News / Giti takes $12m Flexport legal battle to FMC

© Dragan Andrii |

Relations between Flexport and customer Giti Tires have reached an all-time low.

Earlier this month Flexport filed a $12.3m lawsuit against the shipper, claiming it refused to pay detention and demurrage charges between 2021 and 2023. Now Giti has fought back, claiming to the FMC that Flexport “wrongfully and unreasonably required Giti to pay millions of dollars in unreasonable demurrage and detention charges, as well as millions of dollars of other accessorial charges at unreasonable rates”.

The complaints, mostly concerning shipments to Long Beach, Los Angeles and Savannah, are numerous, and bring Flexport’s invoicing practices into question.

The invoices included freight charges as well as demurrage, detention, storage and “other accessorial” charges.

“Flexport’s conduct and invoices involve multiple, interrelated violations of the Shipping Act. Throughout 2022 and 2023, Flexport issued hundreds of invoices to Giti with detention and demurrage charges that were improperly invoiced by Flexport.”

Giti claimed the invoices failed to outline the detailed information required by the Act, which prevented Giti from determining the validity of individual charges. Invoices with D&D charges were issued for days when ports were closed, or when Flexport had already invoiced the same charges to other parties, such as hauliers. It also claimed some accessorial charges were “excessive in quantum” – four or five times the market rate for equivalent services.

Giti said it had asked Flexport for supporting documentation on the charges, but claimed that the forwarder had refused. Instead, it provided an addendum on the charges, but it did not issue new invoices which met legal requirements.

Giti said it therefore had no way to assess the accuracy of the charges. While Flexport is asking for $12.3m from Giti – and claims that Giti has admitted it owes $7m –  the tire shipper has put in a claim for more than $12.7m.

Giti broke down the charges to: $5.3m in D&D charges on holidays and weekends when ports were closed; $4.5m for charges that lack the required information; $7.2m in “excessive” charges; and $66,675 in duplicate charges already invoiced to other parties. (“The total sum of duplicate charges likely is significantly higher, but Flexport has refused to provide any of the supporting documentation.”)

Giti added that, however, as some of those charges are included in multiple categories, it was only seeking $12.7m.

Giti meanwhile has asked the court to close the case against it, pending the FMC decision. Flexport must respond to the FMC by June 14.

Other forwarders are no doubt moving faster, to see if they can secure a new customer…