Court Overturns FMC’s Trucking Rule: Navigating the Demurrage Shift

At Gain Consulting, we specialize in demystifying the complexities of ocean freight and supply chain logistics to help businesses avoid costly surprises. A recent U.S. Court of Appeals for the District of Columbia Circuit decision, handed down on September 23, 2025, has overturned a key provision of the Federal Maritime Commission's (FMC) 2024 Demurrage and Detention Billing Requirements rule. As detailed by John Kingston in FreightWaves on October 6, 2025, the court deemed the FMC's exclusion of motor carriers from demurrage billing "arbitrary and capricious."

This ruling, stemming from a challenge by the World Shipping Council (WSC), could reopen the door for trucking companies to face these fees—though it doesn't mandate their use. Here's a breakdown of the decision, its implications, and how Gain Consulting can help you navigate this evolving landscape.

Background: The FMC's 2024 Rule and the Legal Challenge

The FMC's final rule, effective May 28, 2024, aimed to bring clarity and fairness to demurrage (fees for delays at terminals) and detention (fees for delays in returning empty containers) practices amid pandemic-era complaints. It established guidelines for invoicing, including a 30-day billing window and required invoice details, to ensure charges only went to parties with a direct contractual relationship (privity) with ocean carriers or marine terminal operators (MTOs).

However, Section 541.4 of the rule categorically barred billing motor carriers—even those in direct privity with carriers—for these fees. Instead, invoices were limited to the contracting shipper or the consignee (ultimate cargo recipient), regardless of privity for the latter. This created an apparent inconsistency: consignees could be billed without a contract, but truckers with one could not.

The WSC challenged this in World Shipping Council v. Federal Maritime Commission (No. 24-1088), arguing it exceeded the Ocean Shipping Reform Act of 2022 (OSRA 2022) and was arbitrary under the Administrative Procedure Act (APA). The court agreed on the inconsistency, stating: "While the Commission’s basic, stated rationale was to confine the parties against whom demurrage and detention charges may be levied to entities who are in a contractual relationship with the billing party, the Commission, without adequate explanation, left out entities who are in such a contractual relationship while seemingly including others who are not." The court vacated only Section 541.4, leaving the rest of the rule intact. Importantly, as noted by legal experts at Scopelitis Transportation Law, the decision doesn't require carriers to bill truckers—it simply removes the ban.

Key Takeaways from the Ruling

• Relief for Carriers: Ocean carriers and MTOs can now potentially bill motor carriers in privity, addressing complaints about unrecovered costs from delays not caused by truckers.

• No Mandate for Change: Truckers aren't automatically shielded, but carriers aren't obligated to impose fees. This leaves room for negotiation in contracts.

• Broader Rule Stands: Requirements for timely, detailed invoices and dispute processes remain, promoting transparency.

• Pending Developments: The court has withheld its mandate pending any FMC petition for rehearing (due within 45 days of September 23, 2025), so the vacatur isn't fully final yet. Businesses should monitor for updates.

This decision aligns with ongoing FMC efforts to balance "incentive principles" for freight fluidity against reasonableness under the Shipping Act, as seen in related 2025 rulings on terminal closures.

Implications for the Logistics Industry

For shippers, truckers, and carriers, this ruling introduces uncertainty but also opportunities for clearer practices:

• Potential Cost Shifts: Truckers may face renewed demurrage exposure, increasing drayage expenses and potentially raising overall supply chain costs amid 2025's subdued peak season (per DHL forecasts) and transborder shifts (BTS July 2025 data).

• Contractual Privity Matters: Emphasizes the need for explicit terms in ocean-truck agreements to define responsibility for delays.

• Dispute Risks: Without the ban, more billing disputes could arise, but the rule's 30-day invoice limit and required details provide tools for resolution.

• Industry-Wide Impact: Aligns with trends like the DOT's cargo theft RFI (September 2025) and AI adoption in TMS (96% per Descartes survey), urging proactive risk management.

  
  

How Gain Consulting Can Help

At Gain Consulting, our team of logistics experts is equipped to guide you through this demurrage landscape, ensuring compliance and cost efficiency. Here's how we support clients like ocean importers and truckload operators:

• Contract Review and Negotiation: We audit your ocean and drayage contracts to clarify privity and fee responsibilities, preventing surprises post-ruling.

• Billing Compliance Audits: Our specialists ensure invoices meet FMC standards, reducing dispute risks and accelerating resolutions.

• Cost Optimization Strategies: Leverage data analytics to forecast demurrage exposure, integrating AI tools for better delay predictions and carrier selection.

• End-to-End Supply Chain Solutions: From transborder freight (e.g., U.S.-Mexico surges in HS 84-85 commodities) to peak season planning, we minimize delays and fees.

Looking Ahead: Clarity Through Collaboration

The court's overturn of the FMC's trucking exclusion marks a pivotal moment for demurrage practices, restoring balance but highlighting the need for robust contracts and transparency. As the FMC considers rehearing, now is the time to fortify your logistics strategy against these shifts.

At Gain Consulting, we're committed to turning regulatory dilemmas into competitive advantages. Contact us today to discuss how we can safeguard your operations and optimize costs in this evolving environment.

Sources: FreightWaves, “Demurrage dilemma: court overturns FMC’s trucking rule,” John Kingston, October 6, 2025.Additional References: Federal Maritime Commission Final Rule (2024); World Shipping Council v. FMC (D.C. Cir. 2025).