Market Matters Blog
US Surface Transportation Board Addresses Demurrage Rules, Charges
The Surface Transportation Board (STB) released a statement on Oct. 7 that it is issuing a "series of decisions on demurrage and accessorial rules and charges, continuing its efforts to improve dispute resolution processes, promote transparency, and make the agency more accessible."
The STB issued the three decisions concurrently to address matters arising from the STB's May 2019 two-day public hearing on railroad demurrage and accessorial charges, "Oversight Hearing on Demurrage and Accessorial Charges, Docket No. EP 754." The hearing was held in response to significant recent changes in demurrage and accessorial rules and charges implemented by several Class I railroads the STB was actively monitoring.
The National Grain and Feed (NGFA) was present at the hearing with testimony provided by NGFA President and Chief Executive Officer Randy Gordon. "We believe that in far too many cases, current demurrage and accessorial charges and practices are egregious and merely exemplify the market power of today's Class I railroads, reflecting their ability to unilaterally impose one-sided terms and conditions on their customers," said Gordon.
"Frankly, NGFA members in some segments of our industry believe they are at a 'tipping point' in their relationship with Class I rail carriers because of these and other practices, particularly with the increased adoption of the so-called precision scheduled railroad operating model." Here is a link to the press release issued by the NGFA on May 23, 2019: https://www.ngfa.org/….
The NGFA in their June 14, 2019, newsletter noted that Class I freight railroads pushed back strongly against the STB pursuing any policies, guidance or investigation of carriers' demurrage and accessorial charges and practices following the agency's "robust, informative and eye-popping" May 22 and May 23 public hearing in Washington.
In the article, the NGFA presented comments from all of the Class 1 rai1roads who voiced their concerns in supplemental comments submitted to the agency in the aftermath of the May public hearing. https://www.ngfa.org/….
The three decisions issued by the STB are:
-- A proposed policy statement to facilitate more effective problem solving between railroads, shippers and receivers by providing information on principles the STB would consider in evaluating the reasonableness of demurrage and accessorial rules and charges.
-- A proposed rule to enhance the transparency and accuracy of demurrage invoices.
-- A proposed rule to make unambiguous that the regulation of demurrage is not excluded for exempt miscellaneous commodities and boxcar transportation, and to treat the exemption for certain agricultural commodities similarly.
With the proposed policy statement, the STB expects to facilitate more effective problem solving between railroads, shippers and receivers in order to help prevent unnecessary future issues and, when disputes arise, to help resolve them more efficiently and cost-effectively.
The STB is issuing this proposed policy statement to provide the public with information on principles that the STB would consider in "evaluating the reasonableness of demurrage and accessorial rules and charges." The STB seeks public comment on this proposed policy statement and may revise it, as appropriate, after consideration of the comments received.
Comments on this proposed policy statement are due by Nov. 6, 2019. Reply comments are due by Dec. 6, 2019. Comments and replies may be filed with the Board either via e-filing or in writing addressed to: Surface Transportation Board, Attn: Docket No. EP 757, 395 E Street SW, Washington, DC 20423-0001. Comments and replies will be posted to the STB's website at www.stb.gov.
Here is a link to the Federal Register Notice Volume 84, Number 197, Thursday, October 10, 2019: https://www.govinfo.gov/….
Here is a link to the press release issued by the STB on 10-7-19: https://www.stb.gov/….
Here is a link to all the comments currently associated with the Oversight Hearing on Demurrage and Accessorial Charges, Docket No. EP 754. All you need to do is open the drop down next to Docket# and click on "EP" and then in the next box put 754: https://www.stb.gov/….
Mary Kennedy can be reached at email@example.com
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