Court partially vacates FMC demurrage & detention rule
The U.S. Court of Appeals for the D.C. Circuit has issued a decision affecting one section of the Federal Maritime Commission’s (FMC) Final Rule on Demurrage and Detention Billing Practices, originally implemented on May 28, 2024 under the Ocean Shipping Reform Act of 2022.
The Final Rule was challenged by the World Shipping Council, representing vessel-operating common carriers, which petitioned the court to overturn the regulation. In its September 23, 2025 ruling, the court set aside only one provision of the rule—46 C.F.R. 541.4, which specified who carriers and marine terminal operators may invoice for demurrage and detention.
What the Court Changed
Section 541.4 had restricted invoicing to:
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The party who contracted with the billing entity for ocean transportation or cargo storage, or
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The consignee.
The court vacated this section, meaning the FMC may not enforce these limitations as written.
What Remains in Effect
The FMC underscores that all other portions of the Final Rule remain fully enforceable. This includes requirements that:
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Demurrage and detention invoices must contain accurate, complete, and sufficient information;
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Billing entities must issue invoices within 30 days;
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Failure to meet these requirements removes the billed party’s obligation to pay.
Carriers and marine terminal operators must continue to comply or risk violating the Shipping Act.
Future Rulemaking Still Possible
While the court rejected the invoicing restrictions in their current form, it noted that the FMC may pursue a similar policy in the future, provided the agency offers a more detailed explanation supporting its approach. The Commission may revisit this issue in upcoming rulemaking efforts.
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