FMC Decision Upheld That Detention Fees During Port Closure Are Unfair

The U.S. Court of Appeals for the D.C. Circuit recently issued a decision upholding the Federal Maritime Commission’s (FMC) determination that detention fees levied on a trucker by an ocean common carrier during a three-day port closure were unreasonable. The federal appeals court unanimously denied all aspects of the petition filed by the carrier, Evergreen Shipping Agency (America) Corp., that challenged the FMC’s order, and the court affirmed that detention and demurrage fees must promote freight fluidity.

The case filed at FMC Docket No. 1966(I) concerned detention fees issued to a trucker for its late return of a shipping container and chassis for three days when a port was closed over a holiday weekend and the trucker had no practical ability to return the equipment to the port before the closure. In its Order, the Commission applied its Interpretive Rule on Detention and Demurrage to conclude that Evergreen’s detention fees violated the Shipping Act’s requirement that ocean carriers employ “just and reasonable” practices in handling property. 46 U.S.C. § 41102(c).

The D.C. Circuit fully endorsed the Commission’s application of the Interpretive Rule, which focuses on the extent to which demurrage and detention fees are serving their intended primary purposes as