FR Notice of Proposed Rule

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Federal Register / Vol. 77, No. 91 / Thursday, May 10, 2012 / Proposed Rules

Dated: April 19, 2012.
B.C. Jones,
Captain, U.S. Coast Guard, Captain of the
Port, Columbia River.
[FR Doc. 2012–11239 Filed 5–9–12; 8:45 am]
BILLING CODE 9110–04–P

DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Part 1333
[Docket No. EP 707]

Demurrage Liability
Surface Transportation Board
(Board or STB), DOT.
ACTION: Notice of proposed rulemaking.
AGENCY:

Through this notice of
proposed rulemaking (NPRM), the
Board is proposing a rule establishing
that a person receiving rail cars from a
rail carrier for loading or unloading who
detains the cars beyond the ‘‘free time’’
provided in the carrier’s governing tariff
will generally be responsible for paying
demurrage, if that person has actual
notice, prior to rail car placement, of the
demurrage tariff establishing such
liability. The Board also clarifies that it
intends to construe U.S. Code
provisions titled ‘‘Liability for payment
of rates,’’ as applying to carriers’ linehaul rates, but not to carriers’ charges
for demurrage.
DATES: Comments are due by June 25,
2012. Reply comments are due by July
23, 2012.
ADDRESSES: Comments and replies may
be submitted either via the Board’s efiling format or in the traditional paper
format. Any person using e-filing should
attach a document and otherwise
comply with the instructions at the EFILING link on the Board’s Web site, at
http://www.stb.dot.gov. Any person
submitting a filing in the traditional
paper format should send an original
and 10 copies to: Surface Transportation
Board, Attn: EP 707, 395 E Street SW.,
Washington, DC 20423–0001. Copies of
written comments and replies will be
available for viewing and self-copying at
the Board’s Public Docket Room, Room
131, and will be posted to the Board’s
Web site.
FOR FURTHER INFORMATION CONTACT:
Craig Keats at (202) 245–0260.
Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at
(800) 877–8339.
SUPPLEMENTARY INFORMATION:
Demurrage is a charge for detaining
railroad-owned rail freight cars for

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loading or unloading beyond a specified
amount of time (called ‘‘free time’’).
Demurrage has compensatory and
penalty functions. It compensates rail
carriers for the use of railroad
equipment, and by penalizing those
who detain rail cars for too long, it
encourages prompt return of rail cars
into the transportation network. Because
of these dual roles, demurrage is
statutorily recognized as an important
tool in ensuring the smooth functioning
of the rail system. See 49 U.S.C. 10746.
Historical Regulation of Demurrage.
Since the earliest days of railroad
regulation, parties have had disputes
about who, if anyone, should have to
pay demurrage. Certain principles for
allocating the liability of intermediaries
for holding carrier equipment became
established over time and were reflected
in agency and court decisions.1 After
reviewing recent court decisions,
however, we believe that it is
appropriate to revisit the matter and to
consider whether the Board’s policies
should be revised.
Demurrage collection cases may only
be brought in court, and thus much of
the law governing the imposition of
demurrage liability has been established
judicially. However, the Interstate
Commerce Act, as amended by the ICC
Termination Act of 1995, Public Law
104–88, 109 Stat. 803 (1995) (ICCTA),
also provides that demurrage is subject
to Board regulation. Specifically, 49
U.S.C. 10702 requires railroads to
establish reasonable rates and
transportation-related rules and
practices, and 49 U.S.C. 10746 requires
railroads to compute demurrage and to
establish demurrage-related rules ‘‘in a
way that fulfills the national needs
related to’’ freight car use and
distribution and that will promote an
adequate car supply. In the simplest
case, demurrage is assessed on the
‘‘consignor’’ (the shipper of the goods)
for delays in loading cars at origin and
on the ‘‘consignee’’ (the receiver of the
goods) for delays in unloading cars and
returning them to the carrier at
destination.2
1 See Responsibility for Payment of Detention
Charges, E. Cent. States (Eastern Central), 335 I.C.C.
537, 541 (1969) (involving liability of
intermediaries for detention, the motor carrier
equivalent of demurrage), aff’d, Middle Atl.
Conference v. United States (Middle Atlantic), 353
F. Supp. 1109, 1114–15 (D.D.C. 1972) (3-judge court
sitting under the then-effective provisions of 28
U.S.C. 2321 et seq.).
2 While the Interstate Commerce Act does not
define ‘‘consignor’’ or ‘‘consignee,’’ the Federal
Bills of Lading Act uses the term ‘‘consignor’’ to
refer to ‘‘the person named in a bill of lading as the
person from whom the goods have been received for
shipment,’’ 49 U.S.C. 80101(2), and the term
‘‘consignee’’ to refer to ‘‘the person named in a bill

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This agency has long been involved in
resolving demurrage disputes, both as
an original matter and on referral from
courts hearing railroad complaints
seeking recovery of charges.3 The
disputes between railroads and parties
that originate or terminate rail cars can
involve relatively straightforward
application of the carrier’s tariffs to the
circumstances of the case.
Complications can arise, however, in
cases involving warehousemen or other
‘‘third-party intermediaries’’ who
handle the goods but have no property
interest in them. A consignee that
owned the property being shipped had
common-law liability (for both freight
charges and demurrage) when it
accepted cars for delivery,4 but
warehousemen typically are not owners
of the property being shipped (even
though, by accepting the cars, they are
in a position to facilitate or impede car
supply). Under the legal principles that
developed, in order for a warehouseman
to be subject to demurrage or detention
charges, there had to be some other
basis for liability beyond the mere fact
of handling the goods shipped.5
What became the most important
factor under judicial and agency
precedent was whether the
warehouseman was named the
consignee on the bill of lading.6 Thus,
our predecessor, the Interstate
Commerce Commission (ICC), held that
a tariff 7 may not lawfully impose such
of lading as the person to whom the goods are to
be delivered,’’ 49 U.S.C. 80101(1).
3 E.g., Eastern Central; Springfield Terminal Ry.—
Pet. for Declaratory Order—Reasonableness of
Demurrage Charges, NOR 42108 (STB served June
16, 2010); Capitol Materials Inc. —Pet. for
Declaratory Order—Certain Rates & Practices of
Norfolk S. Ry., NOR 42068 (STB served Apr. 12,
2004); R. Franklin Unger, Trustee of Ind. Hi-Rail
Corp.—Pet. for Declaratory Order—Assessment &
Collection of Demurrage & Switching Charges, NOR
42030 (STB served June 14, 2000); South-Tec Dev.
Warehouse, Inc.—Pet. for Declaratory Order—Ill.
Cent. R.R., NOR 42050 (STB served Nov. 15, 2000);
Ametek, Inc.—Pet. for Declaratory Order, NOR
40663, et al. (ICC served Jan. 29, 1993), aff’d, Union
Pac. R.R. v. Ametek, Inc., 104 F.3d 558 (3d Cir.
1997).
4 Pittsburgh, Cincinnati, Chicago & St. Louis Ry.
v. Fink, 250 U.S. 577, 581 (1919); Norfolk S. Ry. v.
Groves (Groves), 586 F.3d 1273, 1278 (11th Cir.
2009), cert. denied, 131 S.Ct. 993 (2011).
5 See, e.g., Smokeless Fuel Co. v. Norfolk & W.
Ry., 85 I.C.C. 395, 401 (1923).
6 A bill of lading is the transportation contract
between the shipper and the carrier for moving
goods between two points. Its terms and conditions
bind the shipper, the originating carrier, and all
connecting carriers.
7 Historically, carriers gave public notice of their
rates and general service terms in tariffs that were
publicly filed with the ICC and that had the force
of law under the so-called ‘‘filed rate doctrine.’’ See
Maislin Indus., Inc. v. Primary Steel, Inc., 497 U.S.
116, 127 (1990). The requirement that rail carriers
file rate tariffs at the agency was repealed in ICCTA.
Nevertheless, although tariffs are no longer filed

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demurrage charges on a warehouseman
who is not the owner of the freight, who
is not named as a consignor or
consignee in the bill of lading, and who
is not otherwise party to the contract of
transportation.8
Recently, a new question arose: who
should bear liability when an
intermediary that accepts rail cars and
detains them too long is named as
consignee in the bill of lading, but
asserts either that it did not know of its
consignee status or that it affirmatively
asked the shipper not to name it
consignee? On that issue, the courts of
appeals have split.9 The legal debate
and resulting conflicting opinions
prompted the Board to reexamine its
existing policy and to assist in
providing clarification for the industry.
Conflict Among the Circuits. In
Groves, the United States Court of
Appeals for the Eleventh Circuit looked
to contract principles and concluded
that a party shown as a consignee in the
bill of lading is not in fact a consignee,
and hence is not liable for demurrage
charges, unless it expressly agrees to the
terms of the bill of lading describing it
as a consignee, ‘‘or at the least, [is] given
notice that it is being named as a
consignee in order that it might object
or act accordingly.’’ 10 On virtually
identical facts, the United States Court
of Appeals for the Third Circuit held in
Novolog that ‘‘recipients of freight who
are named as consignees on bills of
lading are subject to liability for
demurrage charges arising after they
accept delivery unless they act as agents
of another [party] and comply with the
notification procedures in [the]
consignee-agent liability provision [of]
49 U.S.C. 10743(a)(1).’’ 11 The statutory
with the agency, rail carriers may still use them to
establish and announce the terms of the services
they hold out.
8 Eastern Central, 335 I.C.C. at 541.
9 Compare Groves, supra, with CSX Transp. Co.
v. Novolog Bucks Cnty. (Novolog), 502 F.3d 247 (3d
Cir. 2007).
10 586 F.3d at 1282. Relying in part on Illinois
Central Railroad v. South Tec Development
Warehouse, Inc. (South Tec), 337 F.3d 813 (7th Cir.
2003), which did not directly decide the issue but
which indicated a predilection toward such a
result, the court in Groves found the warehouseman
not to be a consignee and thus not liable for
demurrage even though the warehouse accepted the
freight cars as part of its business and held them
beyond the period of free time.
11 502 F.3d at 254. The court in Novolog cited
Middle Atlantic, the Uniform Commercial Code,
and the Federal Bills of Lading Act to find that a
warehouseman (or, in that case, a transloader) could
be a ‘‘legal consignee,’’ even if it was not the
‘‘ultimate consignee.’’ 502 F.3d at 258–59. The
court found that a contrary result, such as the one
suggested in South Tec, would frustrate what it
viewed as the plain intent of section 10743: ‘‘to
facilitate the effective assessment of charges by
establishing clear rules for liability’’ by permitting
railroads to rely on bills of lading and ‘‘avoid

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notice provision of section 10743(a)(1),
which is also referred to in Groves,
states, among other things, that a person
receiving property as an agent for the
shipper or consignee will not be liable
for ‘‘additional rates’’ that may be found
due beyond those billed at the time of
delivery, if the receiver notifies the
carrier in writing that it is not the owner
of the property, but rather is only an
agent for the owner.12
After reviewing these recent court
decisions, the Board determined that it
needed to revisit its demurrage
precedent to consider whether the
agency’s policies accounted for current
statutory provisions and commercial
practices. Thus, on December 6, 2010,
the Board published an Advance Notice
of Proposed Rulemaking (ANPR) 13 that
raised a series of specific questions
about how the demurrage process works
and sought public input on whether the
Board should issue a new rule that does
not follow the reasoning of Novolog or
Groves, but that instead would provide
that demurrage charges may apply when
cars are accepted by a party with notice
of the carrier’s demurrage charges.
Shortly thereafter, the United States
Supreme Court denied a request that it
review the split in the circuits. Norfolk
S. Ry. v. Groves, 131 S.Ct. 993 (2011)
(mem.).
Additional information is contained
in the Board’s decision. The full
decision is available on the Board’s Web
site at www.stb.dot.gov.
This action will not significantly
affect either the quality of the human
environment or the conservation of
energy resources.
It is ordered:
1. Comments are due by June 25,
2012; replies are due by July 23, 2012.
wasteful attempts to recover [charges] from the
wrong parties.’’ Id. The court found warehouseman
liability equitable because the warehouseman—
which otherwise has no incentive to agree to
liability—can avoid liability by identifying itself as
an agent, whereas the rail carrier has no option but
to deliver to the named consignee. Id. at 259.
12 49 U.S.C. 10743(a)(1) states in full:
Liability for payment of rates for transportation
for a shipment of property by a shipper or consignor
to a consignee other than the shipper or consignor,
is determined under this subsection when the
transportation is provided by a rail carrier under
this part. When the shipper or consignor instructs
the rail carrier transporting the property to deliver
it to a consignee that is an agent only, not having
beneficial title to the property, the consignee is
liable for rates billed at the time of delivery for
which the consignee is otherwise liable, but not for
additional rates that may be found to be due after
delivery if the consignee gives written notice to the
delivering carrier before delivery of the property—
(A) of the agency and absence of beneficial title; and
(B) of the name and address of the beneficial owner
of the property if it is reconsigned or diverted to
a place other than the place specified in the original
bill of lading.
13 Demurrage Liability, EP 707 (STB served Dec.
6, 2010), 75 FR 76,496 (Dec. 10, 2010).

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2. A copy of this decision will be
served upon the Chief Counsel for
Advocacy, Office of Advocacy, U.S.
Small Business Administration.
3. This decision is effective on its
service date.
List of Subjects in 49 CFR Part 1333
Demurrage, Railroads.
Decided: May 3, 2012.
By the Board, Chairman Elliott, Vice
Chairman Mulvey, and Commissioner
Begeman.
Jeffrey Herzig,
Clearance Clerk.

For the reasons set forth in the
preamble, the Surface Transportation
Board proposes to amend title 49,
chapter X, subchapter D, of the Code of
Federal Regulations by adding part 1333
to read as follows:
PART 1333—DEMURRAGE LIABILITY
Sec.
1333.1
1333.2
1333.3

Demurrage defined.
Who can charge demurrage.
Who is subject to demurrage.

Authority: 49 U.S.C. 721.
§ 1333.1

Demurrage defined.

Demurrage is a charge that both
compensates rail carriers for the
expenses incurred when rail cars are
detained beyond a specified period of
time (i.e., free time) for loading or
unloading, and serves as a penalty for
undue car detention to encourage the
efficient use of rail cars in the rail
network.
§ 1333.2

Who may charge demurrage.

Demurrage shall be assessed by the
serving rail carrier, i.e., the rail carrier
providing rail cars to a shipper at an
origin point or delivering them to a
receiver at an end-point or intermediate
destination. A serving carrier and its
customers (including those to which it
delivers rail cars at origin or
destination) may enter into contracts
pertaining to demurrage, but in the
absence of such contracts, demurrage
will be governed by the demurrage tariff
of the serving carrier.
§ 1333.3

Who is subject to demurrage.

Any person receiving rail cars from a
rail carrier for loading or unloading who
detains the cars beyond the period of
free time set forth in the governing
demurrage tariff may be held liable for
demurrage if the carrier has provided
that person with actual notice of the
demurrage tariff providing for such
liability prior to the placement of the
rail cars. However, if that person is
acting as an agent for another party, that
person is not liable for demurrage if that

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person has provided the rail carrier with
actual notice of the agency status and
the identity of the principal.

Fish and Wildlife Service

Note: The following appendix will not
appear in the Code of Federal Regulations.

50 CFR Part 17

Appendix

[Docket No. FWS–R6–ES–2011–0019:
4500030113]

The additional information below is
included to assist those who may wish to
submit comments pertinent to review under
the Paperwork Reduction Act:
Description of Collection

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DEPARTMENT OF THE INTERIOR

Title: New Submissions Under the Board’s
Demurrage Liability Regulations.
OMB Control Number: 2140–XXXX.
STB Form Number: None.
Type of Review: New collection.
Respondents: Railroads that charge
demurrage pursuant to a tariff, rather than a
contract, and parties that receive rail cars as
shipper agents and wish to avoid liability for
demurrage under a tariff.
Number of Respondents: Approximately
650 railroads and approximately 75 receivers
acting as shipper agents.
Estimated Time per Response: No more
than 8 hours for each railroad; no more than
one hour for each shipper agent.
Frequency: Railroads charging the
demurrage under a tariff, rather than a
contract, would have to provide notice to
receivers of rail cars of the demurrage that
may accrue with each delivery of cars.
Similarly, persons receiving rail cars
pursuant to a tariff, rather than a contract,
would have to inform the servicing rail
carrier whenever they acted solely in agency
capacity in order to avoid potential
demurrage on those cars.
Total Burden Hours (annually): No more
than 2,208 (6,625 hours averaged over 3
years, based on the assumption that it will
take each of 650 railroads 8 hours to provide
initial notice to its customers (for a total of
5,200 hours) and that it will take each of an
estimated 75 warehouses that might consider
asserting agency status 1 hour to provide
notice to each an average of 19 customers (for
a total of 1,425 hours)). We anticipate that the
notices required under the proposed rule will
consist of electronic communications
between parties that are already in
communication regarding the transaction and
that the burden will be minimal after the first
year as the customer population for railroads
tends to be rather stable and only new
customers would have to be notified.
Total ‘‘Non-Hour Burden’’ Costs: None
identified.
Needs and Uses: The new information
collection, which involves notification
requirements, is necessary to ensure that
parties to rail transactions provide and/or
receive notice regarding any potential
liability for demurrage charges.
Retention Period: Under the proposed rule,
these records will not be collected or retained
by the agency, nor does the proposed rule
impose a retention requirement on the parties
to the transaction.
[FR Doc. 2012–11189 Filed 5–9–12; 8:45 am]
BILLING CODE 4915–01–P

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Endangered and Threatened Wildlife
and Plants; 12-Month Finding on a
Petition To List the Arapahoe Snowfly
as Threatened or Endangered
Fish and Wildlife Service,
Interior.
ACTION: Notice of 12-month petition
finding.
AGENCY:

We, the U.S. Fish and
Wildlife Service (Service), announce a
12-month finding on a petition to list
the Arapahoe snowfly (Capnia
arapahoe) as endangered and to
designate critical habitat under the
Endangered Species Act of 1973, as
amended (Act). After review of the best
available scientific and commercial
information, we find that listing the
Arapahoe snowfly as threatened or
endangered is warranted. Currently,
however, listing the Arapahoe snowfly
is precluded by higher priority actions
to amend the Lists of Endangered and
Threatened Wildlife and Plants. Upon
publication of this 12-month petition
finding, we will add the Arapahoe
snowfly to our candidate species list.
We will develop a proposed rule to list
the Arapahoe snowfly as our priorities
allow. We will make any determination
on critical habitat during development
of the proposed listing rule. In any
interim period, we will address the
status of the candidate taxon through
our annual Candidate Notice of Review.
DATES: The finding announced in this
document was made on May 10, 2012.
ADDRESSES: This finding is available on
the Internet at http://
www.regulations.gov at Docket Number
FWS–R6–ES–2011–0019. Supporting
documentation we used in preparing
this finding is available for public
inspection, by appointment, during
normal business hours at the U.S. Fish
and Wildlife Service, Colorado Field
Office, 134 Union Blvd., Suite 670,
Lakewood, CO 80228. Please submit any
new information, materials, comments,
or questions concerning this finding to
the above street address.
FOR FURTHER INFORMATION CONTACT:
Susan Linner, Field Supervisor,
Colorado Field Office (see ADDRESSES);
by telephone at 303–236–4773, or by
facsimile at 303–236–4005. If you use a
telecommunications device for the deaf
(TDD), please call the Federal
SUMMARY:

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Information Relay Service (FIRS) at
800–877–8339.
SUPPLEMENTARY INFORMATION:
Background
Section 4(b)(3)(B) of the Act (16
U.S.C. 1531 et seq.) requires that, for
any petition to revise the Federal Lists
of Threatened and Endangered Wildlife
and Plants that contains substantial
scientific or commercial information
that listing a species may be warranted,
we make a finding within 12 months of
the date of receipt of the petition. In this
finding, we will determine that the
petitioned action is: (1) Not warranted,
(2) warranted, or (3) warranted, but the
immediate proposal of a regulation
implementing the petitioned action is
precluded by other pending proposals to
determine whether species are
endangered or threatened, and
expeditious progress is being made to
add or remove qualified species from
the Federal Lists of Endangered and
Threatened Wildlife and Plants. Section
4(b)(3)(C) of the Act requires that we
treat a petition for which the requested
action is found to be warranted but
precluded as though resubmitted on the
date of such finding, that is, requiring a
subsequent finding to be made within
12 months. We must publish these 12month findings in the Federal Register.
Previous Federal Actions
On July 30, 2007, we received a
petition from Forest Guardians (now
WildEarth Guardians), requesting that
the Service consider for listing as either
endangered or threatened 206 species in
our Mountain-Prairie Region ranked as
G1 or G1G2 by the organization
NatureServe (except those that are
currently listed, proposed for listing, or
candidates for listing). The Arapahoe
snowfly was 1 of the 206 species
included in the petition. On March 19,
2008, WildEarth Guardians filed a
complaint indicating that the Service
failed to make a preliminary 90-day
finding on their two multiple-species
petitions—one for mountain-prairie
species, and one for southwestern
species. We subsequently published two
90-day findings, including one on
February 5, 2009 (74 FR 6122) for the
mountain-prairie species. That finding
concluded that the petition did not
present substantial scientific or
commercial information indicating that
listing may be warranted for 165 of the
206 species, including the Arapahoe
snowfly.
On April 6, 2010, we received a
petition, of the same date, from The
Xerces Society for Invertebrate
Conservation, Dr. Boris Kondratieff,
Save the Poudre: Poudre Waterkeeper,

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