Posts Tagged ‘demurrage’

Groups Private Car Rules Revised

July 29, 2021

Four groups that represent private freight car owners want the U.S. Surface Transportation Board to launch a rule making process to work toward updating the demurrage and accessorial rules governing the railroads’ use and handling of their equipment.

The petition to the STB asks regulators “to promulgate regulations governing the use by the nation’s Class I railroads of freight rail cars supplied to them by rail car owners, shippers, and other non-railroad entities. [A]n update to the rules governing the railroads’ use of private rail cars is long overdue because the railroad industry has evolved to the point that approximately 73 percent of the rail cars in service today nationwide – approximately 1.2 million rail cars—are no longer owned by railroads, but are . . . purchased, or leased, and maintained, by non-railroad entities at little or no cost to the railroads that use them.”

The groups involved are the North America Freight Car Association, the National Grain and Feed Association, the Chorine Institute and the National Oilseed Processors Association.

They say that current STB rules failed to adequately protect the enormous investment private rail car owners have made in their property because the rules fail to provide sufficient incentives for the Class I railroads to use private rail cars efficiently.

The petition said Class 1 railroads are using private cars in irregular service and holding on to them for too long.

Class 1 Railroads Told to Report on Preparedness for post-pandemic Demands

May 28, 2021

Class 1 railroads have been instructed by U.S. Surface Transportation Board Chairman Martin Oberman to provide information about their preparedness to meet service demand as the nation continues to recovery economically from the COVID-19 pandemic.

In a letter to the railroad CEOs, Oberman said he was concerned about service problems reported by some shippers and expressed fear those issues might be related to a broader trend of rail labor reductions over the past several years, in addition to the furloughs and quarantines brought about by the pandemic.

The railroads were asked to provide information about the sufficiency of operating personnel and railroad equipment availability going forward, as well as longer-term expectations for hiring.

“The freight-rail industry has performed admirably during the COVID-19 pandemic and, as the nation’s economy recovers, I want to be fully informed as to the Class I railroads’ preparedness to meet forecasted demand, including the railroads having the necessary labor and equipment resources in place to provide safe, reliable and efficient service to customers,” Oberman wrote.

He acknowledged that the pandemic disrupted rail operations and lauded the carriers for their communication with the board and stakeholders during the past year.

On another matter, the STB also has asked Class I railroads to continue reporting revenues from demurrage and accessorial charges.

Regulators say that information has allowed them to monitor trends in such revenues.

“In light of the Board’s close oversight of Class I railroad rules and practices related to demurrage and accessorial charges, including our policy statement and final rules related to warehouseman liability and minimum requirements for demurrage bills, it is important for us to continue to receive quarterly updates on these revenue streams,” the STB said in a news release.

STB Adopts Demurrage Rule

April 8, 2021

The U.S. Surface Transportation Board said this week it has adopted a final rail to establish certain minimum information requirements for demurrage bills from Class I railroads.

The  rule regulates billing cycle, shipment, car replacement and credit and debit information.

The minimum-information requirement represents what regulators determined will have the greatest effect on the ability of rail users to review and verify the accuracy of demurrage charges and help to resolve disputes between railroads and their customers.

In a news release the STB said  the rule establishes a machine-readable data requirement to ensure that rail users have the option to access machine-readable data containing the minimum information.

In its decision, the STB reiterated its expectation that all carriers take reasonable action to ensure the accuracy of their invoicing processes and that their demurrage charges are warranted.

The rule will become effective on Oct. 6.

STB Rules on Demurrage, Accessorial Charges

May 2, 2020

The U.S. Surface Transportation Board this week released three decisions pertaining to demurrage and accessorial rules and charges.

In a final policy statement, the board said it has provided principles it will use in evaluating the reasonableness of demurrage and accessorial charges.

The policy states the the board intends to facilitate more effective private negotiations and problem solving between rail carriers and shippers and receivers, to help prevent disputes from arising, and to help resolve disputes more effectively and cost-effective manner.

In another decision the board issued a final rule that requires Class I railroads to directly bill the shipper for demurrage when the shipper and warehouseman agree to that arrangement and notify the carrier.

In explaining the rule the board said the rule is intended “to help ensure the responsibility for demurrage is placed on the party in the best position to expedite the loading or unloading of rail cars.”

In a notice of proposed rulemaking, the board said it will invite comments on certain modifications and additions to proposed requirements for minimum information to be included on or with Class I railroad demurrage invoices.

The final policy statement will be effective May 30 and the final rule in Demurrage Billing Requirements will be effective June 20. Comments on the supplemental notice of proposed rulemaking are due June 5.

STB Finalizes Rule on Demurrage

March 3, 2020

The U.S. Surface Transportation Board has amended its regulations governing the class exemptions for certain miscellaneous commodities, such as paper products and steel scrap, and boxcar transportation to clearly state that demurrage continues to be subject to regulation.

In a news release the STB said the rule change, which becomes effective April 3, reflects longstanding court and agency rulings that these exemptions do not apply to the regulation of demurrage.

It is also intended to clarify the regulation of demurrage, which is a fee charged to a shipper who fails to load or unload freight within an agreed upon period of time.

The new STB rule partially revokes the class exemption that covers certain agricultural commodities so that the exemption will not apply to demurrage regulation.

As a result, the agency said, the exemption for agricultural commodities will be consistent with similar class exemptions covering non-intermodal rail transportation, they added.

The rule change was first announced by the STB last October.

STB Issues Notices in 3 Dumurrage Cases

October 8, 2019

In three notices the U.S. Surface Transportation Board is taking on the contention issue of demurrage, which are fees charged by railroads to shippers who hold onto freight cars for a longer period of time than that had set by the carrier.

In Policy Statement on Demurrage and Accessorial Rules and Charges, docket No. EP 757, the STB said it “is issuing this proposed policy statement to provide the public with information on principles the Board would consider in evaluating the reasonableness of demurrage and accessorial rules and charges.”

Public comment is being sought in this case through Nov. 6, 2019, while reply comments are due by Dec. 6, 2019.

The second case is docket No. 760—Exclusion of Demurrage Regulation From Certain Class Exemptions.

In its ruling it said, “The STB proposes to clarify its regulations governing exemptions for certain miscellaneous commodities and boxcar transportation so that those regulations unambiguously state that demurrage continues to be subject to Board regulation.

“The Board also proposes to revoke, in part, the exemption that currently covers certain agricultural commodities so that the exemption would not apply to the regulation of demurrage, thereby making the agricultural commodities exemption consistent with similar exemptions covering non-intermodal transportation.”

Comments on this proposed notice are due by Nov. 6, with reply comments due by Dec. 6, 2019.

The final notice in docket No. 759, Demurrage Billing Requirements, said the STB “proposes changes to the Board’s regulations governing demurrage liability. Specifically, the Board proposes certain requirements regarding Class I carriers’ demurrage invoices, as well as a requirement that a Class I carrier directly bill the shipper if the shipper and warehouseman agree to that arrangement and have so notified the rail carrier.”

Public comments to this notice are due by Nov. 6 with a Dec. 6 reply comments deadline.

Railway Age reported that the cases are in response to shippers who want the STB to rule that railroads cannot unilaterally bill shippers and demand payment without providing more factual information.” observed Railway Age Capitol Hill Contributing Editor Frank. N. Wilner.

The STB had last May held a two day hearing on railroad demurrage and accessorial charges.

That hearing was prompted by significant recent changes in demurrage and accessorial rules made by several Class I railroads.