US Court Rules in Favor of FMC: Clamping Down on Ocean Carriers' Unreasonable Refusals of Vessel Space

A US federal appeals court has dismissed a lawsuit filed by the World Shipping Council (WSC) against a Federal Maritime Commission (FMC) rule. This regulation clearly defines instances where ocean carriers unreasonably refuse to deal or negotiate vessel space accommodations with shippers.

On March 31, 2026, the D.C. Circuit Court of Appeals officially ruled to dismiss the WSC's petition for review. Previously, the WSC - an organization representing approximately 90% of global scheduled container liner capacity - argued that the FMC's rule exceeded its statutory authority and was arbitrary and capricious. However, the court outright rejected both of these allegations.

Legal Foundation from OSRA 2022

This regulation originates from the Ocean Shipping Reform Act of 2022 (OSRA), enacted by the US Congress primarily in response to fierce complaints from US exporters who struggled to secure vessel space during the pandemic-era supply chain crisis.

OSRA directed the FMC to establish an accurate definition of what constitutes an "unreasonable refusal to deal or negotiate with respect to vessel space accommodations." Following the drafting process, the FMC issued the Final Rule in July 2024.

Ocean Carriers' Transparency Obligations

The new rule establishes a set of reference criteria that the FMC can consider when evaluating whether a carrier's booking refusal is unreasonable. These criteria include:

● Whether the carrier adhered to a documented export strategy or policy.

● Whether the carrier engaged in good-faith negotiations.

● Whether the refusal was based on legitimate transportation factors.

Notably, ocean carriers are now mandated to submit a written export policy to the FMC on an annual basis. This document must transparently detail pricing strategies, offered services, equipment supply capacity, and the markets the carrier serves.

Controversy Over "Unrealistic Freight Quotes"

Alongside the evaluation criteria, the FMC's rule also provides reference examples of commercial behaviors deemed unreasonable.

During the litigation, the WSC fiercely opposed one specific example: an ocean carrier quoting rates excessively above current market levels would be considered a bad-faith offer. Despite objections from carrier representatives, the court ruled that this FMC provision remains entirely valid.

This latest ruling serves as a robust legal foundation, reinforcing the FMC's authority to monitor the commercial conduct of ocean carriers toward shippers on US inbound and outbound trade lanes. Simultaneously, it sets a clear precedent for future inspections and enforcement measures under the OSRA framework.

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Source: Phaata.com (According to Container-News)

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