The FMC has stopped watching the market – now it polices it

Alt. headline: Regulation, not rates, is the risk carriers are underpricing

Alt. headline: How US shipping regulation flipped the burden of proof onto carriers

America’s Federal Maritime Commission has quietly changed job description – from passive market monitor to enforcement agency. For carriers, this regulatory regime change is a bigger structural risk than any freight-rate cycle.

Everyone in container shipping is watching spot rates and the Strait of Hormuz. The more consequential story is being written in Washington, in a building most shippers could not name. Over four years the US Federal Maritime Commission has transformed itself from a passive market monitor into something closer to a maritime police force – and the change in FMC shipping regulation will outlast every rate cycle now grabbing the headlines.

Two acts, one regime change

The shift came in two moves. First the statute: the Ocean Shipping Reform Act of 2022 handed the Commission the legal architecture – the power to open investigations on its own initiative and, crucially, a reversal of the burden of proof so that a carrier must now justify a charge rather than a shipper disprove it. For two years that power largely sat on the page. Then came the enforcement muscle. Since 2025 the Commission has been equipped to actually use it: a record enforcement budget, more than 120 new investigators in its Bureau of Enforcement, a multi-million-dollar AI-driven e-Discovery system to detect violation patterns across carriers, and fast-track administrative judges to clear the backlog of shipper complaints.

Figure 1 – The enforcement build-out: budget, investigators, digital surveillance and recurring alliance hearings turned a dormant statute into an active regime.

The penalties are no longer symbolic

The case record tells the story better than any mission statement. In January 2026 one major carrier was hit with a $22.67m penalty over inflated and improperly billed charges; in April another faced $45.6m in damages – the Commission’s largest ever – for cutting a shipper’s contracted space during the pandemic peak. A $1.9m settlement in May turned on an over-broad ‘Merchant’ clause used to pass detention costs to unrelated third parties. But the ruling that should worry carriers most involved just $510. In a landmark July decision, a demurrage charge levied during a port closure – when there was no practical ability to return the box – was voided outright, with the Commission stating plainly that demurrage exists to promote cargo fluidity, and that the burden of proving a charge is reasonable sits with the carrier.

Figure 2 – Money penalties climbed sharply in 2026, but the $510 Evergreen demurrage ruling may matter more: it sets the principle that carriers must justify every charge.

“A $510 ruling can reshape a market more than a $45m one – because it sets the principle.”

Compliance has become a weapon

Here is where it turns operational. The Commission built a simple online ‘Charge Complaint’ channel – no lawyer, no elaborate process, an email will do. In the hands of large US retail shipper councils, that convenience becomes leverage. A minor clerical error on a terminal-linked invoice is enough to trigger a complaint, and because the burden now rests entirely on the carrier, the same error becomes a bargaining chip to force rate cuts or void a contract. After the headline damages award, copycat suits over space and contract performance began stacking up. This is compliance repurposed as a commercial weapon.

Figure 3 – A cheap, fast complaint channel plus a reversed burden of proof turns a paperwork slip into commercial leverage over carriers.

Trapped between two rulebooks

There is a second front. The same Commission that blocks ‘arbitrary’ emergency surcharges – it rejected a wave of carrier surcharge filings in March 2026 even with a Middle East war under way – is now carrying US consumer-cost logic onto the international stage. At the IMO’s environmental committee in April, the US openly opposed the global Net-Zero Framework, arguing that carbon costs would be passed to American consumers. Carriers are being squeezed from both sides: told at home they cannot freely recover costs, and watching Washington contest the very climate rules that will raise those costs abroad.

The strongest case against me

A sceptic will say regulators bark more than they bite, that administrations change, and that carriers have absorbed FMC scrutiny before. Fair. But the direction here is structural, not cyclical: the statutory burden of proof has already flipped, the enforcement infrastructure is built and staffed, and the case law is accumulating in one direction. You do not need to predict the next ruling to see that the ground beneath ancillary revenue – detention, demurrage, surcharges – has permanently shifted.

“This is structural, not cyclical – the burden of proof has already flipped.”

What I would watch

Three things. Detention-and-demurrage revenue as a disclosed share of carrier income – the line item most exposed to this regime. The frequency of alliance compliance hearings and surcharge rejections, the clearest read on enforcement intensity. And whether the US–IMO clash hardens into a genuine regulatory split, which would force carriers to price two incompatible rulebooks at once. The market prices ships and rates. Increasingly, the regulator prices the returns.