News / Flexport under fire as Peloton claims 'unfair D&D fees' cost it millions

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Exercise equipment specialist Peloton is pursuing a claim against Flexport through the Federal Maritime Commission (FMC) for unspecified “millions” of unfair charges.

In a complaint filed last week, the brand which saw major sales of exercise bikes during lockdown, claims Flexport failed to move its US import boxes in a timely manner, leading to “millions of dollars” of detention & demurrage (D&D) charges between 2020 and 2023.

“Flexport repeatedly and chronically failed to properly perform its inland transportation obligations,” the FMC filing alleges.

“Including, failing to timely remove Peloton containers from US marine and intermodal terminals, failing to timely deliver containers to their designated inland locations and failing to timely return the empty containers within the applicable free time periods.”

As a consequence, Peloton claims, it had been forced to use a 3PL to manage the inland intermodal transportation of “certain” boxes.

And Peloton added that “charges and damages [are] continuing to be tabulated as of the filing of this complaint”.

Peloton’s filing continues a stream of claims against carriers and forwarders made through the FMC in the past two years following the passage of the Ocean Shipping Reform Act (OSRA) in 2022. So far this year, there have been claims against CMA CGM, Cosco, FedEx, MSC and OOCL.

Changes brought about by OSRA included pending rules surrounding D&D charges and truckers working on carriers’ behalf.

The rule change was intended to limit D&D billing to contracted parties, which would have lifted a burden that, predominantly, truckers had been facing where, despite not knowing the terms of a contract between cargo owners and carriers, saw them being held responsible for resolving shortfalls between contracted terms and the final invoice.

However, a draft of these changes released last month received short shrift from the World Shipping Council (WSC), which, filing a petition at the US Court of Appeals, said the changes could still leave truckers and intermediaries liable for D&D charges.

Outgoing president John Butler said: “Congress directed the FMC to further clarify its interpretive rule for billing D&D. But the final rule contains a significant internal contradiction regarding the billing of motor carriers for detention and demurrage.

“That inconsistency is already creating substantial confusion and uncertainty for ocean carriers and other industry participants.”