OOCL Ordered to Pay Record $45.6m in Shipping Case

A US administrative law judge has ruled that Orient Overseas Container Line (OOCL) must pay $45.6 million in reparations to the bankruptcy estate of Bed Bath & Beyond, marking the largest award of its kind in Federal Maritime Commission (FMC) history.

The 203-page decision, issued on April 24 by chief administrative law judge Erin Wirth, found that OOCL breached several provisions of the US Shipping Act. The Hong Kong-based carrier, part of China’s COSCO group, was found to have failed to meet agreed cargo space commitments during the pandemic, retaliated against the shipper after complaints were raised, and refused to deal.

The case focused on claims that OOCL, along with other carriers during the pandemic-driven supply chain crisis, prioritized higher-paying spot market cargo over long-term contract obligations. Bed Bath & Beyond argued that OOCL only provided about 70% of the contracted capacity in 2020, dropping to roughly 53% during parts of 2021 and 2022. This forced the retailer to rely on costly spot rates while it was already facing financial difficulties ahead of its 2023 bankruptcy.

Judge Wirth concluded that OOCL “did not make a good faith effort to make available to BBBY the space which it had promised,” and determined that the violations were “willfully and knowingly committed.” A letter sent by the carrier in October 2022 was cited as evidence of retaliation, with the judge finding it had a threatening tone and influenced later cargo allocation decisions.

Although significant, the $45.6 million award was less than the $165 million initially sought. The judge declined to include claims related to detention, demurrage, and other categories. OOCL had argued that the matter was purely contractual and fell outside FMC authority, but this argument was rejected.

The ruling could have wider implications across the industry. Several major shippers, including Samsung Electronics, QVC, and Dollar General, have filed similar complaints linked to pandemic-era practices involving carriers such as MSC, Evergreen, CMA CGM, and HMM.

Both parties now have 22 days to file an appeal, and the decision may still be reviewed by the full commission.