The new rules are intended to address rail customers’ widespread concerns raised during the Demurrage Oversight Hearing held in May 2019 about the lack of sufficient information provided on demurrage invoices that would allow them to verify and dispute erroneous charges. The Board stated that the rules will enable rail users “to validate demurrage charges, properly allocate demurrage responsibility, and modify their behavior if their own actions led to the demurrage charges.” The Board’s final rule follows the notice of proposed rulemaking issued on October 7, 2019, and the supplemental notice of proposed rulemaking issued on April 30, 2020.
The new rules require Class-I railroads to provide the following minimum information on or with their demurrage invoices:
- The billing cycle covered by the invoice;
- The unique identifying information (e.g., reporting marks and number) of each car involved;
- Where applicable, information about, among other things, the date the waybill was created, the status of each car as loaded or empty, the commodity being shipped, the identity of the shipper, consignee and/or care-of party, and the origin station and state;
- The dates and times of, among other things, estimated arrival, receipt at the last interchange, actual/constructive placement and ordered-in and release of each car; and
- The number of credits and debits attributable to each car.
In regard to the requirement for Class I railroads to provide machine-readable access to the minimum information, the Board defines “machine readable” as data in an open format that can be easily processed by computer without human intervention. The Board also defines “open format” as a format that is not limited to a specific software program and not subject to restrictions on re-use. In other words, Class-I rail carriers will be free to choose the program with which to provide machine-readable data, as long as it is in an open format as defined in the regulations.
The Board decided not to adopt a proposed rule that would have required Class-I carriers to take appropriate action to ensure that the demurrage charges are accurate and warranted. That said, the Board has clarified that it expects rail carriers to take reasonable actions to ensure the accuracy of the invoices, and that Class-I carriers’ invoicing protocols and procedures will be considered in the reasonableness analysis of demurrage charges.
FOR MORE INFORMATION
For more information about the Board’s final rule, please contact:
Karyn A. Booth