A US federal appeals court has rejected a challenge by the World Shipping Council (WSC) to a Federal Maritime Commission (FMC) rule that defines when ocean carriers unreasonably refuse to deal or negotiate with shippers over vessel space.
The DC Circuit Court of Appeals issued its ruling on March 31, 2026, denying the WSC’s petition for review. The WSC, which represents approximately 90% of the world’s liner shipping services, had argued the FMC rule exceeded the commission’s statutory authority and was arbitrary and capricious. The court disagreed on both counts.
The rule stems from the Ocean Shipping Reform Act of 2022 (OSRA), which Congress passed largely in response to complaints from US exporters struggling to secure vessel space during the pandemic-era supply chain crisis. OSRA directed the FMC to define what constitutes an unreasonable refusal to deal or negotiate on vessel space. The FMC published its Final Rule in July 2024.
The rule sets out a list of non-binding factors the FMC may consider when evaluating whether a carrier’s refusal was unreasonable. These include whether the carrier followed a documented export policy, whether it negotiated in good faith and whether the refusal was based on legitimate transportation factors. Carriers must submit a documented export policy to the FMC once per year, detailing pricing strategies, services offered, equipment provision and markets served.
The rule also includes non-binding examples of conduct the FMC considers unreasonable. The WSC specifically objected to one example, quoting rates so far above current market rates that they cannot be considered a good faith offer. The court found this provision valid.
The ruling strengthens the FMC’s hand in policing carrier behaviour toward shippers on US trades and sets a clear legal foundation for future enforcement actions under OSRA.
