Flexport Assessed Millions of Dollars in Unfair D&D Fees, Peloton Says

Flexport violated U.S. shipping laws when the logistics company failed to perform its "inland transportation obligations" and charged unfair detention and demurrage fees, Peloton said in a complaint filed with the Federal Maritime Commission May 3. Peloton said it paid "thousands" of improper detention and demurrage charges totaling "millions of dollars."

Peloton said Flexport had been shipping Peloton containers under "store door" terms, where goods are transported from the supplier's facility directly to the buyer's specified location. With store door shipments, the carrier is responsible for paying detention and demurrage relating to container delivery and removal delays, Peloton said.

The company accused Flexport of "repeatedly and chronically failing" to move Peloton's goods to their inland destinations from 2020 to 2023, failing to timely remove containers, failing to timely deliver containers, and failing to timely return empty containers to the ports. Peloton said it had to hire a different third-party logistics provider to manage inland transportation of its containers.

Flexport then began charging Peloton for detention and demurrage for shipments of the containers that Flexport was responsible for, Peloton said. Flexport issued those charges "without first undertaking an evaluation as to whether Flexport was responsible for the charges or whether its acts or omissions were a cause or contributing factor to the charges," Peloton said. The company also said Flexport refused to mitigate, cancel or waive the fees, or "arrange for the extension of free time."

Peloton asked the FMC to order Flexport to cease and desist from its "unlawful conduct" and pay Peloton reparations.

Flexport "strictly complies with the Ocean Shipping Reform Act and all other rules and regulations within the Shipping Act," a Flexport spokesperson said in May 9 email. "We go above and beyond to help all our customers ensure on-time delivery and minimize detention and demurrage charges, especially in times of stress like the supply chain crisis that many businesses faced during the pandemic.”