Bed Bath & Beyond Accuses Carrier of Unfair Detention, Demurrage, Violating Shipping Act
Ocean carrier Evergreen Shipping Line "systematically" failed to meet its service requirements, pressured its customers to pay "extracontractual prices and surcharges" and charged unfair detention and demurrage, Bed Bath & Beyond said in a Feb. 21 complaint with the Federal Maritime Commission. The former big box retailer specifically accused the carrier of failing to meet minimum quantity commitments as part of a contract and said it took space reserved for Bed Bath & Beyond and instead allocated it to "higher-priced cargo from other shippers."
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Bed Bath & Beyond, which filed for bankruptcy last year, shuttered its physical stores and is identified in the complaint as 20230930-DK-Butterfly-1, alleges that Evergreen violated the Shipping Act in two service contracts: one from July 2020 to July 2021 and one from July 2021 to July 2022. The carrier allegedly provided 20% of the committed space in the first contract and 60% of the committed space in the second contract, the retailer said. The cost to replace these shortfalls was more than $1.4 million for the 2020-2021 shipping year and more than $2.5 million for the 2021-2022 shipping year, Bed Bath & Beyond said.
Evergreen also pressured Bed Bath & Beyond to pay additional "Peak Season Surcharges" or other surcharges to transport its cargo. This was used as a precondition to meet "even a portion" of its service commitment under both contracts, the retailer said. These surcharges caused Bed Bath & Beyond to "overpay" by more than $300,000 combined in both contracts.
The carrier also charged Bed Bath & Beyond over $1.2 million in detention and demurrage. The charges were excessive and "in large part" to penalize the retailer for conditions outside its control, the complaint said, adding that Bed Bath & Beyond's vendors were unable to make appointments to pick up or return Evergreen containers at the ports of Long Beach and Los Angeles. In some cases, they were "turned away" when they tried to access the port, the retailer said.
Bed Bath & Beyond also said Evergreen refused to deal or negotiate because the carrier wouldn't issue a refund for its "unreasonable" detention and demurrage charges and refused to give the retailer its negotiated space as part of its service contracts.
The retailer asked the FMC to investigate Evergreen's conduct and issue orders finding the carrier violated the Shipping Act, compelling Evergreen to stop its conduct, making Evergreen pay Bed Bath & Beyond reparations, and anything else the FMC deems "just and proper."
Bed Bath & Beyond has previously filed complaints with the FMC against other carriers, including against the major ocean carrier Mediterranean Shipping Company in November 2023 (see 2311280049), Orient Overseas Container Line in April 2023 (see 2305010049) and against Taiwan carrier Yang Ming in September 2023 (see 2309180038).
Evergreen didn't respond to a request for comment.