Following a hard-fought battle over excessive demurrage charges and inconsistent rail service, scrap recyclers won a major victory towards improving the nation’s rail network for shippers and railroads alike. In a series of decisions, the Surface Transportation Board (STB) rebuked the railroads for unreasonable practices combined with non-transparent, inaccurate billing, and an unfair dispute resolution process. The decisions come after years of public comments, testimony, outreach on Capitol Hill, and other advocacy efforts by the Institute of Scrap Recycling Industries (ISRI) and its members.
“Unreasonable practices by railroads have cost the scrap recycling industry tens of millions of dollars annually, and caused interruptions in the manufacturing supply chain,” said Billy Johnson, chief lobbyist for ISRI. “ISRI and its members fought for a level playing field and to have their voices heard, and won. The recycling industry appreciates the STB providing an avenue to address our concerns and taking reasonable measures to correct the behavior of the railroads.”
Following the implementation of precision schedule railroading (PSR) at the start of 2019 by the Class 1 railroads, shippers began facing increased demurrage charges hundreds of times larger than in previous years. In some instances, the demurrage charges increased between 600 and 1000% year-over-year. Additionally, shippers had no realistic way to challenge these demurrage charges because the railroads maintained inaccurate and confusing billing information. Based on the STB decisions, railroads must develop more accurate billing, reliable and reasonable practices to avoid demurrage charges, and make it easier for shippers to challenge those charges.
“The STB’s rulings will allow for a better and more fair partnership between recyclers and railroads,” concluded Johnson. “When issues do occur, there will be a fair way to resolve disputes. This ensures that valuable commodity-grade scrap materials will consistently be delivered to manufacturers for the use in new everyday products.”