The U.S. Court of Appeals for the D.C. Circuit has made a key ruling that affects a major part of the Federal Maritime Commission’s (FMC) Final Rule on Demurrage and Detention Billing. While most of the 2024 regulation remains intact, the court struck down one specific section that limited who carriers and marine terminal operators could bill. This decision could influence how invoices are issued and may lead to further regulatory updates in the future.
What the Court Changed
The court specifically targeted Section 541.4, which had restricted who could receive demurrage or detention invoices.
Under the original rule, invoices could only be sent to:
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The contracting party who arranged ocean transportation or cargo storage, or
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The consignee.
The court vacated this entire section, ruling that the FMC cannot enforce these limitations as written.
This means carriers and marine terminal operators are no longer restricted to billing only these two parties. The decision essentially removes a key constraint from the Final Rule, leaving billing responsibilities broader and more flexible.
What Still Remains in Effect
Although one section was struck down, the majority of the FMC’s Final Rule remains fully enforceable.
The remaining rules require:
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Complete and accurate billing information on all demurrage and detention invoices.
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Invoices to be issued within 30 days of the charge.
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No obligation for the billed party to pay if invoice requirements are not met.
Carriers and terminal operators must continue following these rules to avoid violating the Shipping Act.
The court also noted that, although it rejected the invoicing restriction, the FMC could introduce a similar rule again if it provides a stronger legal explanation. This keeps the door open for new rulemaking in the future.
The court’s ruling represents a partial win for shipping carriers, as it removes strict limits on who can be billed for demurrage and detention charges. However, the core consumer-protection elements of the FMC’s Final Rule remain unchanged, ensuring transparency and fairness in billing practices. With the possibility of future rulemaking still open, the maritime industry may see further refinements in billing regulations in the coming years.
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Source: CONTAINER NEWS
