By Randy Gordon, President and CEO
The nation’s Class I rail carriers have submitted reports to the Surface Transportation Board (STB) detailing millions of dollars of earnings generated during 2018 through demurrage and accessorial charges assessed on rail customers.
Of the carriers reporting, CSX Transportation Co. topped the revenue earners – generating a total of $365.7 million in demurrage and accessorial revenue. Norfolk Southern Corp. was second at $335.68 million, followed by BNSF Railway at $279.06 million and Union Pacific Railroad at $232.36 million. The Kansas City Southern reported $40.8 million in demurrage and accessorial charge revenues. Each of the filings identified the specific tariff and accessorial line items through which revenues had been generated.
The Canadian National Railway said it planned to submit its data on Jan. 31 (which had not been posted yet on the STB’s website). The STB as of Feb. 1 had not posted any response yet from the Canadian Pacific Railway.
The reporting had been requested by STB Chairman Ann Begeman, who directed that each of the Class I carriers also report 2019 earnings on a quarterly basis that are generated by demurrage and accessorial charges. Each of the carriers’ 2018 reports can be accessed from the STB website’s “non-docketed public correspondence” section by clicking here and reviewing the January 2019 filings.
In his filing dated Jan. 16, CSX President and Chief Executive Officer James Foote (who will address the NGFA’s convention on March 19) wrote that CSX had “seen our customers grow comfortable with the changes” to its tariffs and accessorial charges that have been updated and enforced since its implementation of “scheduled railroading” in 2017. “In all cases, their (‘the charges’) purpose is to further the efficient management of assets and promote a fluid transportation pipeline…, (and are intended to) promote a faster, more efficient service product to the ultimate benefit of all customers on the network,” Foote wrote. He also said CSX does not view “accessorial and demurrage tariff items as a key driver of CSX revenues,” saying that they represented 3 percent of its total 2018 revenues.
Foote wrote that “asset management measures like these” helped contribute to a 10 percent decrease in CSX’s active cars online despite greater volumes of traffic (compared to 2017), “all-time” velocity records for the fourth consecutive quarter, a 13 percent reduction in dwell time and a reduction in employee injuries and train accidents. “…[W]e believe all our rates – linehaul and accessorial alike – are commercially fair,” he wrote.
Meanwhile, BNSF President and Chief Executive Officer Carl Ice in a filing dated Jan. 22 wrote that most of its accessorial revenue is generated through services provided to its consumer product customers, such as for container and trailer dwell time and handling inside BNSF intermodal facilities. He also noted that BNSF does not begin charging demurrage for up to 24 hours, depending on when a car is placed or is awaiting release, and provides credits for efficient loading and unloading of railroad-owned equipment. “Moreover, our business unit operations team routinely applies pre- and post-billing credits via manual review and adjustments where appropriate to account for non-customer causes, and we actively engage with customers to understand efficiency challenges they might be facing at their facilities,” Ice wrote. “This level of engagement and responsiveness, balance and reciprocity is important to our customers and to us.”
NGFA will continue to report on the 2019 quarterly filings submitted by the Class I railroads to the STB.