World Shipping Council v. Federal Maritime Commission and United States of America

Uni t ed Stat es Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 13, 2025 Decided September 23, 2025
No. 24-1088
W ORLD SHIPPING COUNCIL ,
PETITIONER
v.
FEDERAL M ARITIME COMMISSION AND UNITED STATES OF
AMERICA ,
RESPONDENTS
On Petition for Review of an Order
of the Federal Maritime Commission
Paul W. Hughes argued the cause for petitioner. With him
on the briefs were Andrew Lyons-Berg and Grace Wallack.
Harry J. Summers, Attorney-Advisor, Federal Maritime
Commission, argued the cause for respondents. With him on
the brief was Phillip “Chris” Hughey, General Counsel.
Tamar Anolic and Courtney E. Mallon, Attorneys, entered
appearances.
Richard Pianka was on the brief for amici curiae
American Trucking Associations, Inc., et al. in support of
respondents.

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Before: SRINIVASAN , Chief Judge, W ILKINS and CHILDS ,
Circuit Judges.
Opinion for the Court filed by Chief Judge SRINIVASAN .
SRINIVASAN , Chief Judge: The world’s shipping lanes
have become increasingly congested. The rise in congestion
has led to a dramatic increase in charges called “demurrage and
detention” fees, through which upstream entities like ocean
carriers penalize shippers, truckers, and others for delays in the
delivery system.
In 2024, the Federal Maritime Commission issued a rule
aimed at addressing growing concerns about demurrage and
detention charges, including by limiting the parties against
whom the fees may be assessed. We now set aside that aspect
of the rule as arbitrary and capricious. While the
Commission’s basic, stated rationale was to confine the parties
against whom demurrage and detention charges may be levied
to entities who are in a contractual relationship with the billing
party, the Commission, without adequate explanation, left out
entities who are in such a contractual relationship while
seemingly including others who are not. We thus set aside that
part of the Commission’s rule while leaving in place the rest.
I.
A.
The maritime shipping of goods involves a web of entities
and agreements. At a high level, a “shipper” is the owner of
the transported cargo. See 46 U.S.C. § 40102(23). A shipper
ordinarily contracts with an ocean carrier—known as a “vessel-
operating common carrier” (VOCC)—for shipment of the
cargo in containers on board a container vessel. See

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Demurrage and Detention Billing Requirements (Final Rule),
89 Fed. Reg. 14330, 14330–31 (Feb. 26, 2024). When the ship
arrives at the relevant port, the port operator—known as a
“marine terminal operator” (MTO)—coordinates unloading
and transfer of containers to a motor carrier (ordinarily a
trucking company). See 46 U.S.C. § 40102(15). The motor
carrier then transports a container over land either to the
shipper or directly to the “consignee,” who is the “ultimate
recipient of the cargo.” Final Rule, 89 Fed. Reg. at 14362.
Once the cargo is unloaded from the container at its destination,
the empty container must be returned to a carrier for use in
another shipment.
In most cases, a shipper contracts directly with an ocean
carrier for shipment of the cargo. That contract is typically
called a “bill of lading,” which “records that a carrier has
received goods from the party that wishes to ship them, states
the terms of carriage, and serves as evidence of the contract for
carriage.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 18–19
(2004).
B.
Contracts for the carriage of goods in maritime often
include provisions for the charging of “demurrage and
detention” fees, usually by ocean carriers or MTOs. See
generally Interpretive Rule on Demurrage and Detention
Under the Shipping Act (Interpretive Rule), 85 Fed. Reg.
29638 (May 18, 2020); see also Evergreen Shipping Agency
(Am.) Corp. v. Fed. Mar. Comm’n, 106 F.4th 1113, 1114–15
(D.C. Cir. 2024). Demurrage and detention charges “serve the
primary purpose of incentivizing the movement of cargo and
promoting freight fluidity.” Demurrage and Detention Billing
Requirements (Advance Notice of Proposed Rulemaking), 87
Fed. Reg. 8506, 8507 (Feb. 15, 2022). The charges arise when

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there is unduly prolonged use of shipping containers or of space
in a marine terminal. See Final Rule, 89 Fed. Reg. at 14362
(defining “Demurrage or detention”). That causes a scarcity of
shipping containers or port space (or both), resulting in
congestion in shipping lanes and delays in the movement of
cargo. Demurrage and detention fees aim to encourage the
availability of containers and port space. See Evergreen
Shipping Agency, 106 F.4th at 1114–15.
Recent years have seen growing concerns about the
amount of demurrage and detention charges and the fairness of
their allocation. In terms of the amount of the fees, “[a]s rising
cargo volumes have increasingly put pressure on common
carriers, port and terminal performance, demurrage and
detention charges have . . . substantially increased.” Id. at
14330. In just the two-year period from 2020 to 2022, for
instance, “nine of the largest carriers serving the U.S. liner
trades individually charged a total of approximately $8.9
billion in demurrage and detention charges and collected
roughly $6.9 billion.” Final Rule, 89 Fed. Reg. at 14330.
In terms of the fairness of the allocation of the fees, there
have been “years of complaints from U.S. importers, exporters,
transportation intermediaries, and drayage [i.e. short-distance]
truckers that ocean carrier and marine terminal operator
demurrage and detention practices unfairly penalized shippers,
intermediaries, and truckers for circumstances outside their
control.” Interpretive Rule, 85 Fed. Reg. at 29638. There have
also been concerns about “a lack of clarity and consistency
regarding demurrage and detention practices, policies, and
terminology.” Id. at 29640. The entities against whom charges
are assessed—such as shippers—are unclear about “what is
being billed by whom.” Final Rule, 89 Fed. Reg. at 14330
(quotation marks omitted). And motor carriers, for their part,
have raised complaints that they have been billed for

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demurrage and detention fees even though they “have no
contractual relationship with the billing parties” (ocean carriers
and MTOs). Demurrage and Detention Billing (Proposed
Rule), 87 Fed. Reg. 62341, 62345 (Oct. 14, 2022). Motor
carriers have further “noted that billing parties sometimes
threatened to prevent [them] from picking up or dropping off
containers due to disputes with one of the motor carrier’s
customers,” resulting in their having to “cover the disputed
charges in order to serve their other customers.” Id.
C.
1.
The Federal Maritime Commission, with support from
Congress, has sought to address the significant and growing
concerns with demurrage and detention charges and practices.
In 2020, the Commission adopted an interpretive rule
providing that, when assessing the reasonableness of those
practices, the Commission generally would “consider the
extent to which demurrage and detention are serving their
intended primary purposes as financial incentives to promote
freight fluidity.” Interpretive Rule, 85 Fed. Reg. at 29666. In
2022, Congress built on the Commission’s interpretive rule in
the Ocean Shipping Reform Act, Public Law 117–146, 136
Stat. 1272. Congress instructed the Commission to “further
clarify reasonable rules and practices related to the assessment
of detention and demurrage charges to address the issues
identified in the” interpretive rule, “including a determination
of which parties may be appropriately billed for any
demurrage, detention, or other similar per container charges.”
Id. § 7(b)(2), 136 Stat. at 1275–76 (codified at 46 U.S.C.
§ 41102 note) (emphasis added).
Later in 2022, the Commission proposed a rule to carry out
Congress’s direction to specify which parties can be assessed

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demurrage and detention charges. Proposed Rule, 87 Fed. Reg.
at 62341, 62346. The Commission noted truckers’ concerns
about being invoiced even though they were not parties to the
shipping contracts and about being forced to cover disputed
charges as a condition of picking up or dropping off containers.
Id. at 62345. To address those sorts of concerns, the proposed
rule adopted an approach under which “only the person who
contracted with the common carrier for the carriage or storage
of goods may be issued an invoice.” Id. at 62349. In the
Commission’s view, the “current system, in which parties who
did not negotiate contract terms with the billing party are
nonetheless bound by them, creates additional confusion and
hardship and exacerbates problems in the supply chain.” Id. at
62348. That is in part because “third parties lack direct
involvement and information” and thus are not “privy to the
demurrage and detention terms negotiated by the parties to the
original contractual agreement” (who are usually the ocean
carrier and the shipper). Id. at 62349. The “proposed rule
should simplify the current system and ensure that only the
person with the most knowledge about the shipment and who
is in the best position to understand and dispute the charge
receives a demurrage or detention invoice.” Id. at 62350.
Even so, the Commission sought comment on one possible
exception to its approach of confining invoices only to parties
“who contracted with the common carrier”: the Commission
asked for input on “whether it would be appropriate to also
include the consignee named on the bill of lading as another
person who may receive a demurrage or detention invoice.” Id.
at 62349–50.
2.
In February 2024, the Commission issued its Final Rule,
which we review in this case. Final Rule, 89 Fed. Reg. at

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14330. As in the proposed rule, the Final Rule maintains the
Commission’s emphasis on the existence of a contractual
relationship between the billing and billed parties. The
Commission characterized its “analytical approach to the rule”
in this way: “using contractual relationships as the basis for
establishing to whom demurrage and detention invoices should
be sent.” Id. at 14339. The Commission accordingly
“determined that prohibiting billing parties from issuing
demurrage and detention invoices to persons with whom they
do not have a contractual relationship will best benefit the
supply chain.” Id. Specifically, if “the billed party has
firsthand knowledge of the terms of its contract, then they are
in a better position to ensure that both they and the billing party
are abiding by those terms.” Id. The Commission, though, also
followed through on the opening it left in the proposed rule to
include consignees as an eligible billed party. Id. at 14340–41.
Codifying that approach, the Final Rule states that a
“properly issued invoice is a demurrage or detention invoice
issued by a billing party to” one of two parties: “(1) The person
for whose account the billing party provided ocean
transportation or storage of cargo and who contracted with the
billing party for” those services (usually the shipper); or “(2)
The consignee.” Id. at 14362. The Rule then reiterates that a
“billing party cannot issue an invoice to any other person.” Id.
The Rule also defines “[b]illing party” as “the ocean common
carrier, marine terminal operator, or non-vessel-operating
common carrier who issues a demurrage or detention invoice.”
Id. And of less relevance here, the Rule sets out the
information billing parties must include in invoices, the
timeframes for their issuance, and the way to dispute the fee.
Id. at 14362–63.

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3.
One comment of note sought clarification from the
Commission related to the Final Rule’s basic premise that
parties in a contractual relationship with a billing party may be
issued invoices. The “commenter requested that the
Commission amend the definition of ‘billed party’ to . . .
account for situations where VOCCs enter directly into written
contracts with motor carriers that use containers in the
transportation of goods.” Id. at 14336. Treating a motor carrier
in such a situation as eligible to be billed, even if consistent
with the spirit of the Rule’s focus on contracting parties, would
be in tension with the letter of the Rule: in setting out who may
be “properly issued . . . a demurrage or detention invoice,” the
Rule states that an invoice can go to “[t]he person for whose
account the billing party provided ocean transportation or
storage of cargo and who contracted with the billing party for”
those services. Id. at 14362. A motor carrier, even if
contracting directly with an ocean carrier, would not be a
“person for whose account the billing party provided ocean
transportation or storage of cargo.” Id. (emphasis added).
Nonetheless, the Commission responded to the comment
by clarifying that a motor carrier in a contractual relationship
with an ocean carrier could be billed:
[A] primary purpose of this rule is to stop
demurrage and detention invoices from being
sent to parties who did not negotiate contract
terms with the billing party. That concern is
not present where a motor carrier has directly
contracted with a VOCC. Nothing in this
rule . . . prohibits a VOCC from issuing a
demurrage or detention invoice to a motor
carrier when a contractual relationship exists

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between the VOCC and the motor carrier for
the motor carrier to provide carriage or storage
of goods to the VOCC.
Id. (emphasis added).
Less than three months after issuing the Rule, however, the
Commission issued a “Correction” in which it clarified that
motor carriers in fact are not billable parties under the Rule
regardless of any contractual relationship with an ocean carrier.
Demurrage and Detention Billing Requirements (Correction),
89 Fed. Reg. 39569, 39569–70 (May 9, 2024). The
Commission stated that it had “received several inquiries
concerning a possible discrepancy between the rule text and
one paragraph in the preamble”—i.e. the paragraph in which it
responded to the comment as quoted above. Id. at 39569. The
Commission “now reiterate[d] that . . . demurrage and
detention should be billed to either the person for whose
account the billing party provided ocean transportation or
storage of cargo and who contracted with the billing party for”
those services, “or the consignee.” Id. at 39570. To that end,
the Commission characterized its seeming deviation from the
strict terms of the Rule in its initial response to the comment as
“inadvertent,” and it sought to “correct[]” the comment
response to convey that motor carriers cannot be billed even if
they are in a contractual relationship with the billing party. Id.
II.
The petitioning party before us, the World Shipping
Council (WSC), raises three challenges to the Final Rule. First,
WSC contends that the Rule is contrary to Congress’s
instructions and the Commission’s statutory authority. Second,
WSC argues that the Rule is arbitrary and capricious for
various reasons, including that it is internally inconsistent.
Third, WSC submits that the Commission violated its

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obligations under the National Environmental Policy Act in
promulgating the Rule.
We agree with WSC’s second argument: we conclude that
the Rule is arbitrary and capricious because the Commission
failed to explain the seeming inconsistency between its
contractual-privity-based rationale and its categorical bar
against billing motor carriers even when in privity with the
billing party. Accordingly, we grant WSC’s petition and set
aside the relevant portion of the Rule. And because we grant
WSC’s petition for review on that basis, we have no occasion
to reach WSC’s other challenges.
A.
We have jurisdiction to review rules issued by the
Commission. See 28 U.S.C. § 2342(3)(B). The Commission,
though, contests WSC’s standing to seek review in this case.
That challenge fails.
WSC is a trade association representing a large share of
ocean carriers who provide maritime carriage. The
Commission submits that WSC’s briefing did not adequately
demonstrate how its members will be tangibly harmed by the
Rule. But “there is ordinarily little question that” a party
regulated by a challenged rule has standing to challenge it.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 561–62 (1992).
WSC’s standing is self-evident: it represents entities who are
undisputedly regulated by the Rule, the entire object of which
is to regulate fees levied by ocean carriers. And at any rate,
WSC has since provided affidavits from members alleging
specific injuries flowing from the Rule. WSC plainly has
standing.

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B.
We review the Commission’s Final Rule under the
Administrative Procedure Act’s arbitrary-and-capricious
standard. See 5 U.S.C. § 706(2)(A). That standard is
deferential, but it is unmet if an agency “relied on factors which
Congress has not intended it to consider, entirely failed to
consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.” Motor Vehicle Mfrs. Ass’n. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983). To satisfy arbitrary-
and-capricious review, an agency must at least reasonably
explain its decision, e.g., FCC v. Prometheus Radio Project,
592 U.S. 414, 423 (2021), and “[o]f course, it would be
arbitrary and capricious for the agency’s decision making to be
‘internally inconsistent,’” Nat. Res. Def. Council v. U.S.
Nuclear Reg. Comm’n, 879 F.3d 1202, 1214 (D.C. Cir. 2018)
(citation omitted). Judged by those criteria, the Commission’s
explanation of the Final Rule falls short.
Throughout the rulemaking process, from the proposed
rule, to the Final Rule, to its defense of the Rule in our court,
the Commission’s central organizing principle has been that
demurrage and detention charges should be assessable
against—and only against—entities in contractual privity with
the billing parties. As the Commission summarized its
reasoning in its briefing to our court, parties to shipping
contracts “would likely have greater knowledge of such
contracts and a greater ability to evaluate and potentially
dispute demurrage and detention charges.” FMC Br. 32; see
also Proposed Rule, 87 Fed. Reg. at 62348–50; Final Rule, 89
Fed. Reg. at 14336, 14338, 14339, 14340, 14341, 14356,
14357; Correction, 89 Fed. Reg. at 39570. The “Commission’s

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analytical approach to the rule,” in short, “us[es] contractual
relationships as the basis for establishing to whom demurrage
and detention invoices should be sent.” Final Rule, 89 Fed.
Reg. at 14339.
Even so, the Rule still prohibits ocean carriers from
invoicing their partners in contractual relationships in one
notable situation: if the billed party is a motor carrier. The
Commission had been advised that “motor carrier[s] often
sign[]” contracts “that obligate [them] to pay detention and
demurrage charges if certain terms of the contract are not met.”
WSC, Comment in the matter of Demurrage and Detention
Billing Requirements (Dec. 13, 2022) (J.A. 213); see, e.g.,
Evergreen Shipping Agency, 106 F.4th at 1115, 1117. Yet
while the Rule otherwise allows invoicing an entity in
contractual privity with the billing party, it does not do so for a
motor carrier. The seeming discrepancy was pointed out to the
Commission, and the Commission gave no reasonable
explanation for it. To the contrary, to the extent the
Commission engaged with whether the Rule’s rationale should
allow for invoicing a motor carrier in privity with the billing
party, the Commission reached the opposite conclusion from
the one dictated by the Rule.
Recall that when a commenter raised the issue with the
Commission, the Commission’s initial response fully endorsed
the understanding that the Rule’s basic logic supported issuing
demurrage and detention charges to truckers in a contractual
relationship with ocean carriers. The Commission went so far
as to say—at least initially—that the Rule should be understood
to allow it. In the Commission’s own words, “a primary
purpose of this rule is to stop demurrage and detention invoices
from being sent to parties who did not negotiate contract terms
with the billing party,” and “[t]hat concern is not present where
a motor carrier has directly contracted with a VOCC.” Final

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Rule, 89 Fed. Reg. at 14336. The Commission felt so certain
on that score that it assured: “Nothing in this rule, either in the
proposed or final version, prohibits a VOCC from issuing a
demurrage or detention invoice to a motor carrier when a
contractual relationship exists between the VOCC and the
motor carrier for the motor carrier to provide carriage or
storage of goods to the VOCC.” Id.
As it happened, though, something in the Rule did prohibit
invoicing a trucker even if it is in a contractual relationship with
an ocean carrier: the terms of the Rule allowed invoicing a
party who “contract[s] with the billing party” for “ocean
transportation,” Final Rule, 89 Fed. Reg. at 14362 (emphasis
added)—not, as the Commission’s response to the comment
had assumed, when a party contracts to “provide carriage”
more broadly—i.e., over land, id. at 14336. And the Rule goes
on to specify that a “billing party cannot issue an invoice to any
other person.” Id. at 14362. The Commission thus issued its
“correction” clarifying that the Rule would not allow ocean
carriers to issue demurrage and detention invoices to motor
carriers with whom they are in contractual privity. Correction,
89 Fed. Reg. at 39570.
Critically for our purposes, however, the Commission’s
brief (less than one full page) clarification nowhere explains
why its initial response—that the central logic of its Rule
should allow for invoicing motor carriers who are in
contractual privity—did not remain entirely persuasive. After
all, in that situation the trucker has precisely the kind of first-
hand information from negotiating the contract that the
Commission views to be vital to allowing imposition of
demurrage and detention fees. Yet the Commission said
nothing in its clarification that calls into question—or even
engages with—the substance of its previous response in that
regard.

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Instead, the Commission summarily “reiterate[d]” that the
Rule allows for billing only “the person for whose account the
billing party provided ocean transportation or storage of cargo”
(or a consignee). Id. But restating the terms of the Rule does
not explain why the logic of the Rule does not extend to
truckers in contractual privity, as the Commission had initially
assumed it did. The Commission also posited in passing that
its jurisdiction may not extend to contracts between ocean
carriers and motor carriers not based on a through bill of lading.
See id. That supposition, too, is unresponsive: the entire object
of the comment was to point out that, even when ocean carriers
and motor carriers contract for the inland transportation of
cargo based on a through bill of lading, the Rule still prohibits
the issuance of demurrage and detention charges against motor
carriers without explanation.
In its brief defending the Final Rule in our court, the
Commission observes that those concerns could be mitigated if
an invoiced shipper or consignee, after being billed for delays
caused by a motor carrier, then sought to recover compensation
from the motor carrier. See FMC Br. 36; Final Rule, 89 Fed.
Reg. at 14336, 14341. WSC, though, disputes that invoiced
shippers or consignees could successfully recover charges from
motor carriers with whom they have no relationship,
contractual or otherwise. WSC Br. 18–19. At any rate,
regardless of the feasibility of recovering invoiced charges
from motor carriers, the existence of that possibility as a
conceptual matter does nothing to explain why the Commission
would prohibit directly billing motor carriers who are in
contractual privity with the billing party—when the “overall
approach” of its Rule relies on “contractual relationships as the
basis for establishing to whom demurrage and detention
invoices should be sent.” Final Rule, 89 Fed. Reg. at 14339.

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In short, when faced with a seeming discrepancy in the
reach of the Rule given its underlying rationale, the
Commission acknowledged—even embraced—the existence
of the evident inconsistency but gave no reasonable
justification for it. None of this is to say definitively that the
Commission could never give a satisfactory explanation for
categorically excluding motor carriers from the field of parties
that may be assessed demurrage and detention fees, should the
Commission opt to maintain that policy. Rather, it is to say that
the Commission has yet to give such an explanation.
That alone suffices to require setting aside the Rule. But
it also bears noting that the Rule raises questions in the opposite
direction as well: while the Rule is seemingly underinclusive
in disallowing issuance of an invoice to a motor carrier who is
in contractual privity with an ocean carrier, there are also
questions about whether the Rule is overinclusive in allowing
issuance of an invoice to parties who are not in contractual
privity. While WSC does not challenge the Rule’s application
to consignees, the Rule raises questions on that score that form
part of the context for judging the soundness of the Rule and of
the Commission’s efforts to explain its reach.
With respect to consignees—“the ultimate recipient of the
cargo”—the Rule expressly allows issuing a demurrage or
detention invoice to them as an alternative to invoicing a
contracting party such as a shipper. Final Rule, 89 Fed. Reg.
at 14362. By the terms of the Rule, the option to bill the
consignee appears to be categorical: the Rule states that a
“properly issued invoice” is one “issued by a billing party
to . . . [t]he consignee,” without qualification. Id. It would
appear not to matter, then, whether the consignee is in some
sort of contractual relationship with the billing party.
Regardless, the consignee can be subject to a demurrage or
detention charge. In that sense, the Rule’s inclusion of

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consignees among eligible billed parties, without regard to
contractual privity, might be seen to stand in some tension with
the Commission’s focus on the existence of a contractual
relationship as a necessary precondition for assessing
demurrage or detention fees.
There may well be sound explanations for allowing billing
of consignees even absent privity, but the Commission’s
account of its decision to include consignees—which is found
in the Rule’s preamble—does not attempt to provide one. To
the contrary, that account—somewhat confusingly—says that
the Rule “allow[s] consignees to be billed as an alternative to
the shipper when the consignee is the party contracting for the
shipping.” Id. at 14340 (emphasis added). In other words, “it
is the consignee’s contractual privity . . . that determines
whether the consignee can be billed.” Id. Yet there is no
indication in the Rule itself that the option to bill consignees is
confined in that way.
The Rule seems quite clearly to indicate otherwise: it first
gives the option of invoicing a party “who contracted with the
billing party for . . . ocean transportation or storage of cargo”—
i.e., a contracting shipper, and it then gives the fallback option
of billing “[t]he consignee,” with no comparable limiting
language requiring that the consignee “contracted with the
billing party.” Id. at 14362 (emphasis added). To the same
effect, in the preamble discussion immediately following the
Commission’s seemingly confusing statements that consignees
can be billed only if they are in contractual privity, the
Commission characterizes the Rule as follows: “Outside of the
exception for consignees, billing parties must not send invoices
to third parties,” a statement that assumes that billed consignees
are “third parties”—i.e., non-contracting parties. Id. at 14341.
In the end, there would seem to be questions about the reach of
the Commission’s inclusion of consignees as a billing option.

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Ultimately, regardless of any uncertainties about whether
the Rule permits billing a non-contracting consignee, the
Rule’s bar against billing a contracting motor carrier itself
suffices to require setting the Rule aside as arbitrary and
capricious. And because petitioners draw no distinction among
their various challenges to the Rule in terms of the relief they
seek, and in light of petitioners’ confirmation in oral argument
that they see no reason to reach their other grounds for
invalidating the Rule if they prevail on their arbitrary-and-
capricious claim, see Oral Argument at 10:50–11:13, 53:39–
54:14, we have no need to consider petitioners’ other
challenges.
C.
As for the remedy, we are unable to grant the
Commission’s suggestion of a remand without vacatur because
the Rule’s invalidity does not stem from a minor procedural
error and because the agency has not provided evidence of
significant disruptive effects from a vacatur. See FMC Br. 41
n.5. At the same time, there is no need to invalidate the Rule
in its entirety given the scope of WSC’s challenge. Instead, we
will sever the challenged portion of the regulation—46 C.F.R.
§ 541.4, which confines the field of properly billed parties to
contracting shippers or consignees—and leave the remainder
of the regulation intact. See, e.g., Carlson v. Postal Regul.
Comm’n, 938 F.3d 337, 351 (D.C. Cir. 2019).
In assessing whether a rule can be severed in that kind of
fashion, we first ask whether “the agency would have adopted
the same disposition regarding the unchallenged portion [of the
regulation] if the challenged portion were subtracted.” Sierra
Club v. FERC, 867 F.3d 1357, 1366 (D.C. Cir. 2017) (citation
omitted). Here, the answer is yes. Especially in light of the
Commission’s initial assumption that the Rule did not

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categorically bar the billing of motor carriers, there is good
reason to believe it would have adopted the remainder of the
Rule regardless of the description of who can be billed in
§ 541.4. The remaining provisions in the Rule, moreover, do
meaningful work: they set out the information that must be
included in invoices and the timeline and procedures for
dispute resolution, all of which the Commission considered to
be important and productive aspects of the response to the
substantial concerns about demurrage and detention practices.
Final Rule, 89 Fed. Reg. at 14362–63.
Second, we assess whether the remaining parts of the Rule
would “function sensibly without the stricken provision.”
Sorenson Commc’ns. Inc. v. FCC, 755 F.3d 702, 710 (D.C. Cir.
2014) (quoting MD/DC/DE Broads. Ass’n v. FCC, 236 F.3d
13, 22 (D.C. Cir. 2001)). That requirement, too, is satisfied
here. All the remaining provisions can function entirely
independently of § 541.4 of the regulation, and none of them
references § 541.4 or relies on it in any way. We thus will sever
and set aside the provision of the Rule establishing § 541.4 and
leave the remainder of the Rule in effect.
* * * * *
For the foregoing reasons, we grant the petition for review
and set aside the Rule in part as set forth in this opinion.
So ordered.

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