A Federal Maritime Commission judge has turned down Peloton Interactive's request to recover $33.7 million from Flexport for detention, demurrage, and related fees.
In a decision made on September 9, Administrative Law Judge Mary Apostolakos Hervey stated that Peloton could not prove that Flexport's actions broke the Shipping Act or caused the losses Peloton claimed. Flexport was not found responsible for any reparations.
This ruling is part of a series of decisions from the FMC related to issues experienced during the pandemic, which included severe port congestion, equipment shortages, and transportation delays, leading to many disputes over detention and demurrage fees.
Peloton filed this case in 2024, arguing that Flexport wrongly charged detention and demurrage on many of their shipments during the pandemic. They claimed Flexport should have covered costs related to chassis shortages, port congestion, and delays in inland transportation.
Peloton aimed to recover $33.7 million, which included $13.8 million for demurrage, $16.2 million for equipment detention, and $3.7 million for yard and warehouse storage fees.
The case hinged on whether Peloton could prove what caused the delays behind each specific charge. Judge Hervey noted that FMC precedent requires individual cases to be examined closely, looking at each container and day.
The judge found that Peloton's analysis did not meet the necessary standards because it relied on general invoices for multiple containers rather than detailing individual charges.
The ruling also dismissed Peloton's claim that Flexport should automatically be responsible for detention and demurrage on "store door" shipments, as there isn’t a universal rule on this; the responsibility depends on the particular circumstances of each delay.
The evidence showed that Peloton also contributed to delays, such as limited warehouse space, late unloading, and containers not being ready when truckers arrived.
Peloton's separate claim alleging that Flexport issued incorrect detention and demurrage invoices after the Ocean Shipping Reform Act of 2022 was also rejected for not clearly identifying the invoices or explaining how they violated the law.
Both parties have 22 days to file exceptions. If the Commission does not review the decision, it will stand as the FMC's final decision.