Court Reversal Opens Door to Truckers Demurrage Charges

2 months ago
3Minutes

By Ahsan Ali

Truck drivers might soon be charged extra port fees again after a major court decision overturned a rule that had previously protected them.

The U.S. Court of Appeals for the District of Columbia recently ruled in favor of the World Shipping Council, saying the Federal Maritime Commission (FMC) went too far when it stopped ocean carriers from billing truckers for demurrage fees.

These fees are penalties charged when shipping containers stay at ports longer than allowed.

The judges called the FMC’s decision “arbitrary and capricious,” meaning the agency didn’t provide a clear or logical reason for creating the rule.

They pointed out that the FMC had limited billing for demurrage and detention to companies that had direct shipping contracts, yet excluded trucking companies even when they also had such agreements.

The court’s ruling only affects the part of the 2024 FMC rule that protected truckers from demurrage fees. All other sections of the rule remain in place.

Where the Dispute Began?

The FMC started developing new billing standards in 2020 to make the process fairer and easier to understand.

The final rule, issued in 2024, said that only the company that arranged the shipment or storage — such as a shipper or a non-vessel operating common carrier (NVOCC) — could receive a bill for demurrage or detention.

That rule excluded trucking companies entirely, even if they had a direct agreement — known in legal terms as “privity” — with the ocean carriers involved.

Why the Court Disagreed?

Attorneys Julie Maurer and Benjamin Nashed from Husch Blackwell explained that the court found serious gaps in the FMC’s reasoning.

The judges said the agency never clearly explained why trucking companies with direct contracts could never be billed, while some companies without contracts could be.

The Scopelitis law firm, which focuses on transportation law, also pointed out that the FMC’s policy didn’t make sense.

The agency allowed ocean carriers to send invoices to consignees — the people receiving the goods — even if they didn’t have a contract, but it blocked billing for truckers who actually did.

Scopelitis added that while the court’s ruling removes the ban, it doesn’t mean that truckers will automatically start getting billed. It simply gives ocean carriers the choice to do so.

What Comes Next?

The court noted that many trucking companies have already complained about being billed for demurrage and detention fees by ocean carriers or terminal operators they had no direct relationship with.

Although the World Shipping Council raised several points in its case, the judges mainly focused on one: the FMC’s rule wasn’t consistent with its own logic.

The court agreed and said the agency failed to justify why it treated motor carriers differently from other contracted parties.

For now, the ruling reopens the door for ocean carriers to bill truckers for demurrage fees, though it doesn’t require them to.

The FMC is now expected to review and revise its rule to meet the court’s standards and provide a clearer explanation for its policies.