On February 23, 2024, the FMC issued its Final Rule on Detention and Demurrage Billing Practices, as required by Congress under the Ocean Shipping Reform Act of 2022. The rule went into effect on May 28, 2024. After the Final Rule was issued, the World Shipping Council, a trade association for vessel-operating common carriers organized under an FMC-filed agreement, appealed the Rule to the U.S. Court of Appeals for the D.C. Circuit, seeking to have it overturned.
On September 23, 2025, the court issued its decision in that case, setting aside just one section of the Rule – 46 C.F.R. 541.4 – which had specified who a demurrage and detention invoice may be sent to. That section of the Rule had limited invoicing to either: (i) the person for whose account the billing party provided ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo, or (ii) the consignee.
It is important for the shipping public to be aware that apart from section 541.4, the rest of the Rule remains in effect and is not impacted by the court’s decision. In other words, all of the provisions of 46 C.F.R. 541 except for section 541.4 are and will remain fully applicable. Common carriers and marine terminal operators must continue to follow these requirements when invoicing for demurrage and detention, or face the risk of being found in violation of the Shipping Act. These provisions include those that require a demurrage or detention invoice to contain accurate and sufficient information and those that impose a 30-day issuance deadline; failure to comply with either of these provisions eliminates any obligation of the billed party to pay the applicable charge.
The FMC notes that the court’s decision does not preclude the Commission from addressing who may be invoiced for demurrage and detention in a future rulemaking. Instead, the court noted that the FMC might elect to maintain the same policy concerning who may be invoiced, so long as it provides a fuller explanation of its reasons supporting that policy. These matters may be addressed in a future rulemaking.
For more information about possible violations of the rules that continue to apply to demurrage and detention billing practices, please visit FMC’s Complaints and Assistance page: Complaints and Assistance – Federal Maritime Commission.
