The World Shipping Council, representing about 90% of global liner shipping services, challenged the FMC's 2024 rule defining when ocean carriers unreasonably refuse to deal or negotiate vessel space. The rule includes as a non-binding example of unreasonable conduct "quoting rates that are so far above current market rates they cannot be considered a good faith offer." The shipping industry argued this amounted to unauthorized rate regulation by an agency that Congress stripped of general ratemaking powers in 1995.
Senior Circuit Judge Ruth Bader Ginsburg wrote that the commission has authority to consider extreme pricing as one factor among many in assessing reasonableness. "There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal," Ginsburg noted, adding that allowing carriers to avoid liability simply by quoting unrealistically high rates would "render the law in a great measure nugatory." The court drew parallels to National Labor Relations Board precedent allowing consideration of wage proposals in good-faith bargaining assessments.
The case stems from the Ocean Shipping Reform Act of 2022, which directed the FMC to define unreasonable refusal to deal after U.S. exporters complained about difficulties obtaining vessel space. The commission initially proposed mandatory factors for assessing reasonableness but later made them non-binding and removed explicit references to "business decisions" following industry comments. The final rule also requires carriers to submit annual documented export policies detailing pricing strategies and service offerings.
The decision preserves the FMC's enforcement tools as supply chain disruptions continue affecting global shipping. The court noted that violations carry reparations remedies, requiring the commission to assess market rates anyway. The ruling may encourage more complaints from shippers facing what they view as unreasonable carrier conduct, though the commission must still consider the "totality of circumstances" in each case.