THE customer is almost always wrong in the eyes of Class I railways when it comes to demurrage complaints to the regulatory Surface Tranportation Board (STB), reports the American Journal of Transportation.
'I am troubled about reports that Class I railroads are continuing to impose charges when the receivers have no means to facilitate release of their containers,' STB chairman Martin Oberman said in a letter to major US railways.
Leading the railway defence was Union Pacific CEO Lance Fritz, who replied: 'Container congestion is directly correlated to the lack of available space in the customers' warehouses. The drayage and warehouse operations in major markets have been slow due to outbound drayage processing.'
Mr Fritz said that the railway has tried to ease the burden on truckers.
'Union Pacific recognises the current difficulty for dray carriers to manage efficiently the outbound movement of containers once they are in a stacked location,' he said.
To ease the stress on our ocean carrier partners, Union Pacific implemented a policy to cap fees at US$2,450 in Global 4 (a Chicago up intermodal facility) when the container is in-stack. Additionally, we have temporarily opened our Global 4 intermodal facility, near Chicago, to private chassis to allow more options for shippers to out-gate their containers,' he said.
Burlington Northern Santa Fe CEO Katie Farmer said demurrage is charged when shippers do not pick up their containers.
'We take the aggressive measures to improve rail performance. However, these measures are largely meaningless if receivers are not ready to pick up those containers,' she said.
Ms Farmer also blamed the lack of 24/7 supply chain capacity for not moving containers with sufficient speed to ensure fluidity. 'Operating 24/7 in all parts of the supply chain, not just rail, would generate substantial capacity immediately, she said.
'We do believe that there is enough physical capacity present across the national supply chain to handle the current volumes. The amount of chassis, port and rail terminal capacity, rail equipment, and employee resources is sufficient to handle the current volumes, but only if all parts of the supply chain do their part,' Ms Farmer said.
CSX Corporation president and CEO James Foote wrote: 'Some of our customers do a better job than others of managing a constant flow of containers into and out of our terminals.'
Said Mr Fritz: 'Shippers and receivers are responsible for their decisions to over extend their capacity in shipping and receiving, which congests the supply chain. This over extension is beyond our control. Union Pacific has performed efficiently in out-gating containers from our intermodal ramps.'
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'I am troubled about reports that Class I railroads are continuing to impose charges when the receivers have no means to facilitate release of their containers,' STB chairman Martin Oberman said in a letter to major US railways.
Leading the railway defence was Union Pacific CEO Lance Fritz, who replied: 'Container congestion is directly correlated to the lack of available space in the customers' warehouses. The drayage and warehouse operations in major markets have been slow due to outbound drayage processing.'
Mr Fritz said that the railway has tried to ease the burden on truckers.
'Union Pacific recognises the current difficulty for dray carriers to manage efficiently the outbound movement of containers once they are in a stacked location,' he said.
To ease the stress on our ocean carrier partners, Union Pacific implemented a policy to cap fees at US$2,450 in Global 4 (a Chicago up intermodal facility) when the container is in-stack. Additionally, we have temporarily opened our Global 4 intermodal facility, near Chicago, to private chassis to allow more options for shippers to out-gate their containers,' he said.
Burlington Northern Santa Fe CEO Katie Farmer said demurrage is charged when shippers do not pick up their containers.
'We take the aggressive measures to improve rail performance. However, these measures are largely meaningless if receivers are not ready to pick up those containers,' she said.
Ms Farmer also blamed the lack of 24/7 supply chain capacity for not moving containers with sufficient speed to ensure fluidity. 'Operating 24/7 in all parts of the supply chain, not just rail, would generate substantial capacity immediately, she said.
'We do believe that there is enough physical capacity present across the national supply chain to handle the current volumes. The amount of chassis, port and rail terminal capacity, rail equipment, and employee resources is sufficient to handle the current volumes, but only if all parts of the supply chain do their part,' Ms Farmer said.
CSX Corporation president and CEO James Foote wrote: 'Some of our customers do a better job than others of managing a constant flow of containers into and out of our terminals.'
Said Mr Fritz: 'Shippers and receivers are responsible for their decisions to over extend their capacity in shipping and receiving, which congests the supply chain. This over extension is beyond our control. Union Pacific has performed efficiently in out-gating containers from our intermodal ramps.'
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