Midwestern Grocery Chain Countersues XPO, Alleges $12 Million in Damages
Midwestern grocery chain Schnuck Markets has filed a counter lawsuit against XPO Logistics, the warehouse operator it hired to run its Kinloch, Mo., facility but then terminated for operational issues.
The Maryland Height, Mo.-based grocer, in the suit filed in federal court in St. Louis on March 29, accuses XPO Logistics of breach of contract, negligence and fraud for failing to effectively manage the warehouse at the NorthPark distribution center.
In the filing, Schnucks says XPO's failure to operate the warehouse properly has caused more than $12 million in damages.
Greenwich, Conn.-based XPO ranks No. 1 on the TT Top 50 List of largest logistics companies.
The two companies have been locked in a dispute since February, when XPO sued for $1.3 million. XPO's lawsuit alleged the new facility was deficient and had leaking roofs, nonfunctioning employee bathrooms and condensation issues in a produce shipping area.
"These and other deficiencies impeded XPO’s ability to properly perform its warehouse management services," XPO stated in its lawsuit. "The presence of numerous outside contractors at the facility who were continuing to work on these deficiencies further hampered XPO’s ability to properly perform its warehouse management services."
XPO alleged that Schnucks had failed to pay it more than $1.3 million in fees to operate the Kinloch facility. It said it sent a letter to Schnucks on Feb. 8 terminating the agreement; Schnucks replied by accusing XPO of breaching terms of the contract and telling XPO it planned to end the agreement on April 20.
In Schnucks' countersuit, the family-owned grocer alleges numerous operational issues by XPO. Those include failing to properly handle inventory and misplacing pallets or putting pallets in the wrong temperatures zones in the warehouse.
The suit also alleges XPO failed to properly train and supervise employees and staff the warehouse. It also failed to properly prepare items for shipment and did not ship orders in a timely manner, according to the suit. The suit also says XPO lost pallets and damaged merchandise in transit.
XPO refused to compensate Schnucks for damages, according to the suit. "XPO has no excuse for its failures, because XPO had all of the information it needed to comply with the Agreement and properly operate the Facility," the suit states.
A lawyer for XPO could not be immediately reached for comment by the St. Louis Post-Dispatch.
The Schnucks warehouses in Kinloch and Bridgeton serve the chain's 100-store, five-state system. Schnucks has since announced it has contracted with Penske Logistics to run the facility.
