Our firm is a commercial warehouse with capability of unloading four rail cars at a time; that is, we have four rail doors.
We are receiving demurrage invoices from the short line railroad that is our only rail provider. This railroad invoices us for demurrage for cars that are "bunched."
They say that in some instances they receive the cars bunched from a Class I railroad they work with, or sometimes they allow the cars to accumulate at their interline point due to their lack of sufficient power to transport them up a particular grade.
Their tariff states that they are not responsible for the bunching of cars, and that is not a reason for nonpayment of demurrage. Neither are they responsible for "acts of God," such as happened when torrential rains wash out their tracks and/or bridges.
How can we, as a warehouse, be held responsible for demurrage charges when they are caused by acts beyond our control? I realize that possibly some of their clients see a rail car as a mobile storage facility, however we are not one of those, as we unload cars the day that they are placed at our doors.
In the past shippers have consigned the product to us as the named warehouse, but we are not the beneficial owner. Recently we have attempted to correct this by advising our clients to show the owner/depositor of the products as the consignee in care of our company.
What is our responsibility regarding these charges, if any, and can we advise the rail carrier to "go bark up another tree" and insist that they invoice the owner of the goods?
You're really asking two questions here: (a) how can you fight the railroad about bunching cars, and (b) how can you shift the burden of carrying that fight to somebody else.
I can't really help you much with the first question. To be sure, the law still obliges railroads to maintain "reasonable rules and practices" related to car service; 49 U.S.C. ? 11121(a)(1). And it's arguable (and has in the distant past been found) that "bunching" cars for delivery isn't reasonable.
But trying to win that battle before the Surface Transportation Board would be shoveling sand uphill against the tide. There are too many variables, too many sets of circumstances for a generic resolution, and besides the STB is strongly disinclined these days to intervene in just about any shipper-carrier dispute.
Since you're only served by the one line you don't have a lot of leverage, but your best bet is to negotiate with your railroad. Your goal is to get it to ease off on the more egregious problems, especially those caused by its own operating convenience.
In the course of this you can wave around the threat of STB action (empty though it is); and you can also hold out a carrot by working out some kind of contract with the carrier. I'm not sure you'll succeed, but it never hurts to try.
Getting the monkey off your own back, on the other hand, is easier; in fact, you've already done what's necessary so long as your customers follow through.
Demurrage charges are "to the shipment" - that is, payable by the named parties to the contract of carriage. Right now, being designated as consignee, you're one of those named parties. You may not have executed the contract, but by accepting delivery you accept it as well and render yourself thereby liable under its terms.
Beneficial ownership of the goods isn't relevant to this.
Your proposal that the rail bills of lading show your customer as the consignee and yourself only as "in care of," on the other hand, changes things completely. Now you're no longer acting as principal but only as agent; the agency is disclosed on the shipping documents; and the carrier can't hold you liable but must look instead to your customer.
In the real world, of course, this is going to be effective for about 35 minutes, which is the time it'll take for your customers to start receiving the demurrage bills. At which point you may expect them to start raising a huge stink.
I mean, you're already crabbing to me about paying bills for "acts that are beyond [your] control." If they're beyond your control and you're on the spot, how much more are they beyond the control of your customers who aren't even in the neighborhood?
And guess who's going to take the heat?
So I'm afraid you haven't solved your problem, all you've done is redirect it a little. Instead of being directly liable to the railroad you're answerable to your irate clients for the same bills that are causing you all that grief to begin with.
See how this works for you; maybe your customers will swallow the bills with more aplomb than I expect. But in the end, as the one who's physically present - as well as the only one with any kind of relationship with your local short line carrier - I think you're going to have to bite the bullet and deal with the railroad.
Take heart; if you go at this is a non-confrontational manner (you catch more flies with honey than you do with vinegar), you may well be able to at least reduce the problem to something more manageable.
-- Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, (843) 559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the 536-page compiled edition of past Q&A columns, published in 2001, at $80 plus shipping.