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WASHINGTON (May 4, 2020) ─ The Surface Transportation Board (STB) just released a series of decisions to provide greater clarity and accountability regarding the use of railroad demurrage practices. A demurrage charge is typically used to compensate rail carriers for delays in processing railcars and to prevent railcars from being held too long by shippers. However, shippers have recently been subjected to a dramatic increase in demurrage charges, which led to several recent hearings by the STB and Congress to examine potential abuses of the charges by railroads. ACC and its member companies provided testimony at both hearings.

The American Chemistry Council’s President & CEO, Chris Jahn issued the following statement regarding the STB’s announcement:

“We commend the Board for carefully considering everyone’s input and taking action on an issue that has harmed many manufacturers across the country. Demurrage charges are supposed to create incentives to keep the rail network running efficiently, not create a new profit center for the railroads.

“In its new Policy Statement, the Board has sent a strong message that rail carriers may not simply use demurrage charges as another revenue stream. The policies announced by the STB set clear guidelines for the appropriate use of these charges, which should help prevent rail customers from being subjected to unreasonable and excessive charges that penalize them for circumstances beyond their control.

“We look forward to providing comments on potential additional requirements for demurrage invoices, and working with the commissioners and their staff on the STB’s new demurrage policies.”

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