Bankrupt retail giant Bed Bath & Beyond Inc (BBBY) has launched a claim for tens of millions of dollars against Swiss liner giant MSC Mediterranean Shipping Company.
The US organisation — which is currently legally known as DK-Butterfly-1 — is seeking reparations for the cost of shipping cargo during the Covid-19 pandemic.
The shipper alleges that cargoes were not carried by the Geneva-based carrier under service contracts during the pandemic.
It claims that forced BBBY to make alternate transportation arrangements at higher prices or forgo shipping such cargo altogether.
In a complaint to the US Federal Maritime Commission on 28 November, the shipper argued that this resulted “in excess freight charges paid, lost profits, and/or other business damage”.
“MSC’s behaviour has caused significant harm to in numerous ways,” the complaint reads.
In total, the amount being sought in reparations adds up to around $45m in damages, but the cargo owner is seeking twice the amount.
“In light of MSC’s willful retaliatory conduct alleged herein, (BBBY) requests that any award of reparations to be doubled,” it noted.
The shipper alleges that MSC carried 1,686.50, 40-foot equivalent units fewer than it had agreed to under a service contract for the 2021/2022 financial year.
It argues the damage “was extreme and debilitating”, resulting in an additional incremental cost of at least $7.29m.
“As will be proven at trial, in many instances, (BBBY) was unable to mitigate MSC’s failure to honour its service commitments by securing higher-priced freight on the open market and sustained lost profits as a result of the reduction of imported cargo.”
The shipper alleges that it was subject to “unjust and unreasonable” peak season surcharges, premium pricing and other charges.
It claims to have been forced to pay MSC approximately $5.52m over and above the rates that it would have paid under the 2020 service contract and a further $9m in the 2021 service contract.
Demurrage and detention charges are alleged to have added a further $23.2m to that tally.
It claimed some $13.39m were paid in demurrage charges and at least $9.8m in detention charges.
‘Unjust and unreasonable’
The shipper argues that the additional charges “were unjustly and unreasonably assessed”.
The case filed against MSC mirrors those that BBBY has filed against two other liner operators for their service commitments.
In May, the company lodged a $31.7m claim against Hong Kong-based Orient Overseas Container Line.
Then in September, it filed a claim for $7.7m against Taiwanese shipping company Yang Ming Marine Transport.