International Paper has joined dozens of other companies to testify in a Surface Transportation Board hearing on railroad demurrage fees scheduled for May 22 in Washington, DC. Demurrage is a fee charged to the carrier by the railroad for the extended use of railcars and tracks. These fees are typically assessed around delays in loading or unloading and undue detention of the transportation equipment. However, these penalties are often not the fault of the shipper. As the largest rail box car shipper in the United States, International Paper has filed an intent to participate in the hearing. Jeanne Sebring, who recently retired from International Paper as its Director of Logistics, NA, and who continues to serve as a strategic consulting resource for the company, will present International Paper’s testimony.
This hearing arises from concerns expressed by users, including International Paper, of the freight rail network and other stakeholders about changes to demurrage and accessorial tariffs being implemented by various rail companies. Over the last 2 years, our demurrage rates have more than doubled, and in some cases increased 39 times since 2017. This is largely due to a Precision Scheduled Railroading system implemented by the rail industry. This has created an unreliable and inconsistent car supply for our facilities that rely on rail. In one case over the last 12 months, fewer than 43% of weekly car orders were filled to a target rate of 95% or better.