Flexport's Incomplete D&D Invoices Violate Shipping Act, Company Says
Flexport violated the Shipping Act when it failed to include required information on more than $100,000 worth of detention and demurrage charge invoices, Indiana-based Philip Reinisch Co. said in a recent complaint to the Federal Maritime Commission. Philip Reinisch said the FMC should order Flexport to refund more than $55,000 in paid invoices, award it damages for the “wrongful withholding” of containers and nullify nearly $50,000 in outstanding charges.
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Philip Reinisch, a furniture manufacturer, said the violations began after it contracted Flexport, a non-vessel operating common carrier, to ship containers from an overseas port. The company said Flexport sent it 11 invoices in June for detention and demurrage charges totaling more than $50,000, but the invoices didn’t include information required by the Shipping Act, such as the date the container was made available and the start and end date of the free time. The invoices also didn’t include statements certifying that the charges were “consistent” with FMC rules on detention and demurrage or that Flexport’s “performance did not cause or contribute to the underlying invoiced charges.”
Philip Reinisch said it tried to dispute the charges and asked for “additional information regarding how the charges were calculated,” but Flexport “refused to provide further information” unless it paid the invoices. The company also said the carrier held additional containers for Philip Reinisch and “refused to complete delivery” until the detention and demurrage invoices for the other containers were paid.
After the furniture manufacturer said it paid for the additional containers, Flexport told it that the containers were “on hold and were accruing detention charges.” Philip Reinisch said it was “unable to complete” about $83,000 worth of sales because of “Flexport’s failure to complete delivery” of these containers.
Philip Reinisch said “numerous attempts to obtain information from Flexport were unsuccessful” and it “engaged counsel” to send an Aug. 3 letter to the carrier for more information on the invoices. The company said Flexport didn’t respond to the letter.
Flexport eventually credited Philip Reinisch $3,840.47 for one of its invoices, the complaint said, and soon after the manufacturer paid the carrier $56,117.91 to cover the 11 invoices. After Philip Reinisch paid the invoices and Flexport delivered the additional held containers, the carrier sent Philip Reinisch another set of invoices for detention and demurrage charges totaling nearly $50,000 for the second set of containers. Philip Reinisch said the invoices again failed to include information required by the Shipping Act, including free time start and end dates.
Philip Reinisch pointed out that the Shipping Act prohibits carriers from invoicing companies for detention and demurrage charges unless they include certain information and comply with the FMC’s 2020 rule on detention and demurrage (see 2004280072 and 1909130026). The company said the FMC should order Flexport to refund $56,117.91 in paid invoices, plus interest, to Philip Reinisch; award it damages for wrongfully withholding containers and for injuries sustained to its business; nullify $49,643.32 in outstanding charges; and order any “other and further relief as the FMC determines to be just and proper.”
A Flexport spokesperson declined to comment.