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Court Overturns FMC’s D&D Billing Limits: WSC Wins Right to Bill Motor Carriers (Sept. 23, 2025)

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The D.C. Circuit Court struck down part of the FMC’s 2024 rule, vacating the restriction that limited detention and demurrage invoices to shippers and consignees. Ocean carriers can now bill trucking companies directly when contracts are in place.

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Background: Why the Case Matters

Detention and demurrage (D&D) fees are penalties applied when containers are not moved or returned within agreed timeframes.

Demurrage applies when containers sit too long at a marine terminal.

Detention applies when containers are held too long before being returned.

These charges are meant to keep cargo flowing and equipment available, but disputes have grown as shippers, consignees, and truckers have all faced unexpected bills. Between 2020 and 2022, carriers collected nearly $7 billion in these fees.

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To address mounting concerns, the Federal Maritime Commission (FMC) issued a rule in 2024 that limited who could legally be billed. The rule confined invoices to:

The shipper (the party contracting for ocean transport), or

The consignee (the final recipient of the cargo).

Motor carriers (truckers) were excluded, even when they had contracts with ocean carriers.

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The World Shipping Council’s Challenge

The World Shipping Council (WSC), representing ocean carriers, appealed the FMC’s rule. Their argument was straightforward:

- The FMC said billing should be based on contractual relationships.

- Yet the rule excluded motor carriers with contracts while allowing consignees with no contracts.

This, WSC argued, made the rule inconsistent and unfair.

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The Court’s Decision

On September 23, 2025, the D.C. Circuit Court agreed with WSC.

• The judges found the FMC’s approach “arbitrary and capricious” because it contradicted its own stated logic.
• The Court vacated the part of the rule that confined billing only to shippers and consignees (46 C.F.R. § 541.4).
• The rest of the rule - covering invoice content, timelines, and dispute procedures - remains in force.

In short, the restriction that barred carriers from billing trucking companies has been removed.

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What Changes Now

The ruling directly affects who may receive D&D invoices:

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1) Motor Carriers (Truckers):

‍Can once again be billed directly by carriers if a contractual relationship exists.

2) Shippers (Importers/Exporters):

‍Still the main party carriers bill, but they are no longer the only option. This may reduce their exposure when truckers are contractually bound.

3) Consignees (Cargo Recipients):

‍Remain eligible to be billed, though the Court noted the FMC never fully explained why they are included without requiring contracts.

4) Carriers and Terminal Operators:

‍Regain flexibility in billing, with authority to direct invoices to contracting motor carriers as well as shippers and consignees.

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Implications for the Industry

-> For shippers: The decision could ease some financial pressure, since carriers may now look to trucking partners under contract.

-> For truckers: This is a major change. After a brief reprieve under the FMC’s rule, they face direct billing exposure again whenever contracts are in place.

-> For consignees: The ruling leaves uncertainty. They can still be billed, but their lack of contractual ties may invite further disputes.

-> For carriers: This restores flexibility but also increases the likelihood of conflicts over who should ultimately bear responsibility.

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Looking Ahead

The ruling does not end the debate over D&D billing. It simply removes the FMC’s blanket prohibition on billing truckers. The Commission may attempt a new rulemaking to better align billing practices with contractual relationships. Until then, shippers, truckers, and consignees should review their contracts carefully and prepare for invoices to be directed in new ways.

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BlueCargo has been on the forefront of reviewing all D&D invoices ever since 2020, making it the legacy tech solution on auditing these fees.

If you are the contractual party with the ocean carrier, or expect to be billed under new allocations, schedule a call with us.

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