Bankrupt US retail giant Bed Bath & Beyond has filed a $31.7m claim against Orient Overseas Container Line (OOCL).
The troubled US retailer alleges it suffered higher costs over two years because the Hong Kong-based carrier failed to meet its service commitments.
BBB alleges that OOCL failure to perform the minimum quantity commitments (MQC) during the 2020 and 2021 season.
The shipper claims it was “forced to obtain space on the spot market at enormous expense during a period of unprecedented high spot rates”, according to a filing with the US Federal Maritime Commission (FMC) on 27 April.
The company alleged that OOCL, an affiliate of Chinese shipping giant Cosco, had “profited greatly” from its conduct.
The company had to secure an additional 624 forty-foot equivalent units (feu) in 2020 at an additional cost of $2.1m, the filing claims.
Peak season surcharges (PSS) meant it had to pay OOCL a further $7.1m, it added.
For the 2021 season, OOCL is alleged to have carried only 2,432 of 3,796 feu that had been contracted. That forced BBB to fork out a further $9.2m, as well as $6.62m in PSS’s, the filing alleges.
Costs from delays and reduced inventory, with demurrage charges of $4.8m.
In total, BBB is claiming at least $31.68m, in addition to lost profits to be calculated at trial.
Chapter 11
The filing with the US maritime regulator emerged days after BBB applied for Chapter 11 bankruptcy protection in US on 23 April.
The US retailer is planning an “orderly wind down of its business", and expects to close all 475 of its remaining stores by the end of June.
It is also said to be seeking buyers for some or all of its assets.
In a filing to the United States Bankruptcy Court for the District of New Jersey on Sunday, the retailer said "the past twelve months have undoubtedly been the most difficult and turbulent in Bed Bath & Beyond's storied history," the BBC reports.
It added that despite "painstaking, creative, and exhaustive efforts to right the ship along the way, Bed Bath & Beyond is simply unable to service its funded debt obligations while simultaneously supplying sufficient inventory to its store locations," it said.
