Every few years, the shipping industry arrives at a moment when rules, responsibilities and commercial expectations collide, and the latest chapter in the United States is one of those moments..

The Federal Maritime Commission’s 2024 Final Rule on demurrage and detention billing was meant to create clarity and fairness across a system that has frustrated shippers, forwarders and truckers for years..

It was a rule shaped by Congress through OSRA 2022, grounded in the need for transparency, and intended to align billing with contractual logic..

But on 23 September 2025, the U.S. Court of Appeals for the D.C. Circuit struck down one key section, the section that determined who carriers and terminal operators are allowed to bill..

And that single change, in my opinion, has the potential to reopen the very uncertainty the FMC was trying to eliminate..

What the FMC originally required

The FMC’s Final Rule introduced strict standards on timing, content, accuracy and transparency..

Critically, Section 541.4 limited who could receive a demurrage or detention invoice:

1. The party that contracted with the carrier for the transport or storage of the cargo or
2. The consignee

That was it.. No third parties.. No intermediaries.. No operational service providers..

The logic was sound.. The party with the contractual relationship is the party with both visibility and the right to dispute, or the consignee who is going to receive the goods.. It drew a straight, clean line of accountability..

What the Court overturned, and why

The Court vacated Section 541.4, not because the idea was wrong, but because the FMC had not sufficiently justified why those two categories made sense under administrative law..

The Court said the Commission’s explanation was inconsistent, for example, allowing consignees (who may not have contractual privity) while excluding motor carriers (who sometimes do)..

So the Court removed the limitation entirely..

It did not replace it with a new rule.. It simply removed the FMC’s boundary..

Everything else in the billing rule remains fully in force.. But the clarity around who can be billed is now gone..

What this overturning means in practice

With Section 541.4 removed, carriers and marine terminal operators may now revert to whatever their bills of lading, service contracts or tariffs allow..

That means the potential return of broader billing practices, including bills issued to intermediaries who were never intended to hold this responsibility..

And this is where the example of the motor carrier (the trucker) becomes important..

Why billing intermediaries like truckers is commercially illogical

The trucker example illustrates the core problem with removing the FMC’s limitation..

A motor carrier is rarely the contracting cargo interest between a carrier and customer.. They are usually appointed by their customer, mostly the buyer/consignee/receiver, whichever term you want to use..

They do not negotiate free time, port availability, vessel schedules, storage terms, or demurrage rules (unless it is different in the USA).. They simply execute a transport order on behalf of:

• the consignee
• the shipper
• the NVOCC or forwarder
• or the carrier themselves if it is a store/door delivery

They rely on instructions from the party that actually owns the commercial relationship with the carrier..

If any billing is appropriate, it should occur between the contracting party and the trucker, not directly from the ocean carrier to the trucker..

There is only one exception, and that is a true carrier haul move, where the ocean carrier hires the trucker directly for inland transport.. In that scenario, the commercial relationship is clear, and billing follows contractually IF the trucker was at fault..

But that is the rare exception, not the everyday reality of merchant haulage..

Why this matters for the entire industry

The FMC rule sought to stop confusion and finger-pointing by ensuring the invoice went to the party with the contract..

The Court did not dispute that logic.. It simply said the FMC must justify it more clearly..

Until the Commission reissues a revised version, the industry faces a risk of returning to old habits, invoices sent to parties without visibility, without contractual leverage, and without any control over the circumstances that triggered the charges..

In other words, the very practices that OSRA 2022 and the FMC were trying to prevent..

My view

The principle remains unchanged.. Demurrage and detention must be billed to the party that controls the contract and the movement of the goods and can challenge the charge..

Intermediaries like truckers should not be dragged into this cycle unless they are directly contracted in a carrier haul move.. It is operationally sound, commercially fair, and consistent with the underlying intent of OSRA 2022..

The sooner the FMC reinstates a clarified version of Section 541.4, the better for everyone involved in the movement of containers..

Hariesh Manaadiar