Beating Down Rail Demurrage Fees

For several years, IWLA – The Association for Logistics Outsourcing (www.iwla.com) has been active in attempting to reduce or eliminate demurrage – fees railroads charge when a warehouse does not unload freight in a timely fashion – it feels are being unfairly charged to its member who are third party logistics (3PL) providers.

“We aren’t asking for legal or legislative remedies,” says Joel Hoiland, president and CEO of IWLA. “They take too long to enact and cost too much to implement.”

Instead, the association is promoting expansion of a pilot project that was created and implemented by one of its members and one of the U.S.-based Class I railroads. The project waives demurrage when the warehouse meets objectively measurable performance factors.

The association met with Roger Nober, chairman of the Surface Transportation Board (STB) and senior members of his staff. IWLA provided specific examples of unfair demurrage charges and highlighted the 3PL-railroad pilot project.

“IWLA members believe a voluntary, cooperative program like the pilot project will benefit all parties concerned. It can create a win-win situation for both the railroads and the 3PLs involved,” said Hoiland.