Thursday, October 8, 2009

IWLA Efforts May Have Changed Class One's Change of Demurrage Liability

09/29/09 (Des Plaines, IL) – The International Warehouse Logistics Association (IWLA) has asked the Senate Commerce Committee to include demurrage pricing practices in the pending legislation to reauthorize the Surface Transportation Board. IWLA’s legislative request is simultaneous with a recent announcement by CSX Transportation (CSXT), “some” warehouses will no longer be billed demurrage charges. This is a major development for the IWLA, in that a Class I railroad recognizes that third-party warehouses are not consignees or a party to the transportation contract, and therefore are not liable for demurrage charges. CSXT is also providing an option for demurrage to continue to be billed to the warehouse operator by way of a separate agreement.

Since 2001, IWLA has been working tirelessly to lessen demurrage liability for members, with the prime objective of eliminating demurrage liability in its entirety. In November 2008, Section 2 of the Standard Terms and Conditions for Merchandise Warehouses was revised by IWLA in an effort to combat the often complex and unfair demurrage practices of the railroads.

Section 2 is the foundation for a current legislative effort by IWLA to urge the Senate Commerce Committee to include an amendment in the pending Surface Transportation Board Reauthorization bill to eliminate demurrage liability for most third-party warehouse logistics companies. Click here to read Joel Anderson’s letter to the Senate Commerce Committee, detailing IWLA’s legislative proposal. IWLA’s Rail Council is currently reviewing side-track agreements and forming a strategy to push the legislative amendment forward. Questions should be directed to IWLA’s Joel Anderson at janderson@iwla.com.