SURFACE TRANSPORTATION BOARD

Demurrage & Accessorial Charges

October 24, 2019 by brian.oboyle

Demurrage is a charge that both compensates rail carriers for the expense incurred when rail cars are detained beyond a specified period of time (i.e., “free time”) for loading and unloading and serves as a penalty for undue car detention to encourage the efficient use of rail cars in the rail network.  49 C.F.R. § 1333.1.  Accessorial charges includes charges for diverting a shipment in transit, ordering a railcar but releasing it empty, weighing a railcar, tendering one railroad’s car to another railroad without a line-haul move, special train or additional switching services, or releasing a railcar with incomplete or incorrect shipping instructions.

Demurrage and accessorial charges are subject to regulation by the Surface Transportation Board under 49 U.S.C. § 10702, which requires railroads to establish reasonable rates and transportation-related rules and practices, and under 49 U.S.C. § 10746, which requires railroads to compute demurrage charges, and establish rules related to those charges, in a way that will fulfill national needs related to freight car use and distribution and maintenance of an adequate car supply.

Board Letters and Quarterly Reports

The Board sent letters to all seven Class I rail carriers on December 17, 2018, and again on May 7, 2020, requesting that they provide quarterly revenues from demurrage and accessorial charges for each quarter beginning in 2018 through 2020.