U.S. appeals court backs FMC on detention fee rules

The U.S. Court of Appeals for the District of Columbia Circuit unanimously rejected a petition filed by Evergreen Shipping Agency (America) Corp., affirming the FMC’s ruling that detention charges imposed during a three-day port closure were unreasonable.

The case involved detention fees charged to a trucking company for the late return of a container and chassis over a holiday weekend when the port was closed, leaving the trucker with no practical opportunity to return the equipment.

The court agreed with the FMC’s interpretation that detention and demurrage charges should primarily serve as financial incentives to improve freight fluidity. Because the trucker could not return the equipment during the closure, the fees did not encourage earlier equipment returns and therefore failed to meet that objective.

The ruling also confirmed that carriers bear the burden of demonstrating that such charges are justified, including providing evidence that the fees reasonably compensate for actual costs when claiming a compensatory purpose.

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