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Norfolk Southern Makes Changes To Demurrage And Accessorial Charges

FreightWaves

Norfolk Southern (NYSE: NSC) is making changes to its tariffs governing demurrage and accessorial charges, the railroad said on Dec. 1 in an operations update.

The tariff changes are available here

Norfolk Southern (NS) is implementing a new tiered demurrage and storage structure to address cars that are held for seven days or longer, NS said. But demurrage rates will remain unchanged for cars that are held between one to six days, the railroad said.

The changes will become effective on April 1, 2020 so that customers can review the changes, ask questions and assess the impact these changes may have on their operations.

NS also said it has made tariff changes on accessorial charges, effective January 1, 2020. One pertains to overloaded cars that are delivered to their destination without being stopped en route for partial unloading. Another narrows the timeframe that customers have to file a claim with NS from three years to one year. 

"As a leader in the transportation industry, we continually strive to provide the best service possible at all our customer locations on a consistent basis. When proper forwarding instructions are not provided at time of release, it results in additional time and expense to switch out that railcar," said Ed Elkins, vice president of industrial products for NS, in a letter addressing the changes. 

"Going forward, NS reserves the right, in its sole discretion, to not pull a railcar that has been released without forwarding instructions and any railcars behind it. Beginning January 1, 2020, a new pull code will be activated that will require forwarding instructions be in place before a car can be released," the letter said.

The changes come as NS and other Class I railroads have modified their demurrage and accessorial charges as they implement precision scheduled railroading, an operational model that seeks to streamline rail operations and trim costs. The railroads have said that the changes in the fees are to encourage customers not to hold onto railcars for longer than needed.

But many shippers have pushed back against the changes, saying that the changes penalize shippers even when it's the railroads' fault for the held cars. The Surface Transportation Board, responding to shippers' requests, held a two-day hearing on demurrage and accessorial charges in May, and it proposed several initiatives in November aimed at addressing shippers' concerns. The STB has since received additional comments from both the railroads and shippers on the changes to demurrage and accessorial charges.

Image by Michael Gaida from Pixabay

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