IWLA asks BNSF to drop new demurrage rules
The International Warehouse Logistics Association, a trade organization for third-party logistics providers in North America, has asked BNSF Railway to cancel new demurrage rules that the IWLA believes will create delays in rail shipments.
The ILWA said new demurrage rules, implemented by BNSF July 1, changed demurrage calculation from a monthly balancing of car days used against car credits obtained, to a new system which calculates demurrage for each car individually.
In an open letter to BNSF, Joel Hoiland, IWLA’s president and chief executive officer, wrote that the charges will “cause additional harm to warehouses that are already burdened by the unreasonable application of current demurrage rules; reduce railcar velocity by forcing inefficient operations at local rail switch yards; and force cargo traffic away from rail to trucks.”
“The new BNSF rules will compel warehouses to order the oldest cars first to minimize demurrage. In a system already stretched by capacity issues, the additional work created by the new rules will produce more congestion and fewer switched cars,” Hoiland wrote.
The ILWA urged BNSF to suspend the new demurrage rules, and instead adopt the IWLA Rail Council’s demurrage proposal, which suggests that warehouses agree to pay demurrage fees for failure to unload cars within one day of actual placement at their facilities.