By Randy Gordon, President and CEO
The NGFA joined with 23 other national producer, commodity and agribusiness organizations today in commending the federal Surface Transportation Board (STB) for its actions to examine whether demurrage and accessorial charges being imposed by Class I carriers on rail customers are commercially fair and reciprocal.
In a statement filed with the STB, the groups particularly commended the agency for scheduling a May 22 public hearing on the issue. “In the interest of obtaining a factual record, we encourage the (STB) to structure the format of its public hearing to enable rail customers to challenge the expected assertions by Class I carriers that their demurrage and accessorial charges meet the tests of commercial fairness and reciprocity,” the agricultural organizations wrote. “Agricultural rail users will be prepared during the hearing to cite specific examples” of tariffs that are commercially unreasonable, unfair and non-reciprocal.
The NGFA and other agricultural groups also commended STB Chairman Ann Begeman for requesting that each of the Class I railroads continue to report the revenues generated through demurrage and accessorial charges for 2018 and on a quarterly basis for the remainder of 2019, and asked that the STB continue to require such reporting in future years. “The responses submitted to the STB by the seven Class I railroads operating in the United States showed that in 2018 alone, billions of dollars were collected from rail customers through demurrage and accessorial charges – above and beyond the line-haul freight rate and far more, we would contend, than is needed to encourage efficient utilization of rail assets.”
The STB on April 8 issued a notice containing details for the May 22 public hearing, which will be conducted at U.S. International Trade Commission’s office in Washington (since the STB’s hearing room is undergoing renovation). Topics to be addressed include experiences with railroad tariffs related to demurrage and accessorial charges since Jan. 1, 2016 regarding commercial fairness, the impact of operational changes on such charges, capacity issues and the impacts of accessorial and demurrage charges on Class I rail carriers’ network fluidity. All Class I railroads were ordered to file specific detailed information by May 1, while shippers and rail users are invited to testify. As this is a priority issue for its members, the NGFA will be testifying, as will several NGFA-member companies. Those wishing to testify are required to submit a notice of intent with the STB by April 24, and written testimony is required to be submitted by May 8.