D.C. Circuit Strikes Part of FMC Final Rule on Detention & Demurrage Billing Practices
This week, the D.C. Circuit struck down the section of the Federal Maritime Commission (“FMC”) Final Rule on Detention and Demurrage Billing Practices (the “Final Rule”) that limited the parties to whom detention and demurrage invoices could be issued. On September 23, 2025, the D.C. Circuit issued its opinion in World Shipping Council v. FMC, which left the majority of the Final Rule intact, but ordered that the following provision is no longer in force:
46 C.F.R. § 541.4 Properly issued invoices.
(a) A properly issued invoice is a demurrage or detention invoice issued by a billing party to:
(1) The person for whose account the billing party provided ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo; or
(2) The consignee.
(b) If a billing party issues a demurrage or detention invoice to the person identified in paragraph (a)(1) of this section, it cannot also issue a demurrage or detention invoice to the person identified in paragraph (a)(2) of this section.
(c) A billing party cannot issue an invoice to any other person
In reaching its decision, the D.C. Circuit deemed the Final Rule inconsistent with the FMC’s stated objective of limiting parties against whom detention and demurrage charges could be invoiced to those in a contractual relationship with the billing party. Specifically, the D.C. Circuit took issue with the Final Rule’s exclusion of motor carriers from the category of parties to whom detention and demurrage invoices could be issued. The D.C. Circuit found this exclusion of motor carriers, even when the motor carriers had a contractual relationship with the billing party, inconsistent with the FMC’s stated objective. The D.C. Circuit based its rejection of Section 541.4 on this inconsistency in the FMC’s logic. However, the D.C. Circuit also observed that there were additional inconsistencies in the Final Rule’s inclusion of a consignee as an alternative party against whom detention and demurrage could be assessed, although the consignee may not have contracted with the billing party.
While criticizing the FMC’s restrictions on billing motor carriers, the D.C. Circuit left open the possibility that the FMC could maintain its policy of excluding motor carriers from the category of parties to whom detention and demurrage invoices may be issued if it provided a sufficient rationale. The FMC likely will have to conduct additional rulemaking to revise the restriction on parties that can be billed demurrage and detention charges. In the meantime, issuers of detention and demurrage invoices and those receiving such invoices will not be able to rely on this provision for determining proper detention and demurrage billing practices. Ocean Transportation Intermediaries, importers, and exporters should expect that truckers will once again be receiving detention and demurrage invoices.
GKG Law will continue to monitor the FMC’s response to the D.C. Circuit opinion.
If you have any questions about the impact of the D.C. Circuit opinion on detention and demurrage billing practices and disputes, please contact Rachel Amster.
