Appeals Court Overturns FMC's D&D Billing Rule

Miami, FL, USA -- The FMC rule about who should pay detention and demurrage was set aside by the U.S. Court of Appeals for the District of Columbia on September 23, 2025. Specifically, the appellate court said Section 541.4, which defined who may receive a D&D invoice was internally contradictory and thus arbitrary and capricious and invalid under the Administrative Procedure Act (APA).

"Regardless of any uncertainties about whether the Rule permits billing a non-contracting consignee, the Rule’s bar against billing a contracting motor carrier itself suffices to require setting the Rule aside as arbitrary and capricious," Chief Judge Sri Srinivasan opined. Read the Court Decision HERE.

The FMC was quick to point out that ruling only applied to one part of the agency’s entire rulemaking which aimed to better police how detention and demurrage are charged, Michael Angell of Journal of Commerce reported.

The FMC, in a statement to Journal of Commerce, asserted that 30-day deadlines for issuing and contesting the late fees and detailed information on invoices about how detention and demurrage are calculated remain enforceable.

Lawyers at Jones Walker LLP said "importers, exporters, NVOCCs, and motor carriers should continue to scrutinize D&D invoices and assert their rights to dispute charges and seek refunds or waivers."

"Given the high-profile nature of previous D&D rulemaking, any renewed efforts by the FMC in this area will be equally closely watched. In particular, the fundamental question of the physical and notional limits of the FMC’s jurisdiction may be front and center," Julia Bonestroo Banegas, Esq., and Christopher M. Hannan, Esq., at Jones Walker LLP said.

Julie Maurer, Esq., and Benjamin Nashed, Esq., of Husch Blackwell LLP said the appellate court's decision "underscores the need for clear contractual protection and billing protocols to ensure agreements clearly define who must pay detention and demurrage charges."

"Trucking companies should review their haulage agreements and make sure they understand the terms governing detention and demurrage," Husch Blackwell LLP lawyers added.

The World Shipping Council (WSC), a trade association whose members operate approximately 90 percent of the world’s liner vessel services, which filed the petition for the Court of Appeals to review the FMC's order, is willing to collaborate with the FMC on a revised rule that promotes timely container pickup and return, helping to reduce port congestion.

“Consumers, shippers, truckers, port operators, and ocean carriers all benefit from a D&D rule that ensures containers keep moving,” the WSC said in a statement to the Journal of Commerce.