Evergreen Shipping Agency (america) Corp. and Evergreen Line Joint Service Agreement v. Federal Maritime Commission and United States of America

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 20, 2025 Decided April 28, 2026
No. 25-1104
EVERGREEN SHIPPING AGENCY (AMERICA) CORP. AND
EVERGREEN LINE JOINT SERVICE AGREEMENT,
PETITIONERS
v.
FEDERAL MARITIME COMMISSION AND UNITED STATES OF
AMERICA,
RESPONDENTS
On Petition for Review of an Order on Remand
of the Federal Maritime Commission
Robert K. Magovern argued the cause for petitioners.
With him on the briefs were Matthew Howell and Rachel
Schwartz.
Michael B. Kimberly was on the brief for amicus curiae
the National Association of Waterfront Employers in support
of petitioners.
Paul W. Hughes, Andrew A. Lyons-Berg, and Grace
Wallack were on the brief for amicus curiae in support of
petitioners.

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Phillip “Chris” Hughey, General Counsel, Federal
Maritime Commission, argued the cause for respondents.
With him on the brief were Robert B. Nicholson and Robert J.
Wiggers, Attorneys, U.S. Department of Justice, and Stephanie
E. Rice, Attorney-Advisor, Federal Maritime Commission.
Harry J. Summers, Attorney, Federal Maritime Commission,
entered an appearance.
Before: CHILDS, Circuit Judge, and EDWARDS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
EDWARDS, Senior Circuit Judge: This case involves a
petition for review filed by Evergreen Shipping Agency
(America) Corporation and Evergreen Line Joint Service
Agreement (collectively, “Evergreen”), a common carrier,
challenging an order issued by the Federal Maritime
Commission (“FMC” or “Commission”) pursuant to its
authority under the Shipping Act of 1984 (“Act”). The matter
arises out of a dispute between TCW, Inc. (“TCW”), a trucking
company, and Evergreen over “detention charges” that
Evergreen levied on TCW for the late return of borrowed
equipment. As we explain below, the dispute between TCW
and Evergreen has consumed the affected parties for six years.
FMC has heard the matter twice, and this is the second petition
for review before this court. 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) (Evergreen I).
This saga began in 2020 when Evergreen and Yamaha

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Motor Company, Ltd. (“Yamaha”) entered into an agreement
to transport goods from Japan to Newnan, Georgia. Evergreen
was responsible for the ocean transportation of the goods from
Japan to the Port of Savannah, Georgia. Yamaha designated
TCW as its “Preferred Trucker” to complete the landside
portion of the transportation between the Port of Savannah and
Yamaha’s plant in Newnan. Evergreen allowed TCW to use
Evergreen’s container and chassis for a limited time to
facilitate transport of the goods to the Yamaha plant. TCW had
21 days of free time for Evergreen’s container and 4 days of
free time for its chassis; thereafter, detention charges of $150
and $20 would accrue for the container and the chassis,
respectively, every calendar day, including weekends and
holidays. TCW picked up the shipment, including the container
and chassis, from the port on April 28, 2020. Due to a COVID-
related closure at the Yamaha plant in Newnan, TCW did not
return the chassis and container to the port until May 26, which
was 7 days late for the container and 22 days late for the
chassis. Evergreen invoiced TCW $1,490 in detention charges.
TCW objected to the $510 charged for May 23-25, when TCW
was unable to return the equipment because the Port of
Savannah was closed. Evergreen refused to waive the charges.
TCW paid and then filed a complaint with the Commission
against Evergreen. TCW argued the $510 charge was unjust
and unreasonable because it could not have returned the
borrowed equipment when the port was closed.
In its initial review of this matter, FMC found merit in
TCW’s plea for relief from the disputed detention charges. It
found that there was “nothing [TCW] could have done to return
the container [during the port closure] because the port was not
receiving empty containers.” TCW, Inc. v. Evergreen Shipping
Agency (Am.) Corp., 2022 WL 18068977, at *5 (Dec. 29,
2022). As a result, FMC found that the disputed detention

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charges could not serve their goal of incentivizing faster
equipment return.
Evergreen filed a petition for review with this court. On
July 5, 2024, we granted the petition, vacated the
Commission’s Initial Order as to the reasonableness
determination, and remanded the matter to the agency for
further proceedings. Evergreen I, 106 F.4th at 1118. The court
ordered the Commission to more carefully “analyze the
incentive effect of the detention charges at issue” and “respond
reasonably to Evergreen’s arguments” justifying the charge on
grounds other than the incentive principle. Id. at 1114.
On February 13, 2025, the Commission issued an Order
on Remand holding that Evergreen’s contested detention
charges were unreasonable. TCW, Inc. v. Evergreen Shipping
Agency (Am.) Corp., 2025 WL 516256 (Feb. 13, 2025). FMC
acknowledged that charging detention during a port closure
generally incentivizes faster equipment return. The
Commission explained, however, that it was necessary to
consider more than just whether a fee incentivized the fastest
possible return. Instead, the most important inquiry was
whether a fee enhanced “freight fluidity.” Id. at *4-6. Given the
Port of Savannah’s three-day closure and TCW’s inability to
retrieve the equipment from Yamaha any earlier, FMC
concluded that the disputed detention charges could not
promote freight fluidity. FMC also determined that none of the
alleged extenuating circumstances identified by Evergreen
justified charging TCW for the late delivery attributable to the
port closure.
Evergreen now petitions for review again. Its principal
argument is that the Commission lacked substantial evidence
for its findings. “An agency action is arbitrary and capricious

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if it rests upon a factual premise that is unsupported by
substantial evidence.” Ctr. for Auto Safety v. Fed. Highway
Admin., 956 F.2d 309, 314 (D.C. Cir. 1992). It also contends
that “the Commission misapplied [46 C.F.R. § 545.5 (2020)
(the ‘Interpretive Rule’)] by abandoning the ‘incentive
principle’ and replacing it with a new ‘freight fluidity
principle,’ with no support for any such test in the Interpretive
Rule.” Pet’r’s Br. 19. We disagree and, for the reasons
explained below, deny the petition for review.
Contrary to Evergreen’s arguments, FMC’s Order on
Remand is reasonable and supported by substantial evidence in
the record. Indeed, Evergreen has conceded the three crucial
facts supporting FMC’s Order in this case: (1) TCW could not
retrieve the equipment from Yamaha any earlier than it did
because of Yamaha’s plant closure; (2) the port’s gates were
not open to deliveries during the three-day closure; and (3)
Evergreen suffered no costs as a result of the delayed
equipment return. These uncontested facts gave the
Commission adequate grounds to decide that charging
detention during the port closure would not have promoted
freight fluidity and thus was unreasonable. Evergreen had the
opportunity to contest each point, but it never submitted
rebuttal evidence below or even requested discovery.
Furthermore, FMC’s Order on Remand is entirely
consistent with the Commission’s Interpretive Rule. The rule
plainly focuses on the extent to which detention charges are
“serving their intended primary purposes as financial
incentives to promote freight fluidity.” 46 C.F.R. § 545.5(c)(1)
(emphasis added). Therefore, because we find no merit in
Evergreen’s claims, we deny the petition for review.

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I. BACKGROUND
A. The Shipping Act and the Interpretive Rule
Under the Shipping Act of 1984, “[a] common carrier . . .
may not fail to establish, observe, and enforce just and
reasonable regulations and practices relating to or connected
with receiving, handling, storing, or delivering property.” 46
U.S.C. § 41102(c). FMC enforces and interprets § 41102(c)’s
reasonableness requirement.
In 2020, after a lengthy fact-finding investigation
precipitated by widespread industry discontent over carrier
fees, FMC promulgated an “Interpretation of [§ 41102(c)]” as
to “Unjust and Unreasonable Practices with Respect to
Demurrage and Detention.” 46 C.F.R. § 545.5 (capitalization
altered). The Interpretive Rule explains “how the Commission
will interpret [§] 41102(c) . . . in the context of demurrage and
detention” fees. Id. § 545.5(a).
The Interpretive Rule first defines demurrage and
detention. It explains that these terms “encompass any charges,
including ‘per diem,’ assessed by ocean common carriers . . .
related to the use of . . . shipping containers.” Id. § 545.5(b).
“Detention” is a penalty for delays in equipment return.
“Demurrage” is a penalty for delays in equipment pickup. This
case concerns detention.
Under the Interpretive Rule, FMC applies an “incentive
principle” to evaluate the reasonableness of challenged
detention and demurrage fees. As noted above, the incentive
principle requires that FMC “consider the extent to which
demurrage and detention are serving their intended primary
purposes as financial incentives to promote freight fluidity.” Id.

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§ 545.5(c)(1). To illustrate how this works in practice, the
Interpretive Rule outlines the “[p]articular application[] of
[the] incentive principle” to common scenarios, including
“[e]mpty container return.” Id. § 545.5(c)(2). “Absent
extenuating circumstances,” the Interpretive Rule explains,
“imposition of detention when it does not serve its
incentivizing purposes, such as when empty containers cannot
be returned, [is] likely to be found unreasonable.” Id.
§ 545.5(c)(2)(ii).
FMC released guidance with the Interpretive Rule. See
Interpretive Rule on Demurrage and Detention Under the
Shipping Act, 85 Fed. Reg. 29638 (May 18, 2020). While
detention is a “valid charge[] when [it] work[s],” FMC said,
“when [it] do[es] not, there is cause to question [its]
reasonableness.” Id. at 29651. FMC previewed that, in
reasonableness challenges, it would focus on “the extent to
which . . . detention [is] serving [its] intended purpose[] as [a]
financial incentive[] to promote freight fluidity.” Id. And FMC
would “continue[] to understand . . . detention as primarily
being [a] financial incentive[] to promote freight fluidity,”
although it allowed that detention “might have other purposes,”
like compensation. Id. at 29652. Given its focus on freight
fluidity, FMC explained that it intended the Interpretive Rule
to reflect a “general principle[]” that “truckers should not be
penalized by . . . detention practices when circumstances are
such that they cannot retrieve containers from, or return
containers to, marine terminals because under those
circumstances the charges cannot serve their incentive
function.” Id. at 29638. Nonetheless, FMC committed to
“consider[ing] all arguments raised in [each] individual case”
as it conducts “case-by-case adjudication.” Id. at 29647.
A party that alleges a violation of the reasonableness

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requirement can file an administrative complaint with FMC.
See 46 U.S.C. § 41301(a). Disputes involving amounts under
$50,000 may be resolved through an informal small claims
process. See 46 C.F.R. § 502.301(b).
B. TCW’s Delayed Equipment Return
As highlighted in the introduction to this opinion, Yamaha
contracted with Evergreen to transport a shipment from Japan
to the Port of Savannah. For ground transportation from the
port to Yamaha’s plant in Georgia, Yamaha hired TCW. Under
a tripartite agreement between Yamaha, Evergreen, and TCW,
Evergreen gave TCW 21 days of “free time” for the shipping
container and 4 days of “free time” for the chassis to facilitate
TCW’s transportation of the shipment to the plant. If TCW
failed to return the container and chassis by the end of the “free
time,” it agreed to pay Evergreen $150 per day for the container
and $20 per day for the chassis.
Yamaha’s shipment was delivered to the Port of Savannah
on April 28, 2020, and TCW collected it that day. “Free time”
on the container ended on May 19, 2020, and “free time” on
the chassis ended on May 4, 2020. However, TCW did not
return Evergreen’s equipment on time. Yamaha’s Georgia
plant was closed due to the pandemic, and TCW heard from
Yamaha on May 21, 2020 that the container and chassis would
only be available for pickup on May 23, 2020. TCW retrieved
the equipment on May 23. But from May 23-25, the Port of
Savannah was subject to planned closures – on Saturday, May
23, due to “reduced business as a result of the COVID-19
pandemic,” on Sunday, May 24, as regularly scheduled, and on
Monday, May 25, for Memorial Day. Joint Appendix (“J.A.”)
505-06. TCW returned the container and chassis on May 26
when the port reopened. The container was 7 days late, and the

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chassis 22 days.
Evergreen invoiced TCW for $1,490 in detention charges.
TCW disputed $510 in fees for May 23-25, when the port was
closed. Evergreen refused to waive the charges.
C. Procedural History
TCW filed a complaint. It argued that charging detention
during the port closure was unreasonable because TCW was
unable to return the equipment. In its sworn complaint, TCW
said that it had “made all attempts to . . . ensure cargo and
equipment . . . moved as fluidly as possible, while dealing with
the [Yamaha] plant shut-down during the Covid19 crisis.” J.A.
161. “In no way,” TCW insisted, “could [it] have returned the
equipment sooner.” Id.
The Commission’s Small Claims Officer (“SCO”) agreed
with TCW, finding that the detention charges for May 23-25
“were unreasonable because they could not have incentivized
cargo movement given that the port was closed on those days,
making it impossible for [TCW] to return the equipment.” J.A.
521-22. FMC sua sponte reviewed the SCO’s decision. It
affirmed because “no amount of detention can incentivize the
return of a container when the terminal cannot accept the
container.” TCW, 2022 WL 18068977, at *5. Here, FMC said,
“there was nothing [TCW] could have done to return the
container between May 23-25, 2020 because the port was not
receiving empty containers.” Id.
Evergreen appealed. In Evergreen I, we vacated and
remanded the case to the Commission for two reasons. See 106
F.4th at 1114. First, FMC failed to address four facts that
Evergreen argued justified the disputed charges. Without an

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“expla[nation] [of] why [these facts] either were not relevant
. . . or were outweighed by countervailing considerations,” we
explained, FMC did not “mak[e] [the] circumstantial, fact-
bound inquiry” it was required to. Id. at 1117-18. Instead, it
impermissibly “treated the incentive principle as [a] sort of
‘bright line’ rule.” Id. at 1117. Second, we found the logic of
FMC’s application of the incentive principle “implausible.” Id.
at 1118. FMC had concluded that “a detention charge
necessarily lacks any incentivizing effect [when] levied for a
day on which a container cannot be returned to a marine
terminal.” Id. “On the contrary,” we reasoned, “being charged
for detention during a port closing announced before the carrier
picks up the equipment heightens the incentive to return
equipment on time.” Id.
On remand, FMC “assess[ed] reasonableness by balancing
how a particular charge fits within the incentive principle to
further the primary purpose of promoting freight fluidity
alongside other arguments and extenuating circumstances
raised by the parties to determine if they are relevant to
assessing reasonableness and if so, whether they outweigh the
finding under the incentive principle.” TCW, 2025 WL 516256,
at *4.
FMC began by applying the incentive principle with an
emphasis on freight fluidity. Following Evergreen I, FMC
allowed that the disputed charges created “an incentivizing
effect . . . to return equipment before scheduled port closures.”
Id. at *5. However, “[i]ncentivizing equipment to be returned
just before scheduled closures will not always have a positive
impact on freight fluidity.” Id. For example, FMC explained,
equipment returned shortly before a closure is unlikely to be
processed, and a rush to return equipment could create
“congestion and logjams at ports.” Id. FMC also predicted that

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the availability of detention during port closures could reduce
incentives for carriers and terminal operators to “be creative or
innovative about how they could promote freight fluidity.” Id.
at *6. FMC credited the SCO’s factual findings, including that
Yamaha’s plant was closed for COVID-19 and that TCW made
“all efforts” to move the equipment quickly. Id. at *7. On these
facts, FMC concluded, “no amount of detention charges over
the port’s scheduled closures could have incentivized [TCW]
to return the equipment before the closures because [TCW]
could not collect the equipment any earlier.” Id. So the disputed
fees could not have enhanced freight fluidity and were thus
unreasonable “absent ‘extenuating circumstances’ or other
‘factors, arguments, and evidence’ that can establish
reasonableness.” Id. (citation omitted).
FMC then responded to each of the “extenuating
circumstances” Evergreen alleged justified the charges. First,
FMC found that the “generous” free time that Evergreen gave
to TCW was relevant to the reasonableness determination, but
“not dispositive.” Id. at *8. Here, “though the free time
provided was generous,” and it was generally reasonable for
Evergreen to levy detention after free time expired, the allotted
free time was not a rationale for detention charges on the
specific days during which the port was closed. Id. Second,
FMC explained that the charges were not reasonable simply
because they were part of a contractual agreement. It
emphasized that carriers “do not have an unbounded right to
contract for whatever they want,” and “there is reason to
question whether . . . detention practices are normally the
subject of arms-length negotiation between parties with
remotely equal bargaining power.” Id. (citation omitted).
Third, while relevant, TCW’s “awareness of the [port] closures
d[id] not make [Evergreen’s] detention charges reasonable
because [TCW] was unable to act on this knowledge” due to

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Yamaha’s COVID-related plant closure. Id. at *9. And fourth,
FMC acknowledged that TCW was already past its free time
when the port closures occurred. Id. But the burden was on
Evergreen to “produc[e] evidence regarding the compensatory
aspects of . . . detention” which would justify applying the
“once on [detention], always on [detention]” principle. Id. at
*9-10 (emphasis removed) (citations omitted). Evergreen had
no such evidence, so, on the facts of this case, FMC could not
find the disputed charges reasonable as compensation instead
of incentive. Having undergone a “careful review of the facts
and circumstances,” FMC concluded that “none of the
additional justifications or extenuating circumstances, alone or
collectively, establish the reasonableness of [Evergreen’s]
detention charges.” Id. at *11.
Evergreen now petitions for review of the Order on
Remand, again on arbitrary and capricious grounds. We have
jurisdiction over the petition under 28 U.S.C. § 2342(3)(B),
which provides that courts of appeals have jurisdiction to
review “all rules, regulations, or final orders of . . . [FMC]
issued pursuant to [listed statutes].”
II. ANALYSIS
A. Standard of Review
Our review in an arbitrary and capricious challenge is
“deferential.” Evergreen I, 106 F.4th at 1117. “[A]gency action
is arbitrary and capricious if the agency has: ‘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.’” Id. (quoting Motor Vehicle Mfrs. Ass’n of U.S. v.

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State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
We are “required to set aside agency findings that are
unsupported by ‘substantial evidence.’” Robinson v. Nat’l
Transp. Safety Bd., 28 F.3d 210, 215 (D.C. Cir. 1994) (citation
omitted). This is a “‘narrow standard of review’ requiring only
‘such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.’” Id. (citation omitted). “An
agency conclusion ‘may be supported by substantial evidence
even though a plausible alternative interpretation of the
evidence would support a contrary view.’” Id. (citation
omitted). And “in their application to the requirement of factual
support, the substantial evidence test and the arbitrary and
capricious test are one and the same.” Genuine Parts Co. v.
EPA, 890 F.3d 304, 312 (D.C. Cir. 2018) (cleaned up).
B. FMC’s Reasonableness Determination Was Not
Arbitrary and Capricious
FMC found it unreasonable for Evergreen to charge TCW
detention fees for May 23-25. Its determination was based on
factual findings supported by substantial evidence. It was also
consistent with FMC’s Interpretive Rule and the product of a
fact-specific analysis.
1. There Was Substantial Evidence for FMC’s
Factual Findings
As noted above, FMC relied on three factual findings, all
expressly conceded by Evergreen: (1) the delayed return was
caused by Yamaha’s plant closure, (2) the Port of Savannah
was closed and could not accept deliveries on May 23-25, and
(3) Evergreen incurred no costs because of the delay. Together,
these three conceded facts form a reasonable basis for FMC to

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determine that charging detention on May 23-25 did not serve
either detention’s primary goal of incentivizing efficient
equipment return to enhance freight fluidity or its secondary
purpose of compensating carriers for costs incurred due to
delay. We thus reject Evergreen’s argument that FMC lacked
sufficient evidence to support its factual findings.
First, as Evergreen concedes, the delay in equipment
return was caused by Yamaha’s plant closure. During the small
claims proceeding, the SCO found that TCW was “unable to
timely return the equipment . . . because [Yamaha’s] plant was
shut down due to COVID-19.” J.A. 521. When FMC decided
to review the SCO’s decision, it instructed Evergreen and TCW
to submit additional briefing on reasonableness. See J.A. 530-
32. Evergreen’s supplemental brief stated, as “Fact No. 1”:
[TCW] failed to [return the equipment on time] for
reasons having nothing to do with Evergreen[] or the
[p]ort. To the contrary, . . . the reason for the failure
to return the equipment was that it was stuck in
[Yamaha’s] facility.
J.A. 537-38. Evergreen agreed, then, that no detention charges
could have compelled TCW to retrieve the equipment from
Yamaha’s facility before May 23, because the equipment was
not available any earlier than May 23. In Evergreen’s own
words, the equipment was “stuck” in Yamaha’s facility.
Evergreen now disputes this crucial point. It argues that
FMC lacked evidence of when the equipment was available for
pickup and why there was a delay. See Pet’r’s Br. 20. It also
suggests that “[n]either [FMC] nor the [SCO]” actually made
the factual finding that Yamaha’s plant closure affected TCW’s
ability to return the equipment. Id. at 41-43. As a result,

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Evergreen says, “[FMC]’s reliance on this conclusion . . . is . . .
arbitrary and capricious.” Id. at 43. These new arguments from
Evergreen are unpersuasive. The SCO credited TCW’s
explanation that Yamaha’s plant closure caused the delayed
pickup. See J.A. 521. When given the opportunity to challenge
this finding, Evergreen agreed, in its own FMC brief, that the
reason for TCW’s delay was the Yamaha plant closure. See
J.A. 537-38. Evergreen cannot now argue that FMC’s reliance
on this concession was arbitrary and capricious.
For the same reasons, we reject Evergreen’s suggestion
that TCW fell short of its burden to provide evidence Yamaha’s
plant closure caused the delay. Again, Evergreen stated, as fact,
that “the reason for [TCW’s] failure to return the equipment
was that it was stuck in the [Yamaha] facility.” J.A. 538. And
even if Evergreen had not conceded the point, which it did, it
was reasonable for FMC to rely on TCW’s sworn allegation
that it had “no way” to return the equipment sooner, despite
“ma[king] all attempts” to do so, because it was “dealing with
[Yamaha’s] plant shut-down during the Covid19 crisis.” J.A.
161; see Echostar Commc’ns Corp. v. FCC, 292 F.3d 749, 753
(D.C. Cir. 2002) (allowing the FCC to “rely upon the
uncontested, sworn affidavit of a witness speaking from
personal knowledge”). TCW also submitted a May 21 email
from Yamaha informing it that the equipment would be
available for pickup on May 23. See J.A. 164-70. Evergreen
admits that it never tried to submit rebuttal evidence and never
requested further discovery although it had the opportunity to
do so. See Oral Argument at 3:00-6:45. Instead, Evergreen
agreed, in its written submission to FMC, that “the reason for
[TCW’s] failure to return the equipment was that it was stuck
in the [Yamaha] facility.” J.A. 538. The bottom line is that
Evergreen did not contest that the delay was caused by
Yamaha’s plant closure. FMC reasonably relied on this

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conceded fact.
Second, there is no dispute that the Port of Savannah
closed its gates on May 23-25. The parties also agree that the
port would not allow new deliveries through the closed gates.
So Evergreen concedes that it was physically impossible for
TCW to have brought the equipment, retrieved from Yamaha’s
facility as soon as it was available on May 23, through the
port’s gates from May 23-25. The gates were closed. Even if it
is true, as Evergreen claims, that some port activities continued
even while the gates were closed such that the port “likely
could have processed TCW’s return of Evergreen’s equipment
prior to the closure,” Pet’r’s Br. 32, what was happening behind
the closed gates is of no moment here because TCW simply
could not go through the gates.
Third, Evergreen stated at oral argument that it did not
incur any costs because of the delay. See Oral Argument at
16:48-17:40. The delay, while a violation of contract terms, did
not lead to any harmful consequences for Evergreen.
Evergreen argues that it is unreasonable for FMC “to hold an
ocean carrier responsible for delay costs when the actual cause
of delay was . . . the responsibility of another party.” Pet’r’s Br.
48. But as Evergreen concedes, there were no such costs here.
Evergreen straightforwardly conceded these three facts,
and FMC reasonably relied on them. They provide ample
support for FMC’s finding that it was unreasonable for
Evergreen to charge TCW detention on May 23-25. Because of
Yamaha’s plant closure, TCW could not retrieve Evergreen’s
equipment prior to May 23. But starting on May 23, the Port of
Savannah’s gates were closed to new deliveries, and TCW was
physically unable to bring the equipment into the port. While
TCW’s delay violated the terms of its agreement with

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Evergreen, Evergreen suffered no costs as a result of the delay.
Evergreen had the opportunity to rebut this evidence or to seek
discovery, and it chose not to do so. Evergreen’s central
contention, that FMC lacked the requisite facts to find the
charges for May 23-25 unreasonable, is thus contradicted by
Evergreen’s own concessions and actions below. Under these
circumstances, it was not arbitrary and capricious for FMC to
conclude that the disputed fees did not serve either their
“primary purpose[] as financial incentives to promote freight
fluidity,” 46 C.F.R. § 545.5(c)(1), or any secondary
“compensatory aspect[],” 85 Fed. Reg. at 29652. No charges
could have compelled TCW to return the equipment earlier,
because TCW was first unable to access the equipment at
Yamaha’s plant and then physically barred from going through
the port’s gates to deliver the equipment. Detention fees did
nothing to help the equipment move more fluidly through the
system. And they also could not be justified as compensation
for costs caused by the delay, because there were no such costs.
The fees were thus unreasonable.
2. Evergreen’s Additional Arguments are
Unpersuasive
There is no merit to three additional arguments raised by
Evergreen: (1) FMC misapplied the Interpretive Rule by
considering freight fluidity; (2) FMC relied on unsupported
assumptions; and (3) FMC did not engage in a fact-specific
analysis. We will address each argument in turn.
First, as we have already noted, FMC properly considered
freight fluidity in its application of the incentive principle. In
the Order on Remand, FMC explained that “the goal of the
incentive principle is to ensure that reasonable detention
charges ‘promote freight fluidity,’ a concept that is broader

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than simply the quickest equipment return and which requires
balancing competing incentives.” TCW, 2025 WL 516256, at
*5 (citation omitted). This understanding of the incentive
principle comes straight from the text of the Interpretive Rule
and FMC’s accompanying guidance. Under the Interpretive
Rule’s definition of the incentive principle, FMC must
“consider the extent to which demurrage and detention are
serving their intended primary purposes as financial incentives
to promote freight fluidity.” 46 C.F.R. § 545.5(c)(1) (emphasis
added). The Interpretive Rule thus required FMC to ask
whether late fees would enhance freight fluidity and
emphasized that the “intended primary purpose” of detention
is to “promote freight fluidity.” Id. The centrality of freight
fluidity is also clear in FMC’s guidance, released with the
Interpretive Rule, which stated that FMC “continues to
understand demurrage and detention as primarily being
financial incentives to promote freight fluidity.” 85 Fed. Reg.
at 29652. It is simply untrue that, as Evergreen asserts, FMC’s
focus on freight fluidity has “no support in the Interpretive
Rule, or in any of the administrative or rulemaking proceedings
leading up to it.” Pet’r’s Br. 26. To the contrary: freight fluidity
has always been integral to the incentive principle, and
consideration of freight fluidity was a mandate of the
Interpretive Rule, not a deviation from it.
In fact, the Interpretive Rule and FMC’s guidance preview
that the promotion of freight fluidity can sometimes outweigh
speedy return. The Interpretive Rule, in outlining “[p]articular
applications of [the] incentive principle,” states that “[a]bsent
extenuating circumstances, practices and regulations that
provide for imposition of detention when it does not serve its
incentivizing purposes, such as when empty containers cannot
be returned, are likely to be found unreasonable.” 46 C.F.R. §
545.5(c)(2)(ii) (emphasis added). And in its guidance, FMC

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explains how it would apply the Interpretive Rule to a nearly
identical set of facts, where the port is closed and equipment is
already past free time:
If demurrage cannot act as an incentive for cargo and
equipment fluidity because, for instance, a marine
terminal is closed for several days due to a storm,
charging demurrage in such a situation, even if a
container is already in demurrage, raises questions as
to whether such demurrage practices are tailored to
their intended purpose in accordance with section
41102(c).
85 Fed. Reg. at 29653. Given this language, we do not agree
with Evergreen’s claim that “[n]ot once . . . did [FMC] ever say
the general promotion of ‘freight fluidity’ . . . could or would
under any circumstance outweigh ‘simply the quickest
equipment return.’” Pet’r’s Br. 26. Nor is there any basis for
Evergreen’s suggestion that focusing on freight fluidity
conflicts with the logic of the incentive principle. See id. at 23.
As FMC explained, enhancing freight fluidity is an inherent
aspect of the incentive principle. And Evergreen does not
challenge the Interpretive Rule.
Second, FMC reasonably relied on its expertise and
experience when analyzing the potential impact of requiring
equipment return during port closures. Evergreen argues that
FMC made three unsupported assumptions to reach its
decision, namely: (1) “the port could not have processed
TCW’s prompt return of Evergreen’s container” if it was
returned on May 22; (2) “TCW’s return of the equipment prior
to the port closure would have caused congestion”; and (3)
“charges over scheduled port closures might create
‘disincentivizing effects’ that could hinder freight fluidity.” Id.

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at 31, 33-34 (capitalization altered). But “[a]gencies are
entitled to make assumptions about facts within their area of
expertise as long as they are reasonable, which [these] [are].”
Advocs. for Highway & Auto Safety v. Fed. Motor Carrier
Safety Admin., 41 F.4th 586, 596 (D.C. Cir. 2022). The three
challenged assumptions are plainly within FMC’s area of
expertise. And, as FMC explains, its analysis of the future
impacts of detention charges is inherently hypothetical and
predictive in nature. In the absence of concrete information, it
was not unreasonable for FMC to rely on its expertise. For
example, its concern about congestion was based on four
forums it held at “major gateway ports” with “industry
stakeholders, regulators, and the general public.” J.A. 9. At the
forums, FMC learned that when many motor carriers wish to
avoid detention charges on the same day, “there may be
congestion at the terminal gates.” J.A. 23. Similarly, FMC’s
prediction of negative incentives for port operators came from
its fact-finding for the Interpretive Rule. During that process,
“shippers, intermediaries, and truckers” argued that allowing
detention charges when “equipment could not be retrieved or
returned weakened any incentive for [carriers and ports] to
address port congestion and their own operational
inefficiencies.” 85 Fed. Reg. at 29639. Evergreen has not
shown that these assumptions, based on FMC’s expertise and
experience, were “certainly wrong” such that it “would be
wrongheaded . . . to persist” in relying on them. Chem. Mfrs.
Ass’n v. EPA, 28 F.3d 1259, 1265 (D.C. Cir. 1994).
Third, FMC adequately responded to each “extenuating
circumstance” Evergreen identifies: (1) “Evergreen’s
allotment of 21 days of free time for the container,” (2) “that
TCW contractually agreed to accept responsibility for the
detention charges for all days after the expiration of free time,”
(3) “that TCW had months of advance notice that the Port of

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Savannah was going to be closed from May 23-25,” and (4)
“that free time had expired two days before . . . the [p]ort was
closed.” Pet’r’s Br. 38 (emphasis removed). FMC
acknowledged that each fact was relevant to its analysis. But it
explained that none could overcome the disputed charges’
failure to promote freight fluidity when considered in context
of the facts of the dispute.
As to the 21-day allotment of free time, FMC agreed that
Evergreen was “generous” and that charging detention after the
expiration of free time was generally reasonable. TCW, 2025
WL 516256, at *8. But the question in this case, FMC said, was
whether charges “after the expiration of . . . free time [and]
during the [p]ort’s closure” were reasonable. Id. The length of
free time offered did not justify detention during a port closure.
Next, FMC addressed TCW’s contractual agreement to the
disputed charges. It explained that “[o]cean carriers . . . do not
have an unbounded right to contract for whatever they want.”
Id. (citation omitted). Instead, carriers like Evergreen remain
subject to the reasonableness requirement even when there is a
contract. FMC also observed that “most shippers . . . lack
significant bargaining power as compared to ocean carriers.”
Id. (cleaned up). For these reasons, the mere fact of TCW’s
agreement did not make the charges reasonable.
Third, FMC agreed that TCW had advance notice of the
port’s closure, but it pointed out that TCW was “unable to act
on [its] knowledge to return the equipment earlier when the
[p]ort was open” because it could not retrieve the equipment
from Yamaha’s closed plant. Id. at *9.
And finally, FMC acknowledged that TCW was past its
free time when the port closure began. But FMC refused to

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adopt Evergreen’s “once on [detention], always on [detention]”
bright line rule. Id. (citation omitted). “Merely because a
container is already in a state of detention,” FMC explained,
“does not mean that charges are reasonable . . . regardless of
circumstance.” Id. at *10. It faulted Evergreen for failing to
provide evidence that detention could be reasonable as
compensation for costs incurred as a result of the delay. Id.
Far from “formulaically dismiss[ing] each one out of
hand,” as Evergreen claims, Pet’r’s Br. 39, FMC specifically
discussed each fact and explained why it was not enough to
make the detention charges reasonable. TCW, 2025 WL
516256, at *8-11. In sum, we reject the suggestion that the
Commission failed to adequately consider the extenuating
circumstances raised by Evergreen.
III. CONCLUSION
For the reasons stated above, Evergreen’s petition for
review is hereby denied.
So ordered.

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