as for peak season, should have been included in its pricing, according to its contract – yet the retailer was still charged.
The filing includes a slew of emails from OOCL suggesting BB&B pay more and revealing: “OOCL did not attempt to conceal that it was actively auctioning space to the highest bidder, rather than meeting its service commitment.”
One email from OOCL stated: “We are not looking to gouge, but stating the reality of the current market environment for any extra space. Please advise if BBB[Y] would accept a $5,800 per 40ft GP/HQ PSS on top of their primary contract pricing. This would position BBB[Y] at just around the $7,000 mark.”
BB&B, working through its bankruptcy, added that OOCL’s container transport business made a 2021 operating profit of $7.36bn, 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.
The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 105,893 members that receive our newsletter.
Have a news tip? Let us know.
By Rakesh Sharma and Julian Lee (Bloomberg) — India has granted marine insurance approval to four Russian firms, adding impetus to Moscow’s efforts to avoid the use of Western service providers....
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on over a dozen entities, individuals, and ships for their role in the clandestine sale of Iranian unmanned...
By Julia Payne and Kate Abnett BRUSSELS, April 25 (Reuters) – The European Commission’s next sanctions package is expected to propose restrictions on Russian liquefied natural gas (LNG) for the first time,...
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 105,893 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
