21-06-2025
QVC and Cornerstone File FMC Complaint Against ONE for Alleged Failure to Fulfill Contract
It's two against ONE—that is to say, two entities are pursuing legal actions against freight carrier Ocean Network Express (ONE).
QVC and subsidiary Cornerstone Brands filed a complaint with the U.S. Federal Maritime Commission (FMC) against ONE on June 11. The complainants allege that ONE violated the Shipping Act of 1984 by contracting a certain amount of cargo space, then informing QVC and Cornerstone that the space was unavailable.
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'[ONE] engaged in a practice of providing only part of the contracted service commitment, to reserve space on its vessels for higher-priced spot market purchases, which resulted in mounting shortages,' QVC and Cornerstone alleged in the complaint.
The companies state that such actions forced them to pay high spot rates to ship their goods via ocean freight in 2021 and 2022, rather than simply receiving the benefit of their pre-contracted rate with ONE.
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.'
As a result of that alleged conduct, QVC contends that it had to pay higher prices from alternative carriers at higher rates, which it states cost more than $7.7 million during the 2021-2022 shipping year.
According to Cornerstone, ONE 'carried only approximately 42.4% of its service commitment under the Service Contract, for a shortfall of at least 662 FEUs—57.6% less than committed,' which allegedly saw the company paying nearly $10.5 million to ship goods overseas with another carrier.
QVC and Cornerstone contend that their logistics teams repeatedly asked ONE for explanations and resolutions, which were met with hesitancy or denial from the freight company.
The complaint emphasizes that ONE's alleged contract breaches took place during a time of unusually high freight prices brought on by the supply chain disruptions resulting from the COVID-19 pandemic. QVC and Cornerstone state that ONE's alleged actions negatively contributed to that price hike, while allowing its own profits to soar to record highs.
'[ONE's] actions in deliberately failing to honor its service commitments and instead allocating space to the highest bidder also contributed to the inflationary spiral in container rates by artificially increasing demand, including by forcing shippers who had already negotiated service contracts into the open market to make up for shortfalls caused by [its] unjust and unreasonable practices,' they wrote in the complaint.
Beyond the allegation that ONE, in the pursuit of profit, illegally gave up space that should have been assigned to QVC and Cornerstone, the companies also alleged that the freight company charged unjust demurrage and detention fees.
The complaint notes that, in the 2021-2022 shipping period, Cornerstone paid $978,784 in these types of fees, while QVC paid $797,835. They argue that such charges were assigned unreasonably and unfairly.
'The charges assessed by [ONE] and paid by [QVC and Cornerstone] were assessed during periods of time in which such charges were not just or reasonable because of circumstances outside the control of complainants and its agents and service providers, such as congestion at ports, lack of appointments to pick up or return containers, and shortage of equipment such as chassis,' they wrote.
Earlier in the complaint, they also note that ONE charged them premium rates after defaulting on portions of the initial contract. For QVC, those fees reportedly amounted to nearly $1.5 million, while Cornerstone paid more than $340,000.
As a result of ONE's alleged conduct, QVC and Cornerstone have asked for a hearing in Washington, D.C. The companies seek 'reparations for the unlawful conduct alleged' in an amount to be determined, as well as an investigation into ONE and an order putting the company's alleged illegal conduct to an end.
ONE did not return Sourcing Journal's request for comment.
