The FMC: A Maritime Regulator That Regulates After the Damage Is Done

by Dr. Raymon Krishnan, President of The Logistics & Supply Chain Management Society

 

For years, the U.S. Federal Maritime Commission has been held up as an example of what other countries should not have – a ‘dedicated regulator’ overseeing international ocean transportation and protecting shippers from unfair practices. The question is not whether the FMC has powers. It clearly does. The question is whether, after decades of regulation and years of increasingly interventionist activity, it has actually made the ocean freight market meaningfully better for the people who depend on it?

The FMC is much better at creating rules, investigating disputes and redistributing legal risk than it is at fixing the underlying problems of liner shipping and this latest development is an illustration of this.

In September 2026, the FMC formally clarified that there is no three-year limitation period for these Charge Complaints involving carrier charges assessed on or after June 16, 2022, the date the Ocean Shipping Reform Act of 2022 came into force. In other words, a dispute over a charge from 2022 could potentially still be raised years later. This decision leaves carriers exposed to claims that might previously have been considered time-barred, with legal sources suggesting that claims relating to charges from July 2022 could theoretically still emerge in 2032.

The FMC’s answer to a dysfunctional system appears to be to keep the dispute alive indefinitely. That is not the same thing as making the system work.

 

Four years after OSRA, we are still fixing the process

The Ocean Shipping Reform Act was signed into law in June 2022. It was supposed to rebalance the relationship between carriers and cargo interests. Amongst other things, it shifted the burden of proof for detention and demurrage placing the onus on the carrier to establish the reasonableness of the charges. That sounds impressive but look at what has happened since.

The FMC issued its final detention and demurrage billing rule in February 2024, which took effect in May 2024. Then, in 2025, the U.S. Court of Appeals for the D.C. Circuit set aside one part of that rule. In September 2026, the FMC issued another final rule clarifying how charge complaints can be pursued and how the burden of proof applies. Four years after Congress intervened, the industry is still working through the architecture of the complaint process.

A regulator can be busy without being effective.

The FMC has issued rules, advisories, investigations, fact-finding reports, complaint procedures and enforcement actions. Its website proudly lists Fact Finding 28 and Fact Finding 29, among others, covering detention and demurrage, port congestion and supply-chain disruption but activity is not the same as impact.

The latest ruling creates another problem

There is a legitimate argument that shippers particularly smaller companies should not lose the ability to challenge an improper charge simply because they missed a deadline but regulators also has to recognise that businesses need finality. A carrier that issued an invoice, maintained its records, settled the transaction and closed its books now potentially has to retain and defend operational evidence for years because a charge may later be challenged.

The FMC itself effectively acknowledges the documentary burden. Its charge-complaint procedure requires invoices, bills of lading, proof of payment and potentially evidence such as booking denials, gate closures and correspondence. That is not a trivial administrative requirement.

Container movements involve thousands of individual transactions –  bookings, appointments, terminal events, equipment returns, invoices, waivers, emails and operational exceptions. If a regulator cannot establish a reasonable period within which disputes must be brought, it effectively transfers the cost of regulatory uncertainty onto the regulated industry. That may help a shipper with a five-year-old claim but it does not necessarily create a better functioning shipping system.

The fundamental problem still exists

The FMC’s remit is to ensure a competitive and reliable international ocean transportation system and protect the public from unfair and deceptive practices yet the problems facing shippers are not primarily procedural.

They include a raft of issues such as capacity management, schedule reliability, blank sailings, equipment availability, port congestion, transshipment disruption, opaque surcharges, contract compliance, service quality and the extraordinary concentration of the liner industry.

A regulator can adjudicate whether a detention charge was reasonable, order a refund, investigate a carrier’s conduct and it can shift the burden of proof but it cannot make a vessel arrive on time, create container capacity or make a concentrated global liner market competitive. It cannot eliminate the fundamental imbalance between a multinational carrier controlling capacity and a fragmented population of cargo owners negotiating for transportation.

That is the limitation of the FMC model.

The Evergreen case

In July this year, the D.C. Circuit unanimously upheld a FMC decision finding detention charges unreasonable where a port was closed and the trucker had no practical ability to return the equipment. The court also affirmed that carriers bear the burden of providing evidence supporting the reasonableness of such charges.

That is a legitimate regulatory success but the case also demonstrates that the regulator needed a specific dispute and the dispute had to work its way through an administrative and judicial process which ultimately required a federal appeals court to confirm the regulator’s interpretation. That is enforcement after the event and not not structural reform which arguably is what shippers need.

The FMC can be a useful referee when two parties are already in dispute. It is much less convincing as an answer to the structural weaknesses of global liner shipping and that distinction matters enormously for the rest of the world – partucularly BCO’s. The FMC has powers, resources, produces reports,  issues regulations, investigates and adjudicates but the measure of a regulator is not how much regulation it produces. It is whether the market works better because the regulator exists.

The ocean shipping industry does not need another layer of bureaucracy that becomes increasingly expert at resolving yesterday’s disputes. It needs mechanisms that make tomorrow’s supply chains work better and regulating the symptoms is not the same as fixing the disease.