Photo courtesy Port of Los Angeles<\/p>\n
Appeals Court Backs FMC in Landmark Detention Charges Ruling Against Evergreen<\/p>\n
A federal appeals court has upheld a closely watched\u00a0Federal Maritime Commission\u00a0ruling against\u00a0Evergreen Marine\u00a0over container detention charges, in a decision that could reinforce regulatory scrutiny of carrier fee practices and strengthen the Commission\u2019s \u201cfreight fluidity\u201d standard.<\/p>\n
In a decision issued Tuesday, the\u00a0United States Court of Appeals for the District of Columbia Circuit\u00a0denied Evergreen\u2019s petition for review and upheld an FMC order finding the carrier acted unreasonably by charging a trucker detention fees during a three-day closure of the Port of Savannah.<\/p>\n
The dispute stemmed from a relatively small $510 charge, but the stakes reached far beyond the invoice.<\/p>\n
At issue was whether ocean carriers can impose detention charges when a trucker has no practical ability to return equipment \u2014 a question that has sat at the center of broader industry fights over demurrage and detention since the supply chain turmoil of the pandemic era.<\/p>\n
The court backed the FMC\u2019s conclusion that the charges violated the Shipping Act\u2019s requirement that carrier practices be \u201cjust and reasonable,\u201d and in doing so gave judicial support to the Commission\u2019s view that such fees must do more than simply punish delay \u2014 they must serve their intended purpose of promoting freight fluidity.<\/p>\n
\u201cThe intended primary purpose\u201d of detention charges is to promote freight fluidity, the court wrote, endorsing the Commission\u2019s interpretation that charges imposed when empty containers cannot be returned are \u201clikely to be found unreasonable.\u201d<\/p>\n
The case arose from a 2020 shipment for\u00a0Yamaha Motor Company\u00a0moving through the Port of Savannah. A COVID-related plant shutdown delayed the trucker\u2019s ability to retrieve the container, while a planned three-day port closure prevented its return once it was available. Evergreen assessed detention charges anyway.<\/p>\n
The FMC had ruled those charges unreasonable, finding they could not incentivize faster return under those circumstances. Evergreen challenged that reasoning, arguing the Commission improperly elevated a broader \u201cfreight fluidity\u201d concept over the incentive principle embedded in the FMC\u2019s 2020 interpretive rule.<\/p>\n
The appeals court rejected that argument outright.<\/p>\n
\u201cFreight fluidity has always been integral to the incentive principle,\u201d Judge Harry Edwards wrote for the panel, adding the Commission\u2019s approach was not a departure from the rule but a direct application of it.<\/p>\n
The ruling is notable because it affirms the FMC\u2019s discretion to weigh not just contractual terms or whether free time expired, but whether a charge actually serves a legitimate operational purpose.<\/p>\n
The court also dismissed Evergreen\u2019s argument that contractual agreement alone justified the fees, backing the FMC\u2019s view that carrier contracts remain subject to Shipping Act reasonableness standards. It further noted Evergreen conceded it suffered no costs from the delay \u2014 undercutting any argument the fees were compensatory.<\/p>\n
While the case centers on a narrow fact pattern, maritime lawyers and cargo interests are likely to read it more broadly.<\/p>\n
The decision appears to strengthen the legal footing beneath the FMC\u2019s detention and demurrage enforcement agenda, which has expanded in recent years through rulemakings, investigations and enforcement actions aimed at carrier billing practices.<\/p>\n
For motor carriers, beneficial cargo owners and shippers, the ruling could bolster challenges to fees assessed when operational conditions make compliance impossible.<\/p>\n
For ocean carriers, it may signal courts are willing to give substantial deference to the FMC in disputes over what constitutes \u201cunreasonable\u201d practices under the Shipping Act.<\/p>\n
And for the Commission, it amounts to a significant judicial endorsement of one of its central post-pandemic regulatory doctrines.<\/p>\n
For an agency that has spent years arguing detention charges should improve cargo flow rather than function as revenue generators disconnected from performance, the court\u2019s message was unmistakable: freight fluidity remains the governing principle.<\/p>\n