Ocean Network Express (ONE) has asked the Federal Maritime Commission (FMC) to dismiss a complaint brought against it by QVC and Cornerstone, filed in June.
The companies alleged that ONE violated the Shipping Act of 1984 by breaching its contract with them. They alleged that despite having pre-contracted space on ONE cargo ships, the shipping company decided to allocate that space to other clients who were willing to pay higher spot rates for the cargo space, in turn causing delays in QVC and Cornerstone’s ability to ship goods as promised and requiring them to pay higher rates to bring their cargo to the final destination.
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According to QVC, ONE “carried only approximately 47.75 percent of its service commitment under the Service Contract, for a shortfall of at least 627 [forty-foot equivalent units] (FEUs)—52.25 percent less than committed.”
QVC said because of that alleged shortfall, it had to pay higher prices from alternative carriers at higher rates, which it stated cost more than $7.7 million during the 2021-2022 shipping year.
For its part, Cornerstone said ONE “carried only approximately 42.4 percent of its service commitment under the Service Contract, for a shortfall of at least 662 FEUs—57.6 percent less than committed,” which allegedly saw the company paying nearly $10.5 million to ship goods overseas with another carrier.
According to the complaint, ONE allegedly sought to capitalize on higher freight prices brought on by the Covid-19 pandemic, in turn “allocating space to the highest bidder also contributed to the inflationary spiral in container rates by artificially increasing demand.”
After receiving an extension from the FMC, ONE filed its response to the complaint on Thursday. In its response, it denied any liability and asked that the FMC dismiss the complaint.
In its response, ONE also asserted affirmative defenses, by saying that the FMC lacks jurisdiction over the complaint because it’s a contract issue; noting that it believes QVC and Cornerstone have not made adequate claims to prove that ONE is in violation of the Shipping Act and claiming that the companies, if they ever had one, lost their right to pursue legal action against ONE because they acted with unclean hands. Those defenses are merely a few in a list of many such defenses, which also see ONE blaming others for any illegal conduct that may have occurred, though it has denied that it acted illegally at all.
“Any damages sustained by the complainants, as alleged in the complaint, were proximately, directly and solely caused by the acts or omissions of others for whom Respondent is not responsible,” attorneys for ONE wrote in the company’s response. “The complainants’ damages, if any, were caused by complainants’, or its agents’ own acts or omissions beyond the control of [ONE].”
The argument that any damages came from third parties or from QVC and Cornerstone itself are the linchpin of ONE’s affirmative defenses, but the slew of such defenses taken together, ONE contended, preclude the companies’ allegations from the hearing they requested in the complaint.
QVC did not immediately return Sourcing Journal’s request for comment on ONE asking the FMC to dismiss the initial complaint.
