Rail Transportation Takes Center Stage

In May, ReMA participated in a two-day hearing held by the Surface transportation Board (STB) to examine the excessive demurrage changes the railroads have imposed on rail shippers. Ben Abrams of Consolidated Scrap Industries and Bobby Trisch of SA Recycling both testified at this hearing describing their experiences with the rail policy of Precision Scheduling Railroading (PSR). PSR has resulted in additional demurrage charges between 600-1000%. Much of these demurrage charges stem from the rail service problems rather than problems from shippers. In our testimony and statements we explain that as a result of poor and inconsistent rail service, rail cars don’t get delivered and then get ‘bunched’ resulting in demurrage charges to shippers. The STB also heard from the railroads about PSR but were not impressed with their rationale for imposing thee excessive charges largely as a result of their poor rail practices.

Later in June, ten ReMA members met with the STB on revoking the commodity exemption under the STB 704 proceeding arguing that the commodity exemption is outdated and puts exempted commodity shippers at a great disadvantage since it restricts access to the STB for service or rate disputes among other options. Currently, an exempted shipper would need to demonstrate to the STB on a case-by-case basis on whether or not they may bring a dispute to the STB. In other words, the current policy requires an expensive additional step (estimated at $5 million with no guarantee) towards getting a remedy to a service or price dispute. While the proceeding is focused on ferrous scrap, the STB is examining revoking the commodity exemption for all commodities making this proceeding extremely import for all scrap commodities. The rail industry has replied arguing that the current analysis of prices (also known as a waybill analysis is not enough to justified revoking the commodity exemptions.

During our meetings, ReMA and others argued that the removal of ‘free days’ or credits is leading to these excessive demurrage charges. ReMA strongly suggested that these credit days be restored and reciprocal Privately-owned rail cars are treated worse than system-wide cars. ISRI’s members also argued that when private cars go missing or are delayed, the railroads should have to pay the owners a reciprocal rate to demurrage. Other issues included the STB rate review task force recommendations which would streamline the process for resolving disputes quickly rather than the current costly and time intensive process.

During ISRI’s fly-in, many ReMA members educated members of Congress about the rail service issues with many Congressional offices offering support. ReMA will be pursuing the rate review proposal at the STB urging them to adopt an approach that allows small shippers to have access to the STB’s dispute resolution process regardless of whether they are exempt or not.

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