STB Issues Notice of Public Hearing for Demurrage and Accessorial Charges

Transportation Update

Date: April 09, 2019

On April 8, 2019, the Surface Transportation Board (STB) issued a notice announcing a public hearing on railroad demurrage and accessorial charges that will be held on May 22, 2019 in the Main Hearing Room of the U.S. International Trade Commission, located at 500 E Street, S.W., Washington, DC. The hearing arises from significant changes Class I carriers have implemented in their demurrage and accessorial practices that have had significant adverse operational and monetary consequences for their customers. The STB has directed representatives of Class I carriers to appear at the hearing and invited participation by other interested parties, including shippers, receivers, third-party logistics providers and short-line railroads. Parties desiring to speak at the hearing should file a notice of intent to participate identifying the party, the proposed speaker and the time requested by April 24, 2019. Parties may also submit written comments in lieu of appearing at the hearing.

Written testimony by hearing participants and written submissions by interested parties who will not appear at the hearing must be filed by May 8, 2019. Participants and interested persons are encouraged to address the following in their written testimony or submissions and at the hearing:

  • Recent experience with demurrage and accessorial charges, including (i) the largest drivers of demurrage and accessorial charges; (ii) supply chain visibility; (iii) the availability, effectiveness and usability of online customer service tools that manage car orders, car supply, and demurrage and accessorial charges, including whether these tools make available adequate data to evaluate whether demurrage is being assessed properly and to dispute the charges when necessary; (iv) bunching, including bunching that occurs upstream; and (v) the ability to address demurrage through commercial arrangements.

  • Impacts on shippers, receivers, third-party logistics providers and short-line railroads flowing from recent (i) changes in Class I carriers’ demurrage and accessorial tariffs; (ii) changes in Class I carriers’ enforcement policies for these tariffs; and (iii) operational changes implemented by Class I carriers, including, in particular, changes in the frequency and timing of local service and/or short-line interchanges.

  • Perspectives on whether demurrage and accessorial tariffs in effect during the past three years have created balanced and appropriate incentives for both customers and railroads, including views on the extent to which reciprocity should be incorporated into demurrage and accessorial charges.

The Class I carriers are directed to file the following information with the STB by May 1, 2019:

  • A list of all material changes to demurrage and accessorial tariffs since January 1, 2016, including but not limited to changes pertaining to (i) the amount of free time allowed for loading and unloading rail cars; (ii) rates for demurrage and accessorial charges; (iii) the nature and availability of credits or other relief, including for railroad errors and service failures; and (iv) procedures and time periods applicable to the process for raising and resolving disputed charges. For each such tariff change, the carriers are required to specify (a) when notice of the change was given; (b) when the change became effective; and (c) the reason(s) for the change. The carriers are required to present the information in a table.

  • The total dollar amounts of charges billed and collected pursuant to demurrage and accessorial tariffs for the past three calendar years.

  • A detailed explanation of the current process by which shippers, receivers and other parties may dispute demurrage and accessorial charges, and the dollar amounts of charges that have been contested in the first quarter of 2019 and each of the past three calendar years.

  • A detailed explanation of any system or practice under which credits or debits have been issued in connection with the assessment of demurrage or accessorial charges since January 1, 2016, and any changes thereto.

For more information on railroad demurrage and accessorial charges, or for assistance in participating in the public hearing, please contact a member of Thompson Hine’s Transportation practice group.

FOR MORE INFORMATION

For more information, please contact:

Karyn A. Booth
202.263.4108
Karyn.Booth@ThompsonHine.com

Sandra L. Brown
202.263.4101
Sandra.Brown@ThompsonHine.com

Jeff Moreno
202.263.4107
Jeff.Moreno@ThompsonHine.com

Jason D. Tutrone
202.263.4143
Jason.Tutrone@ThompsonHine.com

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