A federal appeals court has affirmed a landmark Federal Maritime Commission (FMC) decision, confirming that ocean carriers cannot impose detention charges that fail to promote the efficient movement of cargo. In a unanimous ruling, the U.S. Court of Appeals for the D.C. Circuit rejected every challenge brought by Evergreen Shipping Agency (America) Corp. against the FMC order.
The dispute centered on just $510 in detention charges. Georgia trucking company TCW Inc. was billed by Evergreen for equipment it could not return during a three-day Memorial Day 2020 shutdown of the Port of Savannah.
The court agreed with the Commission that these fees violated the Shipping Act's requirement that carriers enforce "just and reasonable" practices. The reason was clear: the trucker had no practical way to return the equipment while the port remained closed, so the charges could not have encouraged an earlier return.
Writing for the court, Senior Circuit Judge Harry Edwards concluded that the charges failed to serve detention's "primary purpose[] as financial incentives to promote freight fluidity." TCW could neither retrieve nor return the equipment while the gates were closed. The court also noted that Evergreen conceded it suffered no costs from the three-day delay.
The ruling reinforces the FMC's 2020 Interpretive Rule on detention and demurrage, which directs the agency to assess whether charges act as incentives to improve freight fluidity rather than as revenue-generating penalties. Absent extenuating circumstances, fees applied when containers cannot be returned are likely unreasonable.
The court rejected both of Evergreen's central claims:
The court found freight fluidity has always been central to the FMC's interpretation, and the Commission was entitled to rely on its expertise. It also clarified that carriers justifying fees on a compensation basis must show the charges reflect actual costs incurred—evidence Evergreen never provided.
The decision is expected to strengthen the FMC's oversight of detention and demurrage billing, a focus since COVID-19 supply chain disruptions triggered widespread complaints over fees that accrued even when equipment could not be moved. The takeaway for carriers and freight forwarders is clear: detention charges must genuinely keep cargo moving, and any compensation-based fees require real supporting evidence.