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>From the Surface Transportation Board, Washington, D.C.
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The Surface Transportation Board announced today that it is proposing a
rule providing that any person receiving rail cars that detains those cars
beyond specified "free time" may be responsible for paying demurrage
charges, so long as that person accepts cars with actual notice of the
demurrage terms prior to the cars' delivery.
Demurrage serves two primary
functions. First, it compensates
railroads for the time their
equipment is held out of the
transportation network. Second, it
penalizes parties for detaining
rail cars for too long, thereby
encouraging prompt return of cars
into the transportation network.
Differences among recent court
decisions highlight the need for
uniformity on demurrage liability,
particularly on the issue of which
party—receiver or
intermediary—should be liable when
an intermediary detains rail cars
for too long.
In announcing the proposal, Board
Chairman Daniel R. Elliott III
said,
"We expect this rule to bring
clarity to what has become a murky
legal area. 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."
The Board's Notice of Proposed
Rulemaking in Demurrage Liability,
EP 707
( http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/42239?OpenDocument )
, is available for viewing and
downloading at the Board's website
at www.stb.dot.gov .
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