Background
This dispute arose between Evergreen Shipping Agency and TCW, Inc. over detention charges levied for the late return of shipping containers and chassis. TCW was unable to return the equipment due to a three-day port closure and a plant shutdown. The Federal Maritime Commission initially found the charges unreasonable, a decision vacated and remanded by this court in 2024. On remand, the Commission reaffirmed that the charges were unreasonable because they did not promote freight fluidity given the circumstances.
The court’s reasoning
The court found that the Federal Maritime Commission’s Order on Remand was reasonable and supported by substantial evidence. The Commission correctly applied the Interpretive Rule under the Shipping Act of 1984, which focuses on whether detention charges serve their intended purpose of promoting freight fluidity. The court noted that Evergreen conceded key facts, including that the port was closed and Evergreen suffered no costs, which provided adequate grounds for the Commission’s decision.
We now review the Order on Remand that was issued by the Commission following this court’s decision in Evergreen Shipping Agency (America) Corp. v. Federal Maritime Commission.
106 F.4th 1113 (D.C. Cir. 2024)
What it means going forward
The decision reinforces the Federal Maritime Commission’s authority to invalidate detention charges when external factors like port closures prevent the return of equipment, ensuring such charges do not penalize carriers for circumstances beyond their control.