News / Dispute over warehousing contract yet another legal wrangle for Flexport

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As Flexport is named in yet another million-dollar legal case, perhaps the bigger question is whether Flexport finds itself in court more often than other forwarders – whether as defendant, plaintiff or simply named in an insurance or bankruptcy case.

A back-of-the-napkin calculation shows the simple answer is yes.

A rough comparison with CH Robinson, a far bigger company which, necessarily, will have more court dealings, has an average court case 10.8 times a year, based on The Loadstar calculations. Flexport’s average is 11.8 a year – but by revenue estimates, Flexport is some 16 times smaller than CH Robinson.

So perhaps a better comparison by size would be Crane Worldwide, which on revenues, is about two-thirds of Flexport. However, Crane averages some four court cases a year. Seko Logistics, which is comparable with Flexport by some revenue estimates, sees just three on average.

So yes, Flexport is in court more often than others, given its size. Among other legal battles, it is also currently facing a class action lawsuit by former staff, and is suing customer  Giti Tires.

Meanwhile, the latest battle is with a supplier, warehousing and supply chain services group Unilogic.

Unilogic said it was contracted by Flexport in January 2022 for transloading services. However, since November 2023, Flexport has “failed and refused to make payment to Unilogic”.

It claimed: “There is now due and owing from Flexport to Unilogic … a remaining balance of $991,516.53, plus additional interest, attorneys’ fees, costs and expenses.”

Unilogic also claimed that Flexport entered a new warehouse services agreement in April 2022. Unilogic then provided warehouse services to Flexport between August 2023 through January 2024.

However, Unilogic claims that Flexport “failed to make all of the payments”, of which there is a balance of $121,516.53 (plus additional interest, attorneys fees, and costs).

Flexport, however, last week argued that Unilogic had failed to comply with “multiple” provisions in the agreement. It claimed Unilogic was in breach of the contract for “failing to procure insurance; failing to retain competent personnel; failing to retain personnel who were legally able to work in the United States; failing to conduct background checks on its personnel and those of its subcontractors; failing to comply with the security requirements; failing to provide services in accordance with applicable law; providing services in contravention of applicable laws; and failing to provide the services in a professional and workmanlike manner”.

Unilogic, based in Chicago, has around a million sq ft of warehousing and offers distribution centres, fulfilment and ecommerce services, as well as on-site storage, cross-docking and transloading solutions and drayage. It was named last year as one of the fastest-growing companies in the city.

The case continues.