Client Alert
STB Seeks Additional Input on Proposed Rules on Class I Railroad Demurrage Billing Practices

May 8, 2020

By: and

On April 30, 2020, the Surface Transportation Board (Board) issued a Supplemental Notice of Proposed Rulemaking (SNPRM) in Docket No. EP 759, Demurrage Billing Requirements, seeking additional public input on possible modifications to proposed rules on demurrage billing practices. Those proposed rules were originally issued in this docket on October 7, 2019 and resulted from testimony and comments submitted in the Board’s Oversight Hearing on Demurrage & Accessorial Charges, Docket No. EP 754 (served April 8, 2019).

The proposed rules suggested that the following information, at a minimum, was to be included on or with Class I carriers’ demurrage invoices:

1. Unique identifying information of each car involved

2. The following shipment information, where applicable:

• Date the waybill was created;
• The status of each car as loaded or empty;
• The commodity being shipped (if the car is loaded);
• The identity of the shipper, consignee, and/or care-of party, as applicable; and
• The origin station and state of the shipment.

3. The dates and times of:

• Actual placement of each car;
• Constructive placement of each car (if applicable and different from actual placement);
• Notification of constructive placement to the shipper, consignee, or third-party intermediary (if applicable); and
• Release of each car.

4. The number of credits and debits attributable to each car (if applicable).

In the SNPRM, the Board has asked for public comment on the following modifications and expansions of the original proposals:

Additional Invoice Information
Based on the comments received in the NPRM, the Board is now considering requiring that the following additional information also be included on or with demurrage invoices issued by Class I carriers:

1. The date range (the Billing Cycle) covered by the invoice.
The SNPRM indicates that this type of information is already standard for several carriers, so that actually requiring it be provided to rail customers should not be burdensome.

2. The original estimated date and time of arrival (ETA) of each car (as established by the invoicing carrier) and the date and time each car was received at interchange either on or, alternatively, upon reasonable request from the invoiced party.
Many commenters asserted that the inclusion of this information would allow them to compare the original ETA to the actual car placement information and determine if carrier-caused problems (e.g., bunching) effected the timing of a car’s placement. This information would accordingly allow rail users to know when to dispute demurrage charges caused by a carrier’s actions and verify credits when applicable. Similarly, knowing when a delivering rail carrier received rail cars at interchange (if applicable) would help rail users identify upstream carrier-caused bunching. Accordingly, this proposal could provide rail users with enough information to determine the cause and validity of demurrage charges. And, as this information appears to be readily available to rail carriers, as it is used in the ordinary course of business to track car movement and place cars, requiring that it also be made available to rail customers would not appear to be a burdensome requirement.

3. The date and time each rail car is ordered in.
The SNPRM recognizes that the ordered-in date and time is essential to the calculation of demurrage at closed-gate facilities, so that the inclusion of this information in invoices would be valuable for both demurrage accrual and verification purposes. Further, disagreements over the ordered-in date and time may be the source of some demurrage disputes; as such, having this information to both parties may alleviate disputes on demurrage bills.

Machine Readable Data
The SNPRM also proposes requiring Class I carriers to provide access to demurrage invoicing data in a machine-readable format. In this way, rail users would be able to more easily verify the car movements and, accordingly, the applicability of demurrage charges. However, not all rail users have the means to process machine-readable data and not all rail carriers currently provide machine readable data. Accordingly, the Board is seeking comments on how to (1) make the data accessible to all rail users and (2) whether requiring this information would be unduly burdensome to carriers.

Actions to Ensure Demurrage Charges are “Accurate and Warranted”
In the initial proposed rules, the Board contemplated adopting a new regulation requiring Class I carriers take “appropriate action to ensure that demurrage charges are accurate and warranted” prior to issuing an invoice. Proposed 49 C.F.R. 1333.4(b). The Board received numerous comments on this proposed regulation and, as part of its ongoing consideration of this issue, has invited “further comments from the Class I carriers regarding what actions they currently take, and from all stakeholders on what actions Class I carriers reasonably should be required to take, to ensure that demurrage invoices are accurate and warranted.”

Opening comments on these proposed additions and modifications to the proposed rules in this docket are due by June 5, 2020. Reply comments are due by July 6, 2020.