By Eric Huang.    Photo：Pavel Danilyuk

In the post-pandemic era, the severe inflation in various countries has led to global economic turbulence, putting numerous industries to the test, and bringing international transportation back into the spotlight. Bed Bath & Beyond, a US retail giant specializing in home goods, declared bankruptcy due to operational difficulties and filed a lawsuit against Taiwan-based shipping company Yang Ming Line, seeking over $15 million in compensation. This event highlights issues within international logistics, including the fulfillment of shipping contracts, disputes over freight charges, and the impact of customer bankruptcy on the international logistics industry.

In 2022, the US home goods retailer Bed Bath & Beyond announced its bankruptcy and attributed significant damage to its operations to the improper conduct of the international transportation industry during the pandemic. In April of this year, the company lodged a complaint with the Federal Maritime Commission (FMC) in the United States, accusing Orient Overseas Container Line (OOCL) of "coercive" price hikes, "exploitation," and "deliberate" refusal to provide container space. These actions resulted in the retailer incurring approximately $25 million in additional costs, along with around $6.4 million in loading and unloading fees, which the company claimed were a result of OOCL's business practices between 2020 and 2022.

On September 12, the company filed a new complaint with the FMC, seeking compensation exceeding $15 million from Yang Ming Line. This primarily includes refusals of service, high freight charges, as well as demurrage and detention fees incurred in 2021 and 2022. Bed Bath & Beyond alleges that this constitutes a deliberate pattern of shipping misconduct violating relevant shipping laws. The main accusations against Yang Ming Line are that they manipulated container shipping prices, unfairly pressured their customers, and failed to fulfill service commitments as per the original contract. This legal action revolves around an annual service contract that commenced on May 1, 2021, for the transportation of 1,000 forty-foot equivalent units (FEUs). However, Bed Bath & Beyond claims that the carrier did not provide any container space in the contract's first month and admitted to overcommitting to customers. They report that within the contract's 12-month term, Yang Ming Line only transported 149 containers, which is 85% less than the promised volume, resulting in the retailer having to pay over $6.6 million in damages while seeking alternative transportation methods. Furthermore, Bed Bath & Beyond also alleges that Yang Ming Line coerced them into paying nearly $300,000 in surcharges, collected nearly $750,000 in demurrage fees, and $100,000 in detention fees, refusing to refund these charges. The purpose of this legal action is to seek restitution through compensation for the ongoing bankruptcy application.

This case highlights some of the challenges facing the international logistics industry. Firstly, during the pandemic, the container shipping industry experienced significant disruptions, with limited container space and rising transportation costs, putting pressure on cargo owners such as retailers. Many international shipping companies were accused of failing to fulfill contracts and shifting contract container space to the spot market to achieve higher prices. Such actions may cause harm to cargo owners and trigger legal disputes.

Secondly, the impact of customer bankruptcy on the international logistics business is also worth noting. When a company declares bankruptcy, its supply chain and transportation contracts may be affected, further exacerbating logistical issues. In the case of Bed Bath & Beyond, bankruptcy had an adverse impact on its operations, compelling them to seek legal remedies to compensate for their losses.

Lastly, international shipping companies need to enhance transparency and accountability in contract fulfillment and dispute resolution. Many disputes between cargo owners and shipping companies require court intervention, introducing instability into the industry's operations.

International logistics is a critical part of the modern global economy, but it faces various challenges and issues. During the pandemic, misconduct by certain shipping companies and bankruptcies of customers have caused damage to cargo owners, leading to legal disputes. Addressing these problems requires greater transparency, contract enforcement, and accountability to ensure the smooth operation of the international logistics business and provide stable services for global supply chains.

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