ASLRRA Comment

BEFORE THE SURFACE TRANSPORTATION BOARD
WASHINGTON, D.C.
__________________________________________________

248841

ENTERED
DOCKET NO. EP 759
DEMURRAGE BILLING REQUIREMENTS Office of Proceedings
__________________________________________________November 6, 2019
Part of

NOTICE OF PROPOSED RULEMAKING
__________________________________________________ Public Record
COMMENTS OF THE
AMERICAN SHORT LINE AND REGIONAL RAILROAD ASSOCIATION
__________________________________________________

Keith T. Borman
Senior Vice President and General Counsel
American Short Line and Regional Railroad Association
50 F Street, NW, Suite 500
Washington, D.C. 20001-1564
Telephone: (202) 628-4500
Email: [email protected]
November 6, 2019

THE SURFACE TRANSPORTATION BOARD
WASHINGTON, D.C.
________________________________________________
DOCKET NO. EP 759
DEMURRAGE BILLING REQUIREMENTS
__________________________________________________
NOTICE OF PROPOSED RULEMAKING
__________________________________________________
COMMENTS OF THE
AMERICAN SHORT LINE AND REGIONAL RAILROAD ASSOCIATION
__________________________________________________
The American Short Line and Regional Railroad Association (“ASLRRA”) is a non-profit
trade association representing the interests of approximately 500 small railroads and 500 railroad
supply company members in legislative and regulatory matters. Small railroads operate 50,000
miles of track in 49 states, or approximately 38% of the national railroad network, originating or
terminating one out of every four railcars moving on the national railroad network, serving
customers who otherwise would be cut off from the network.
Background
On October 7, 2019, the STB issued a Notice of Proposed Rulemaking in Docket No. EP
759, Demurrage Billing Requirements, (“Demurrage NPRM”), in which it proposed certain
requirements regarding Class I carriers’ demurrage invoices and a requirement that a Class I
directly bill the shipper if the shipper and warehouseman agree to that arrangement and have
notified the railroad. This Demurrage NPRM is a companion proceeding with the STB’s decision
in Docket No. EP 757, Policy Statement on Demurrage and Accessorial Rules and Charges, that
was served on the same day as this notice.
In this proceeding the Board said that it issued the Demurrage NPRM as a result of the
testimony and comments in the Oversight Hearing on Demurrage & Accessorial Charges, Docket
No. EP 754. The Board states that it had invited participants in the oversight hearing to comment
on whether the tools available to manage demurrage and accessorial charges provide adequate data
for rail users to evaluate whether charges are being properly assessed and to dispute the charges
when necessary. In response, both at the hearing and before and after it, the STB said many
shippers and warehousemen expressed dissatisfaction with their experiences regarding demurrage
1

and accessorial charges, raising concerns about demurrage billing practices, including invoices
with insufficient information on them. Additionally, representatives from warehousemen raised
issues about their experiences.
Proposed Changes
In the Demurrage NPRM, the Board proposes to address “(1) certain requirements
regarding Class I carriers’ invoices, including what information should be included in demurrage
invoices and (2) a requirement that Class I carriers send any invoices related to transportation
involving a warehouseman to the shipper if the shipper and warehouseman have agreed to that
arrangement and have notified the rail carrier.” Demurrage NPRM at 2. It also invited parties to
comment on any other measures that might be appropriate to help further clarify demurrage billing
practices, to ensure the party causing delays resulting in demurrage charges pays for the charges,
and to promote timely resolution of demurrage disputes.
Regarding the requirements for demurrage invoices, the Board proposes a requirement that
all Class I railroad provide at a minimum the following information on any demurrage invoices:
•
•

•

•

The unique identifying information (e.g., reporting marks and number) of each car
involved;
The following shipment information, where applicable:
o The date the waybill was created;
o The status of each car as loaded or empty;
o The commodity being shipped (if the car is loaded);
o The identity of the shipper, consignee, and/or care-of party, as applicable;
o The origin station and state of the shipment;
The dates and times of (1) actual placement of each car, (2) constructive placement of each
car (if applicable and different from actual placement), (3) notification of constructive
placement to the shipper, consignee, or third-party intermediary (if applicable), and (4)
release of each car; and
The number of credits and debits attributable to each car (if applicable).

Demurrage NPRM at 9 -10.
In addition, the Board proposed that prior to sending a demurrage invoice, the Class I carriers must
take appropriate action to ensure that the demurrage charges are accurate and warranted consistent
with the purpose of demurrage.
ASLRRA Comments
ASLRRA has simultaneously submitted Comments in Docket No. EP 757, Policy
Statement on Demurrage and Accessorial Rules and Charges, and to the extent those Comments

2

address the proposals contained in the Demurrage NPRM, adopts them in this proceeding.
Regarding the specific proposals in this notice, ASLRRA offers the following Comments.
Comments on the Proposed Requirements for Demurrage Invoices
Although the Demurrage NPRM focuses on Class I railroads, the proposed rule could
adversely affect small railroads if the rule were to be extended to encompass those small railroads.
Even some of the Class I railroads do not have the current technology to provide all the information
the STB proposes to require be on invoices. See, Demurrage NPRM at 6. It is safe to state that no
small railroad possesses the anything close to the data processing capabilities of the Class I
railroads nor do they have the resources, large IT departments or technical capabilities to provide
all the information the proposed rule requires. While some small railroads utilize the RMI revenue
database for revenue and car reporting purposes, some do not and even those that do, do not have
a sophisticated means to translate from that database to demurrage bills processes. To undertake
equipping themselves to provide this information would be prohibitively expensive and divert
precious resources better used on improving their infrastructure and serving their customers.
Further, more than half of all small railroads in the United States currently operate as
handling line carriers. As such, they operate on a handling line basis in their interchange of traffic
with the connecting Class I railroads. In this arrangement, oftentimes the small railroad providing
the direct service to the destination customer is not provided all the information included in the
STB proposed format.
While ASLRRA agrees that small railroads should provide accurate demurrage statements
with as much information as reasonably possible, there are both structural and technical reasons
detailed demurrage billings as proposed by the STB simply may not be reasonable or possible for
small railroads. Small railroads will certainly try to comply with the requirements to the extent
they are capable of doing so and regardless will maintain a focus on open, productive, friendly,
and communicative relationships with their customers, which is the lifeblood of the small railroad
businesses.
Comments on the Proposed Rule on Issuing Invoices Directly to Shippers Instead of
Warehousmen
The Board proposes to require that serving Class I railroads send demurrage invoices
directly to the shipper instead of to the warehouseman. This would be required when the shipper

3

and warehouseman agree to such an arrangement and notify the Class I of the agreement. Again,
the STB does not propose to require Class II and III railroads to comply with this requirement.
As is the case with the proposed rule on invoice requirements, to impose this requirement
on small railroads would adversely affect small railroads if they were to be extended to encompass
them. They do not possess the staff, expertise or resources to ensure this requirement is met and
would not have a way to easily determine if the shipper and warehouseman have the necessary
agreement in place much less whether the Class I has been notified of an agreement.
Moreover, if invoicing of demurrage charge is to be made to a party different than the
consignee designated on the waybill for the shipment, then the shipper and consignee must provide
clear instructions and a binding concurrence for such a change to the serving
railroad. Additionally, the party to be billed must apply for credit with the serving railroad. This
is especially important for small railroads that may operate without full access to the shipping
instructions such as with handling carriers as noted above. If such accommodations require
additional expenses upon the serving carrier, STB should make allowances for the pass-through of
such expenses.
Comments on the Paperwork Reduction Act
The STB only addresses the burden placed on Class I railroads and estimates that the cost
of implementing the proposed rules would be negligible. Except for a table on Appendix B to the
Demurrage NPRM, it does not address the cost to small railroads if the proposed rules are extended
to them. Without any analysis, the STB cites a figure of 677 hours as the burden on non-Class I
railroads. There is no explanation regarding the source of this figure and therefore does not fulfill
the obligation of the Board to make findings under the Paperwork Reduction Act concerning small
railroads.
For the reasons stated above, ASLRRA agrees with the STB that Class II and III railroads
be exempted from the requirements of these proposed rules. Keeping in place the proposed
exemption of Class II and III railroads from new demurrage billing requirements is very
important. Placing global demands on the entire freight railroad industry for demurrage billing
requirements would likely create financial stress on those small railroads least able to comply with
the new regulatory demand.

4

Respectfully submitted,

Keith T. Borman
Senior Vice President and General Counsel
American Short Line and Regional Railroad Association

5