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<p>NATIONAL GRAIN AND FEED ASSOCIATION leaders are asking the Surface Transportation Board to continue requiring rail carriers to report weekly service metrics to avoid more tie-ups in rail service. <em>(Photo by Hulton Archive/Getty Images).</em></p>

NGFA urges railroad reporting of demurrage invoices

Comments to STB ask for more information regarding rail customers’ review of accuracy of demurrage invoices.

The National Grain & Feed Assn. (NGFA) is urging the federal Surface Transportation Board (STB) to require the nation’s largest railroads to provide additional information to rail customers so they can better verify the accuracy of carriers’ demurrage bills.

In a statement submitted to the agency on June 5, NGFA emphasized that Class I railroads’ invoices for demurrage and accessorial charges frequently are inaccurate and impose “burdensome, tedious, time-consuming and costly efforts” on behalf of rail customers to investigate and challenge.

“Railroads generally have placed the sole burden on their customers to prove demurrage and accessorial charges (which generally are computer generated based solely on train movement data) are not accurate or valid,” NGFA wrote. “Further, railroads have given themselves sole discretion to reject or modify an invoice that is subject to challenge from a rail customer."

Data submitted to STB by Class I rail carriers has shown that each generates millions of dollars a year through the imposition of demurrage charges, NGFA said in its news release.

Demurrage is designed to facilitate the efficient utilization of rail equipment, including locomotives, cars and track controlled by both railroads and their customers. In reality, agricultural shippers and receivers own or lease more than 80% of railcars and virtually 100% of tank cars. However, demurrage charges are non-reciprocal in that they are assessed only by railroads against customers that do not load or unload cars within strict time limits the carriers impose, often of 24 hours or less. In many cases, according to NGFA, the delays are attributable to lack of performance by railroads, including late placement of trains at facilities or so-called “bunching” of cars in quantities that exceed what the agricultural facility has requested or can load or unload efficiently.

In its statement, NGFA said it supports STB requiring railroads to provide additional specific minimum information to facilitate rail customers’ review of the accuracy of demurrage invoices. NGFA’s statement also identified additional information that it recommended carriers should be required to submit, including the billing cycle covered by the demurrage invoice, the original estimated date and time of arrival of each car, the date and time the cars are actually placed for loading or unloading at the facility as well as the date and time the cars are empty and ready to be pulled from the facility and information on dates the cars were scheduled to be switched into a facility from a rail yard or interchange point.

NGFA also supports a requirement that the billing information railroads provide to their customers be in a commonly used, machine-readable format, such as Excel spreadsheets, and that the railroad provide a “concise explanation” of how each charge was calculated and the specific reasons for why it is being assessed.

In addition, NGFA recommended that railroads be required to inform STB in writing of the specific steps taken to ensure the accuracy of their invoices, with the agency making those reports publicly available on its website.

Finally, NGFA suggested that STB’s Office of Rail Customer & Public Assistance create a portal on its website that rail customers could use to report incidents of erroneous invoices generated by railroads to facilitate transparency and the agency’s monitoring function. NGFA said it believes STB "should communicate directly with senior management of any Class I carrier that exhibits a pattern of repeatedly generating inaccurate billings to discuss and determine corrective actions that should be taken.”

NGFA also encouraged the agency at some point to amend its recently issued Policy Statement on Demurrage & Accessorial Rules & Charges to recommend that rail carriers – particularly repeat offenders – provide non-expiring credits to their customers that successfully challenge erroneous invoices “to partially compensate them for the time, effort and cost expended in challenging such billings.”

TAGS: Policy
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