A significant ruling by a federal appeals court is expected to reshape how one of the most controversial charges in U.S. container shipping is applied.
The U.S. Court of Appeals for the District of Columbia Circuit has unanimously upheld the position of the Federal Maritime Commission (FMC), reaffirming that detention and demurrage charges are intended to promote the efficient movement of cargo—not to serve as an additional source of revenue for ocean carriers.
The case arose after Evergreen Shipping Agency assessed detention fees against a drayage carrier during a three-day port closure, when the carrier had no physical ability to retrieve the container.
The FMC ruled that the charges were unreasonable under the circumstances. Evergreen appealed the decision, but the court rejected the challenge and fully affirmed the Commission’s findings, reinforcing the regulatory principles established under the Ocean Shipping Reform Act.
What This Means for the Industry
The ruling significantly strengthens the legal position of shippers, freight forwarders, and drayage carriers when disputing detention and demurrage invoices.
If a container cannot be picked up due to circumstances beyond the customer’s control—such as a terminal closure, restricted port access, or other operational barriers—detention charges may now be far more difficult for carriers to justify.
The court confirmed that these fees are legitimate only when they actually encourage the timely pickup or return of equipment. When movement is objectively impossible, the charges no longer fulfill their intended regulatory purpose.
Why It Matters
The implications extend well beyond this individual dispute.
For ocean carriers, the decision raises the legal standard for assessing detention and demurrage charges and increases the need to demonstrate that each fee is reasonable and consistent with FMC policy.
For importers, exporters, logistics providers, and drayage companies operating through U.S. ports, the ruling establishes a powerful judicial precedent that is likely to influence future disputes involving detention and demurrage billing.
Ultimately, the decision reinforces the core objective of the Ocean Shipping Reform Act: fees should improve the efficiency of the supply chain—not penalize cargo owners or motor carriers for delays beyond their control.
