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Rail News Home Federal Legislation & Regulation

5/8/2012



Rail News: Federal Legislation & Regulation

STB proposes new demurrage liability rule


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Yesterday, the Surface Transportation Board (STB) announced it’s proposing a rule that would make any rail-car receiver who detains cars beyond specified "free time" responsible for paying demurrage charges as long as cars are accepted with notice of demurrage terms prior to delivery.

Demurrage fees compensate railroads for the time their equipment is held out of their transportation network and penalizes parties for detaining cars too long. Differences among recent court decisions highlight the need for uniformity on demurrage liability, particularly regarding the issue of which party —receiver or intermediary— should be liable when an intermediary detains cars too long, STB officials said in a prepared statement.

“We expect this rule to bring clarity to what has become a murky legal area,” said STB Chairman Daniel Elliott III. “It should simplify the roles and responsibilities of all parties in the chain of rail-car movements, realigning them with actual industry practices and enhancing efficiency of movements.”


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