Court upholds FMC detention authority

The U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Maritime Commission’s position that container detention fees must serve freight movement, not simply accumulate while cargo cannot be returned. The decision, issued April 28, 2026, rejected a petition by Evergreen Shipping Agency (America) Corp. and affirmed an FMC order in a dispute with trucking company TCW Inc. over charges assessed during a three-day Port of Savannah closure. (fmc.gov) The FMC said on July 8 that the court unanimously denied all aspects of Evergreen’s challenge. The ruling leaves in place the commission’s reading of the Shipping Act and its detention-and-demurrage interpretive rule. ### Which case did the court decide? (fmc.gov) Evergreen Shipping Agency (America) Corp. v. Federal Maritime Commission arose from a shipment moved for Yamaha Motor Company, with TCW designated as Yamaha’s preferred trucker for the inland leg between the Port of Savannah and Newnan, Georgia. The D.C. Circuit said the dispute has lasted six years and marked the second time the case reached the appeals court. The court said Evergreen had given TCW 21 days of free time for the container and four days for the chassis, after which detention charges of $150 and $20 per day applied, including weekends and holidays. The later dispute focused on charges billed when the port was closed over a holiday weekend and TCW had no practical ability to return the equipment before the closure. (fmc.gov) ### Why did the FMC say the fees were unreasonable? The FMC said Evergreen’s detention fees did not work as a financial incentive because TCW could not retrieve the equipment from the cargo owner before the port shut down. In the commission’s view, fees imposed during the closure were not encouraging an earlier return and therefore did not advance freight fluidity, which the FMC said is the primary purpose of detention and demurrage charges. (caselaw.findlaw.com) The agency also found the fees were not justified as compensation because Evergreen had not provided enough evidence showing that the charges reflected actual added costs from the late return. The D.C. Circuit affirmed that carriers bear the burden in adjudications to show how a fee serves a compensatory purpose. (fmc.gov) ### What did the appeals court say about the FMC’s authority? The D.C. Circuit said the FMC could rely on its expertise and experience in balancing competing incentives when deciding whether detention and demurrage charges encourage the efficient flow of equipment through the ocean shipping supply chain. The court fully endorsed the commission’s application of its interpretive rule, according to the FMC’s summary of the decision. (fmc.gov) The April 28 opinion followed an earlier appeals-court ruling in 2024, identified by the court as Evergreen I, after which the commission issued an order on remand. In the 2026 decision, the panel of Circuit Judge J. Michelle Childs and Senior Circuit Judges Harry T. Edwards and Douglas H. (fmc.gov) Ginsburg reviewed that remand order and left it in place. ### What does the decision change for carriers, truckers and cargo owners? The FMC said the ruling confirms that detention and demurrage fees must be tied to their intended purpose as incentives to move cargo and equipment efficiently. That gives the agency court-backed support when it reviews billing practices under the Shipping Act’s requirement that carriers use “just and reasonable” practices in handling property. (fmc.gov) For trucking companies and cargo interests, the case provides a cited appellate precedent against charges imposed when return conditions make compliance impractical. For carriers, the decision leaves a record that unsupported claims of compensatory purpose may not be enough in FMC adjudications. That reading is based on the court opinion and the commission’s July 8 statement. (caselaw.findlaw.com) ### Where can disputes go next? The FMC said parties seeking information about possible violations involving demurrage and detention billing can use the agency’s Complaints and Assistance process. The court’s opinion is reported at 174 F.4th 169, and the underlying matter is identified by the commission as FMC Docket No. 1966(I). (fmc.gov)