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NGFA Urges STB to Improve Rule Correcting Rail Carrier Charges

The National Grain and Feed Association (NGFA) on Nov. 6 submitted a detailed 22-page statement to the federal Surface Transportation Board (STB) urging that it make significant changes to its Oct. 7 proposed policy statement that is designed to encourage Class I rail carriers to amend their demurrage and accessorial practices and charges to make them commercial fair, as well as reciprocal if they are the cause of delays that trigger such charges.

While commending the agency for developing the draft policy statement and conducting an exhaustive May 22-23 public hearing that demonstrated rail carriers’ egregious demurrage and accessorial practices, the NGFA said its “strong preference” was that the STB utilize its statutory authority and precedent to determine proactively that specific railroad practices are unlawful and direct that they amend their tariffs accordingly. The NGFA’s preferred approach would allow rail customers to submit “show-cause” filings or petitions to the STB calling on the agency to declare that a given carrier had not complied and order that the railroad take corrective action. NGFA said “this would be a much more accessible, cost-effective and timely approach than the STB issuing general policy guidelines” to be fleshed out only through formal complaint proceedings.

“The NGFA is disappointed by the (STB’s) proposal not to establish bright-line rules to govern the commercial fairness, commercial achievability and reciprocity of rail carriers’ demurrage and accessorial tariffs,” the statement read. “As has been amply demonstrated, the Class I railroads have little interest or incentive to be forthcoming or altruistic in amending their demurrage and accessorial policies voluntarily to conform with even the best principles and guidance developed by the agency….[T]here is very little prospect that the current situation will improve in any demonstrable way unless significant improvements are made to the (STB’s) proposed approach.”

If the STB retains its current proposed approach of issuing policy guidelines, the NGFA urged that it make the following specific improvements:

  • Propose rules or otherwise adopt a streamlined and abbreviated procedural schedule for resolving demurrage and accessorial complaints brought by shippers and receivers so that a decision is rendered in no more than 45 days, with a separate 15-day timeline for deciding disputes involving incorrect invoicing and dispute-resolution tariff terms, conditions and practices.
  • Establish an advisory committee to provide input to the STB on implementing the agency’s general principles on demurrage and accessorial practices.  Such an advisory committee would help enable continued monitoring of changes made by railroads to their demurrage and accessorial rules, practices and charges that may warrant modification or updating of the STB’s general principles.

The NGFA also recommended that the STB make significant refinements of its proposed policy guidance to address railroad practices that are not commercially fair, reciprocal or achievable by agricultural facilities. These improvements are outlined here.

The NGFA’s statement was supported by four other national agricultural organizations: the Agricultural Retailers Association, National Oilseed Processors Association, North American Millers’ Association and Pet Food Institute.

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