SCD: 'Insult to injury': Record rail demurrage adds to shipper costs

SUPPLY CHAIN DIVE reports:

Railroads set a new record in 2021 — but not a favorable one from a shipper’s perspective.

The seven Class I railroads that operate in the United States collected $1.18 billion in revenues from demurrage fees during the first three quarters of 2021. That’s the highest annual figure recorded since at least 2011, according to data reported to the Surface Transportation Board. And shippers often ended up on the receiving end of the bill.

The ballooning revenues, created in part by a surge in imports and transportation demand, have raised a critical question which shippers and railroads fundamentally disagree on: Who’s at fault for congestion?

The two parties point the finger at each other as to who should take responsibility for bottlenecks — and the associated costs.

Shippers say they were on the hook for fees even in cases where reduced rail service prevented them from accessing their cargo…

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