Flexport Defeats Peloton’s $33.7M Claim Over Shipping Fees

Flexport has successfully defended itself against a $33.7 million claim filed by Peloton with the Federal Maritime Commission (FMC) over detention, demurrage and storage charges incurred during the pandemic supply chain crisis.

Administrative Law Judge Mary Apostolakos Hervey dismissed Peloton’s amended complaint in its entirety. She found that Flexport had not breached the provisions of the Shipping Act cited by the fitness equipment company and therefore was not responsible for paying reparations.

The case was originally filed in May 2024 and concerned thousands of containers transported on behalf of Peloton during the widespread port and inland logistics disruption between 2020 and 2022.

Peloton was seeking $33.7 million in direct damages. This included approximately $13.8 million in demurrage charges, $16.2 million in equipment detention fees and $3.7 million in yard and warehouse storage expenses.

The company claimed that around $26 million of these costs resulted from Flexport’s actions, without evidence that Peloton itself was at fault. It cited factors including shortages of chassis, delays involving inland carriers, congestion at ports and limited appointment availability.

A significant part of the dispute focused on so-called store-door shipments, in which Flexport was responsible for arranging both the ocean and inland portions of the transportation.

Peloton maintained that Flexport should not simply have passed detention and demurrage charges on to the shipper when the logistics provider was responsible for transporting the containers inland.

Hervey rejected the idea that this could be applied as a general rule. According to the decision, the FMC has never determined that detention and demurrage charges cannot be imposed on store-door shipments. Instead, the judge said the important questions were what caused the delay involving each individual container and whether the resulting charges were reasonable.

The judge concluded that Peloton had not supplied sufficient container-by-container and day-by-day evidence to demonstrate that specific charges were caused by unreasonable conduct on Flexport’s part.

Peloton’s expert analysis partly relied on consolidated invoices covering multiple shipments. Hervey found that these did not provide enough detailed information to determine the cause of each individual delay.

Peloton also disputed invoices issued after the Ocean Shipping Reform Act was passed in 2022. The company claimed that 13 invoices worth a combined $83,390 did not contain information required under the legislation.

However, the judge determined that Peloton had not adequately identified the invoices it claimed were defective or presented sufficient evidence to establish that a violation had occurred.

As a result, Peloton’s amended complaint was denied and the proceeding was discontinued.

The decision comes as disputes continue to reach the FMC over charges imposed during the COVID-era disruption to global logistics.

We earlier reported that Samsung Electronics America is pursuing at least $186 million from CMA CGM in a separate case that also focuses heavily on store-door shipments and responsibility for delays during inland transportation. Samsung has also brought similar cases against HMM, COSCO, SM Line, ZIM, OOCL and Wan Hai.

In reaching her decision in the Peloton dispute, Hervey also referred to the recent case involving Samsung Electronics America and SM Line. That case was cited when outlining the importance of container-specific evidence when deciding responsibility for detention and demurrage charges.

The ruling in the Peloton case remains an initial decision. Either party has 22 days from the date of service to file exceptions. Unless the commission decides to review the ruling, it will subsequently become the FMC’s final decision.