July 25, 2019

The House Subcommittee on Railroads, Pipelines, and Hazardous Materials held a “Railroad Shippers Roundtable” on July 25, following up on the June 20 hearing. The various participants were in consensus regarding their most pressing issues, namely faulty communication with railroad companies and problematic demurrage and accessorial charges.

Senior VP of International Paper, Mike Amick, voiced approval for the goals behind precision scheduled railroading (PSR); however, he continued to point out a lack of reciprocity in the demurrage and accessorial charges levied on shippers. VP of Transportation, Packaging Corporation of America (PCA), Ross Corthell; President of Solvay North America, Mike Lacey; and VP of Kinder Morgan Terminals (KMT), Josh Etzel, each confirmed their experiences where they were charged hefty fees for errors committed by the rail companies.

“The railroads will create a lot of bunching through transit variability,” said Corthell “… and the plant can’t physically take all the cars that have been bunched up … and so the railroad will assess a demurrage charge to those cars.” This was one of several situations the panel described where shippers were penalized by no fault of their own. Corthell continued to say, “…reciprocity would say ‘look, if that delay was caused by the railroad not only should you not charge me… you should offer a credit because you’re delaying my asset’.” In addition to issues collecting the cars, PCA’s data indicates that the railroads miss 22% of car switches causing constant delays and rate issues.

The panel also discussed the shortage of labor caused by implementation of PSR, especially concerning the support sector. Shippers can only file complaints to railroad companies online and must manually enter any data compiled as evidence into the website. President of Solvay North America, Mike Lacey, said that the smallest of disputes were consistently forced up the chain to his desk and most of the time nothing would be done to address and resolve them.

Corthell added that cutting down customer service employment has caused an insufficiency in knowledge pertaining to specific stations and locales. Employees do not know how to resolve many situations and lack the power to take action in the cases they do understand. The participants generally supported more efficient processes, which PSR is intended to implement, but emphasized more accountability of railroad operations along with streamlined access to file rate cases and complaints.

Video of the full roundtable discussion can be viewed here.