WSC v. FMC: VOCC Can Bill Motor Carrier for D&D

On September 23, 2025, the U.S. Court of Appeals for the District of Columbia Circuit issued a significant opinion in World Shipping Council v. Federal Maritime Commission. The dispute arose from the Federal Maritime Commission’s (FMC) 2024 Final Rule on demurrage and detention (D&D) billing, which limited invoicing to shippers or consignees while explicitly excluding motor carriers. The World Shipping Council (WSC), representing ocean carriers, petitioned for review, arguing that this exclusion was inconsistent with the Commission’s stated reliance on contractual privity as the guiding principle for who may be billed. The Court agreed, concluding that the FMC’s approach was “arbitrary and capricious” because it offered no reasonable explanation for this inconsistency.

The Court emphasized that the exclusion of truckers amounted to inconsistent protection of one class of industry participants. Although motor carriers often contract directly with vessel-operating common carriers, the FMC categorically barred them from being billed, despite its reasoning that contractual privity should be the touchstone for billing eligibility. At one stage in the rulemaking, the FMC even acknowledged that the logic of its rule supported allowing billing of truckers with contracts, only to reverse itself in a later “correction” without any meaningful justification. This contradiction undermined the agency’s rationale and required judicial intervention.

While the Court struck down the restriction on billing truckers, it left intact the FMC’s treatment of consignees. The FMC’s rule permits consignees to be billed for D&D, regardless of whether they are in contractual privity with carriers. The Court acknowledged that this approach raised questions about whether the Rule is “overinclusive” in allowing issuance of an invoice to parties who are not in contractual privity,” but because the WSC did not directly challenge the consignee provision, the Court declined to address this aspect. Instead, it severed the portion of the rule relating to truckers and preserved the rest of the framework, including requirements for invoice content, timelines, and dispute resolution procedures.

The ruling alters the operational landscape for ocean carriers, shippers, and trucking companies. Carriers may now bill motor carriers directly for D&D when a contractual relationship exists, instead of routing charges solely through shippers or consignees. This change reduces reliance on indirect recovery mechanisms and provides carriers with greater flexibility in allocating costs. For trucking companies, however, it introduces new exposure to direct billing and may require adjustments in contract negotiations and pricing structures to manage potential risks.

For shipping businesses, the implications are considerable. Carriers now have clearer authority to hold truckers accountable for D&D costs tied to delays, reducing the burden on shippers and consignees who previously had to absorb charges or attempt recovery indirectly. Shippers in particular benefit from this shift, as they will now have the option to direct billing to alternate parties involved in the supply chain, rather than being automatically responsible when delays were caused by motor carriers.

The broader policy impact of the opinion is to reinforce judicial oversight of agency reasoning. By striking down the exclusion of truckers from D&D billing, the Court confirmed that regulatory classifications must align with the agency’s own stated principles. The FMC retains authority to refine its rules, but any future attempt to exclude motor carriers must be justified with a coherent and consistent approach.

Click the document preview below to read the full opinion on the US Court of Appeals for the DC Circuit's website:

Click here to view the full opinion of the U.S. Court of Appeals for the DC Circuit: World Shipping Council vs FMC, No. 24-1088