Flexport has filed a motion to dismiss Peloton’s complaint against it to the Federal Maritime Commission (FMC), alleging that Peloton lacks any legitimate evidence that the logistics provider violated the U.S. Shipping Act.
Peloton had alleged Flexport failed to carry out its required duties around timely cargo movement and storage over the course of about three years. In turn, Peloton said in its May complaint, it had received improper demurrage and detention (D&D) charges.
Demurrage charges are used to discourage containers from being stored at ports for long periods of time, and companies pay detention fees when they hang onto a shipper’s containers for longer than the agreed-upon amount of time.
And while Peloton, in its complaint alleged that its wrongly directed D&D charges had amounted to millions of dollars’ worth of fees by the time it filed the complaint, it didn’t provide an exact dollar amount or specific invoices to back up the damages it alleged.
Flexport contends that, in part due to Peloton’s failure to “identify a single specific transaction, bill of lading, invoice or even time frame (other than the period of 2020-2023) in support of its claims,” the FMC should drop the complaint against the shipping technology company.
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It goes on to say that the FMC lacks jurisdiction of the type of claims Peloton’s preliminary complaint would support. That’s because, it argues, the FMC itself stated it lacks the power to oversee questions over who should have paid D&D charges.
Peloton pointed fingers at Flexport, stating in its complaint that its former partner should have been responsible for its D&D penalties.
“Flexport assessed these D&D charges against Peloton and Peloton Containers in circumstances where Peloton was not the party responsible to pick up, move or return the Containers,” the complaint read.
But Flexport’s motion to dismiss sings a different tune, saying that Peloton voluntarily left containers at ports far longer than allowable because of poor planning and inventory mismatch.
“Any alleged service failures and D&D charges were the result of Peloton’s failure to manage the sudden surge and subsequent fall of consumer demand, rather than any actions or inactions on the part of Flexport,” the company argues in the motion to dismiss.
It goes on to say that Flexport warned Peloton that if the company continued to manufacture and import at pandemic rates, Flexport would have nowhere to put the containers when they arrived at port, would not have enough truckers to move the containers and would have nowhere else to move them to. Flexport says that at one time, Peloton had over 100 containers’ worth of one type of merchandise in yard storage, despite not needing the item for consumers. Even when Peloton failed to move the containers, Flexport alleges, it decided to bring in 350 more containers full of product it had no room to store.
Flexport alleges that, despite its warnings “Peloton aggressively and unwisely increased the manufacture and importation of its products” and that, now, on the back of post-pandemic business challenges, “it is now seeking every way it could to claw back money without coming forward with basic supporting facts—for invoices which it never disputed.”
The motion to dismiss says “Flexport simply has no idea what the dispute is about…nor what, exactly, Flexport is alleged to have done wrong” because of Peloton’s lack of clarity in its complaint, compounded by Flexport’s allegation that Peloton seeks a full refund of all D&D charges going back four years.
“Peloton cannot articulate its dispute with Flexport because it is well aware that Flexport went above and beyond what it was required to do to assist Pelton with respect to the transportation, storage and delivery of Peloton’s shipments and to minimize any D&D charges,” the company said in its motion to dismiss.
Flexport said it had no further comment to share on the motion to dismiss, and Peloton did not return Sourcing Journal’s request for comment.