No shade for trade as still soaring freight rates start to take their toll
Skyrocketing freight rates across major tradelanes are eating into retailers margins and making the transport ...
© Peter Titmuss
The Surface Transportation Board (STB), the US regulatory body that covers rail and road transport, is set to follow its maritime equivalent, the Federal Maritime Commission (FMC), in investigating the imposition of demurrage fees on shippers by carriers, according to Material Handling & Logistics. As with shipping lines, intermodal operators stand accused of abusing the demurrage system to increase profits and which this article claims is the result of rail companies introducing Precision Scheduled Railroading (PSR) strategies which have improved carriers’ profitability, but led to reduced frequency of services for shippers: “A side of the PSR revolution has involved generating new and substantial revenues by hiking demurrage and other fees, while redesigning billing practices to make it nearly impossible for shippers to avoid the demurrage fees. As a result, these fees have become a prime source of income for the railroads to boost their bottom lines—in spite of the fact that they were originally justified by the railroads as incentives for encouraging the prompt return of their equipment.”
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