ARLINGTON, VA – National Association of Chemical Distributors (NACD) member and NACD Immediate Past Chairman Mathew Brainerd testified before the U.S. Surface Transportation Board about demurrage and accessorial charges levied by the freight rail industry. Brainerd is also the Chairman and owner of Brainerd Chemical Co. Inc. based in Tulsa, Oklahoma.
In his testimony, Brainerd stated, “Brainerd has been concerned about questionable demurrage charges for several years, but the problem has been exacerbated in the past 18 months by a reduction in the time allowed to accept rail cars before being subject to the fees — from 48 to 24 hours. There is no opportunity to negotiate the terms of delivery with customer service as the process for ordering and arranging for rail car switches to our plant is done completely online. Demurrage is intended to serve the public interest by facilitating the flow of commerce through the prompt loading and unloading of cargo. These fees were meant to improve efficiency, not generate nine-figure revenue lines for Class I railroads.”
He continued, “This unfavorable situation for rail customers has been exacerbated by the advent and implementation of Precision Scheduled Railroading (PSR) by the Class I railroads. PSR has created enormous delays for rail customers like Brainerd while also imposing more restrictive service conditions on us. To provide incentives for both customers and railroads to move product and rail cars more efficiently, Brainerd and NACD support the establishment of reciprocal demurrage — an arrangement in which the shipper or receiver would charge the same demurrage rate per day to the railroads when they fail to pick up or deliver rail cars.”
Brainerd concluded, “Reciprocal demurrage would provide railroads with a reason to move product and rail cars more efficiently and would help Brainerd and other rail customers to recoup some of the costs of lost business. Brainerd and other NACD members need reliable, efficient and affordable rail service in order to run our businesses successfully and serve our customers. We look forward to working with the board on demurrage reforms and other proposals to create a more favorable rail service environment.”