The Federal Maritime Commission (FMC) Chief Administrative Law Judge Erin Wirth ordered Orient Overseas Container Line (OOCL) to pay $45.6 million in reparations in a 203-page initial decision issued April 24. The ruling marks the first major win in a three-year case brought by the bankruptcy estate of US retailer Bed Bath & Beyond, which filed for Chapter 11 in 2023.
At the heart of the case were allegations that ocean carriers sidelined long-term service contracts during the pandemic supply chain crisis to chase higher spot rates and premium surcharges. Judge Wirth found OOCL violated multiple provisions of the Shipping Act through unreasonable practices, service not provided in accordance with contract terms, retaliation, and refusal to deal.
Although well below the $165 million sought, the award sets a significant precedent for ocean shipping contract law in US markets. The FMC sent a clear message that carriers cannot abandon contract obligations when freight markets overheat. Judge Wirth rejected separate claims related to detention and demurrage charges.
The case stems from the 2021-2022 supply chain crisis when Asia-US West Coast spot rates surged. Bed Bath & Beyond alleged that contracted space was progressively displaced as the carrier opened the slots to other importers via open bidding. The ruling becomes final pending full commission approval; OOCL retains the right to appeal.
The outcome could create a strong precedent for other US shippers in bankruptcy estates or those who filed similar pandemic-era complaints against carriers. Industry legal experts say the FMC has expanded the scope of "unreasonable practices" and that major carriers may need to reexamine their post-2026 contracting strategies.
Key Takeaways:
1. FMC Administrative Law Judge Erin Wirth ordered OOCL to pay $45.6 million in reparations in the Bed Bath & Beyond case.
2. The ruling found that the carrier sold off contracted lanes to higher spot-rate buyers during the pandemic.
3. The judge awarded roughly one-third of the $165 million sought; detention and demurrage claims were dismissed.
4. The FMC made clear that contract obligations remain enforceable even when freight markets overheat.
5. The decision becomes final after full commission approval; OOCL retains the right to appeal.
