April 19, 2006. CSX has announced that the following increase in demurrage rates will take effect on July 1, 2006.
- The daily demurrage rate for Railroad owned cars will be increased from $60.00 to $90.00.
- The daily demurrage rate for refrigerated cars will be increased to $150.00.
Although the updated CSXT 8100 Tariff has not been published as of this writing, the legally applicable terms and conditions are normally available on the 8100 page in the CSX website.
Rail carriers tend to follow each other’s pricing practices. Therefore it would not be surprising to see other carriers follow suite. Here are the demurrage fees for some of the other carriers: (Note: These are the typical fees but it can vary by commodity. Hazardous materials are often charged at a significantly higher rate.)
- KCS: $75
- NS: $60
- UP: $75
- CN: $75 ($60 as of July 1)
- BNSF: $75, ($50 for several Ag commodities)
About Demurrage
Demurrage is a charge for the detention of freight cars held by shippers or receivers beyond a prescribed free time. These charges are assessed for the purpose of expediting the release of freight cars thereby allowing better utilization. It was originally designed to offset the car hire paid to other roads. From the railroad’s perspective, demurrage is a fee charged for the extended use of railroad owned railcars whereas private car storage is a fee charged for the extended holding of industry owned or private railcars on railroad owned tracks.
One important facet to controlling demurrage costs is accurate visibility and tracking. RSInet, the web based rail transportation management software, makes it easy to control your demurrage costs by providing a real-time view of all inbound and outbound cars. It will also alert you to cars that are sitting idle at customer, terminal, or railroad locations. Contact RSI for addition information on RSInet or talk about additional strategies for improving your rail logistics.
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