Shipping Dispute Heats Up: Peloton vs. Flexport

Fitness giant Peloton filed a complaint against the logistics firm Flexport with the Federal Maritime Commission (FMC), accusing it of imposing millions of dollars in unwarranted charges. The complaint states that between 2020 and 2023, Flexport mishandled the transportation of Peloton’s products across the United States, resulting in excessive detention and demurrage (D&D) charges.

According to the filing, Flexport was responsible for transporting Peloton's containers between international and U.S. ports and managing their inland journey, a service known as “store door shipments” or “carrier haulage.” However, Peloton claims that Flexport failed to fulfill these responsibilities efficiently. Issues included delays in removing containers from ports, failing to deliver containers to their intended destinations on time, and not returning empty containers within the stipulated periods.

Due to these failures, Peloton was forced to hire a third-party logistics provider (3PL) to manage the delivery of some of its containers. Despite Flexport’s responsibility for these logistical aspects, Peloton accuses the company of inappropriately charging for services that were poorly managed or unfulfilled.

In response, Flexport stated to FreightWaves, “Flexport strictly complies with the Ocean Shipping Reform Act and all other applicable regulations within the Shipping Act. We go above and beyond to help all our customers ensure on-time delivery and minimize detention and demurrage charges, especially during the supply chain crises that many businesses faced during the pandemic.”

Peloton is the latest company to file a complaint through the FMC in the past two years following the passage of the Ocean Shipping Reform Act (OSRA) in 2022. OSRA has led to several changes in regulations, including adjustments to the rules on D&D charges, aiming to alleviate the burdens previously placed on truckers and other intermediaries. So far this year, there have been claims against CMA CGM, Cosco, FedEx, MSC and OOC

Despite these regulatory efforts to clarify and streamline the billing processes for transportation charges, disagreements persist. The World Shipping Council has expressed concerns that even with the new rules, ambiguities remain that could continue to place undue pressure on truckers and other logistic stakeholders.

The outcome of this Peloton case could influence future dealings and regulations concerning logistic responsibilities and financial accountability in the shipping industry.

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