Flexport Assessed Millions of Dollars in Unfair D&D, Accessorial Fees, Tire Company Says
Flexport violated U.S. shipping laws by charging unfair detention and demurrage fees and millions of dollars in other "accessorial charges" at unreasonable rates, U.S.-based Giti Tire said in a complaint filed with the Federal Maritime Commission May 16. It alleged Flexport's invoices lacked required information, were "excessive and unreasonable" and duplicated charges also invoiced to another party, leading to $12.7 million in damages.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Giti hired Flexport as a non-vessel-operating common carrier from 2021 to 2023 and shipped containers from an overseas port to a destination designated by the shipper. Many of these shipments came into the U.S. ports of Long Beach, Los Angeles and Savannah, Giti said. Flexport would then invoice Giti for associated charges, including the unfair charges, Giti said.
From 2022 to 2023, Flexport issued "hundreds" of invoices with detention and demurrage charges that were improperly invoiced, Giti said. The invoice lacked the required information for Giti to determine the "basis and validity" of the charges, the shipper said.
The carrier also charged Giti for days when the port was closed, including holidays and weekend days when the container couldn't be returned, the shipper said. These are in violation of the Shipping Act because they don't incentivize container movement or promote cargo fluidity, the complaint said.
Flexport invoiced Giti for detention and demurrage charges that also were invoiced to other parties, such as a motor carrier, that were involved in the shipment, the shipper said.
Many of the carrier's accessorial charges were excessive, in many cases four to five times the market rate for equivalent services, Giti said. This "extreme pricing" is unjust and unreasonable under the Shipping Act, Giti said.
Giti asked Flexport to provide documentation for the invoices so Giti could assess the validity of the charges, the shipper said. The carrier refused to provide the documents and instead provided a document that it called an Ocean Shipping Reform Act "Addendum," Giti said, which "listed a number of invoices and purported to provide the missing data required by the OSRA to be included on invoices for demurrage and detention charges."
The carrier refused to reissue complete invoices to Giti and the shipper still hasn't received invoices from Flexport and refused to "support the validity" of the OSRA Addendum, the shipper said.
Giti asked the FMC to order Flexport to cease and desist from its "unlawful conduct" and pay Giti reparations.
Flexport didn't respond to our request for comment.