Court Overturns Part of FMC Rule Reforming Shipping Penalty Practices
Source
American Shipper
Post Date
10/14/2025
The Court of Appeals for the District of Columbia recently overturned part of a Federal Maritime Commission rule establishing requirements for how shipping lines and port facilities bill for demurrage (fees ged for cargo containers exceeding allotted free time at a terminal) and detention (fees ged for use of carrier-provided containers beyond the allotted free time). Among other things, the rule limited to the following the parties against which such fees may be assessed by vessel-operating common carriers, NVOCCs, and marine terminal operators: (1) those for whose account the ocean transportation or cargo storage is provided and who contracted for those services (typically the shipper), and (2) the consignee (the person to whom final delivery of the cargo is to be made). In a Sept. 23 decision the court struck down this part of the FMC rule while leaving the other parts intact.
The court explained that while the FMC had inted to limit liability for ges to parties in a contractual relationship with the billing party, its rule
(1) prohibits motor carriers from being billed even when they have a direct contract with the ocean carrier and
(2) appears to allow consignees to be billed regardless of whether or not they are in some sort of contractual relationship with the billing party.
According to the court, these contradictions between the rule? logic and application make it arbitrary and capricious under the Administrative Procedures Act.
