ACD Press Release

Arlington, VA – Yesterday, the National Association of Chemical Distributors (NACD) submitted comments to the U.S. Surface Transportation Board (STB) in support of a petition requesting that the Board establish rules incentivizing the use of reciprocal demurrage among Class I railroads. Reciprocal demurrage incentivizes the efficient use of private railcars by requiring Class I railroads that delay the return of such cars beyond a reasonable period to compensate non-railroad suppliers of such cars.

“A substantial percentage of NACD members receive products via rail cars and greatly depend on reliable and affordable rail service to meet the needs of their customers and remain competitive in the global market,” said NACD President and CEO Eric R. Byer. “Ongoing disruptions to the U.S. supply chain caused by greed among ocean carriers and Class I railroads are leading to higher costs to consumers and shortages of essential products used in everything from water treatment to PPE production.”

The lack of reciprocity causes small businesses to be burdened with millions of dollars in lost profits, additional costs, and lower returns on their investments. Granting the Petition would allow the Board to address this inconsistency and hold railroads accountable for their inefficient use of private railcars just as shippers are responsible when they delay the return of railroad-supplied cars. 

Specifically, the Petition proposes the Board to establish a “private railcar delay charge” that will be assessed by a private railcar provider if a railroad exceeds the “allowable transit idle time.” NACD strongly believes that the proposed rules are reasonable and necessary and fully supports the Petitioners’ proposal.