FMC Ruling: Marine Terminal Operators Can't Charge Detention and Demurrage Fees on Port Closure Days

In late March, the Federal Maritime Commission made a ruling that has set a precedent in the logistics industry. The case started as a small claims dispute between Nashville-based trucking company TCW and ocean carrier Evergreen Shipping Agency over per diem charges for three days of detention for container and chassis over the Memorial Day weekend when the Georgia Port of Savannah was closed.

The FMC ruled four-to-one in favor of TCW, stating that marine terminal operators cannot impose detention and demurrage charges on days that port facilities are closed. This decision goes against the FMC's 2020 rule establishing that such charges were legal and could be used as an incentive to encourage trucking companies to move freight in a timely manner.

While the decision initially only applied to Evergreen Shipping Agency, the FMC has since announced that it is checking with all ocean carriers to ensure they are in compliance with the TCW decision. At least two carriers have already announced they will comply, but Evergreen has appealed the decision to the US Court of Appeals in Washington, D.C.

The ruling has significant implications for the logistics industry, particularly for motor carriers who often pay the charges upfront and risk being shut out by ocean carriers if they don't pay. It also highlights the importance of timely container returns, especially during supply chain crises when ports are strained and trucking companies are operating at full capacity.