US petrochemical producer Georgia Gulf Tuesday said it will implement a railcar demurrage program, effective September 1, to increase its railcar turns and to manage its rail fleet costs going forward.
"We continue to see significant increases in our freight and rail fleet management costs that we have not been able offset or fully recover despite our best efforts to improve and optimize our supply chain logistics and operations," the Atlanta-based company said.
Specifics of the demurrage program will be disclosed to its customers in the coming weeks, the company said.
In early May, the Surface Transportation Board (STB) proposed a rule providing that any person receiving rail cars that detains those cars beyond specified free time may be responsible for paying demurrage charges, "so long as that person accepts cars with actual notice of the demurrage terms prior to the cars' delivery."
The demurrage compensates railroads for the time their equipment is held out of the transportation network, but also penalizes parties for detaining rail cars for too long, thereby encouraging prompt return of cars into the transportation network, the STB said in a May 5 statement.
The STB is an economic regulatory agency, affiliated with the Department of Transportation, that Congress charged with resolving railroad rate and service disputes.
"The rule proposed (by the STB) is open for public comments until June 25 and once the STB received those comments and analyze them will reply the results on July 23," a STB spokesperson said Tuesday.
