D.C. Circuit Expands Ocean Carriers’ Demurrage Billing Authority

In World Shipping Council v. Federal Maritime Commission (D.C. Cir. Sept. 23, 2025), the D.C. Circuit vacated part of the FMC’s 2024 final rule on demurrage and detention billing. The rule had prohibited ocean carriers from billing certain contracting parties (e.g., motor carriers), even where those parties were obligated by contract to bear such charges, yet it allowed ocean carriers to bill consignees regardless of contractual privity. The court held this restriction was “arbitrary and capricious” given the internal inconsistency, noting that “the Commission failed to explain the seeming inconsistency between its contractual-privity-based rationale and its categorical bar against billing motor carriers even when in privity with the billing party.”

As a result, the court vacated all of 46 C.F.R. § 541.4, while leaving the remainder of the billing rule intact. The ruling has significant practical implications, as it gives ocean carriers more flexibility in issuing demurrage and detention invoices.  Ocean carriers can now issue their invoices to multiple parties, inclusive of motor carriers obligated by contract to bear such charges.

The decision can be accessed here.