Q&A: Car days for ''closed gate'' receiver

Q&A: Car days for ''closed gate'' receiver

Copyright 2003, Traffic World, Inc.

Concerning rail demurrage discussed in the Sept. 8 issue, you advise that Saturdays, Sundays and holidays are excluded from computation of free time for loading and unloading rail cars. I take that to mean you believe if a car is placed on a Friday, then Saturday and Sunday would be free.

Two of our locations are on CSX Transportation. They are subject to CSX Tariff 8100, Items 8070 and 8075. CSX allows two free days for unloading cars, which are subtracted from the total car days to determine chargeable days. Saturday and Sunday are not excluded, so if a car is placed on Friday, our demurrage starts at midnight Friday, and Saturday and Sunday are car days. We have another location on Norfolk Southern and their rule is the same.

I''ve reviewed both carriers'' tariffs and you''re absolutely correct. CSX gives you a free ride for Thanksgiving, Christmas and New Year''s Day, while NS doesn''t even appear to do that. Quite evidently the rules are inconsistent among railroads, since my prior correspondent said specifically that in his industry free time is exclusive of Saturdays, Sundays and holidays.

My effort to generalize from this input was based on a long-ago recollection that free time never included the weekends or holidays, and I believe this was correct while the former Interstate Commerce Commission still had jurisdiction over the reasonableness of carrier rules. But looking back on past "Q&A"s, I find that one rail tariff over 20 years ago - just after enactment of the Staggers Rail Act, one of the early pieces of deregulatory legislation - did include Saturdays (although not Sundays), and clearly I''m out of touch with contemporary railroad practices.

Your remark about free time beginning at midnight the day after actual or constructive placement also triggered another regulatory memory. Back in regulatory days free time began at the 7:00 a.m. following placement (the start of the day shift at many shipping and receiving facilities), and the ICC actually required this; National Trucking & Storage Co. v. P. R. Co., 294 I.C.C. 605 at 613 (though it never issued formal regulations to that effect). This is another difference in modern practice.

Still, in those days free time was not infrequently only 24, not 48, hours - sometimes by carrier tariff, on other occasions by edict of the ICC''s Bureau of Car Service, which would issue such "car service orders" in response to complaints of car shortages in an effort to encourage prompt loading and prompt release of empties. So to some extent things even out.

In any event, all this leaves me back where I started in responding to the question that initiated this extended discussion of free time and demurrage (Traffic World, March 17). That question was from a "closed gate" receiver - one for whom all cars were constructively placed (held on railroad track inaccessible for unloading) until ordered to be switched in. The receiver didn''t work weekends and also had no switches on Fridays. He complained that, on cars constructively placed of a Thursday, his 48 hours'' free time would have expired before he could have the cars switched in for unloading on Monday. If the tariff to which he''s subject is akin to the CSX and NS tariffs you provided me, he''s right.

And if so, as I originally wrote, his only recourse is to challenge the practice as unreasonable. My original view was that this was virtually impossible to do effectively, inasmuch as it required a Surface Transportation Board finding of "market dominance" over the traffic by the carrier in question. Attorney Andrew P. Goldstein subsequently suggested a couple of alternate paths that might be explored (see the "Letters to TW" column, Traffic World, Apr. 7) which would be somewhat less arduous, though to my thinking both are uncertain based on legal construction and prior court decisions.

Indeed, I think you might well advance the same argument of unreasonableness as to the CSX and NS tariffs, since you too cannot commence loading or unloading during normal business hours before expiration of free time for cars placed late Friday. Especially if you find your carriers have a tendency to "bunch" deliveries toward the end of the week, resulting in excessive demurrage, you have a fair argument to make.

Still, I can understand the railroads'' thinking. On foreign cars they''re paying car hire charges over the weekends and holidays. And whether the car is foreign or domestic, those days represent no less lost revenue opportunity than any other day of the week. Even if you could overcome the legal hurdles to take your case to court or before the STB, I think your success on the merits would be uncertain. In my opinion your better bet, as I suggested to my earlier correspondent, is to seek to negotiate something with the railroads that would at least allow you 24 hours of normal business time - that is to say, nonholiday weekdays - to accomplish the loading or unloading.

-- Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at P.O. Box 76, Morganton, Ga. 30560; phone, (706) 374-7201; fax, (706) 374-7202; 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.