[Federal Register Volume 78, Number 102 (Tuesday, May 28, 2013)]
[Proposed Rules]
[Pages 31882-31883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12543]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1333

[Docket No. EP 707]


Demurrage Liability

AGENCY: Surface Transportation Board, DOT.

ACTION: Initial regulatory flexibility analysis and request for 
comments.

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SUMMARY: The Board is publishing this initial regulatory flexibility 
analysis to aid the public in commenting on the impact on small rail 
carriers, if any, of the proposed rules on demurrage liability.

DATES: Comments are due by June 27, 2013.

FOR FURTHER INFORMATION CONTACT: Amy C. Ziehm at (202) 245-0391. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at (800) 877-8339.

SUPPLEMENTARY INFORMATION: By decision served on May 7, 2012, the 
Surface Transportation Board (the Board) issued a notice of proposed 
rulemaking (NPR) regarding demurrage liability. Specifically, the Board 
announced a proposed rule providing that any person receiving rail cars 
from a rail carrier for loading or unloading who detains the cars 
beyond a specified period of time may be held liable for demurrage if 
that person has actual notice of the terms of the demurrage tariff 
providing for such liability prior to the carrier's placement of the 
rail cars. Demurrage Liability, EP 707, slip op. at 10 (STB served May 
7, 2012). The NPR did not include an initial regulatory flexibility 
analysis (IRFA) pursuant to the Regulatory Flexibility Act, but instead 
included a certification that the proposed rules would not have a 
significant economic impact on a substantial number of small entities. 
Id., slip op. at 17-18. The certification was based on the fact that 
rail carriers would be required to provide a one-time notice 
(electronic or written) to their customers,\1\ and the Board noted that 
these types of notices are generally already provided, often 
electronically. A review of the 2011 Waybill Sample reveals that small 
rail carriers, as defined by the Small Business Administration,\2\ have 
an average of 10 terminating stations, which generally equates to 10 
customers. As such, the burden imposed would be to provide 
approximately 10 notices of a carrier's demurrage tariff, either 
electronically or in writing, which is not significant. Additionally, 
to the extent that their existing tariffs conflict with the proposed 
rules, rail carriers would need to update their demurrage tariffs to 
conform to the proposed rules.
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    \1\ The Paperwork Reduction Act and Regulatory Flexibility Act 
sections of the NPR assumed that rail carriers would only need to 
provide a one-time notice. See, e.g., NPR at 21 (calculating burden 
hours by assuming that it would take ``railroads eight hours to 
provide initial notice to its customers''). Many commenters asked 
for clarification on whether rail carriers would need to provide 
notice with each delivery of rail cars, or whether a one-time notice 
would suffice. In this IRFA, we are not deciding this issue, but 
only noting that the analyses contained in the NPR were based on the 
assumption that rail carriers would only need to provide a one-time 
notice.
    \2\ The Small Business Administration's Office of Size Standards 
has established a size standard for rail transportation, pursuant to 
which a ``line-haul railroad'' is considered small if its number of 
employees is 1,500 or less, and a ``short line railroad'' is 
considered small if its number of employees is 500 or less. 13 CFR 
121.201 (industry subsector 482).
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    In response to the NPR, the American Short Line and Regional 
Railroad Association (ASLRRA) submitted comments in which it questioned 
the necessity of imposing the actual notice requirement on small 
carriers. ALSRRA summarily argued that ``small railroads . . . often 
communicate with shippers by telephone,'' that Class III carriers are 
``sometimes less electronically sophisticated,'' and that ``small 
railroads, particularly those who are acting as handling lines, may not 
even know who the receiver is.'' \3\
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    \3\ ASLRRA's Comments 3-4.
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    The Board continues to believe that its certification in the NPR is 
appropriate because the impact of the proposed rules would not be 
significant. Nevertheless, the Board has decided to publish the 
following analysis to provide further information and opportunity for 
public comment on the impact on small rail carriers, if any, of the 
rules. The Board notes that it already afforded a period of public 
comment on the proposed rules and that this solicitation of comments is 
limited to the impact on small rail carriers, if any, of the rules.

[[Page 31883]]

    In particular, we encourage ASLRRA to provide comments in response 
to this IRFA. Although we appreciate that ASLRRA submitted comments 
regarding the impact on small carriers, its comments were general in 
nature. To fully evaluate ASLRRA's comments, the Board seeks more 
specific information with which to evaluate the concerns raised by 
ASLRRA. Specifically, we seek further comment on the number of small 
carriers that would find electronic or written communication of notice 
more difficult than communication of notice by phone, and why; and 
information on small carriers that deliver rail cars but are unaware of 
the receiver's identity. Additionally, we seek comment on the number of 
customers served by small carriers. We also encourage any other 
information that is relevant to the burden, if any, the proposed rules 
would have on small rail carriers.
    Description of the reasons that action by the agency is being 
considered.
    The Board instituted this proceeding in order to reexamine its 
existing policies on demurrage liability and to promote uniformity in 
the area in light of conflicting opinions from the United States Courts 
of Appeals. In reviewing the decisions from the Courts of Appeals, the 
Board determined that it was necessary to revisit its demurrage 
precedent to consider whether the agency's policies accounted for 
current statutory provisions and commercial practices. For a more 
detailed description of the agency's historical regulation of 
demurrage, the conflicting opinions from the Courts of Appeals, and the 
Board's reasons for considering the proposed rules, see the NPR.
    Succinct statement of the objectives of, and legal basis for, the 
proposed rule.
    The objectives are to update our policies regarding responsibility 
for demurrage liability and to promote uniformity in the area by 
defining who is subject to demurrage. The legal basis for the proposed 
rule is 49 U.S.C. 721.
    Description of and, where feasible, an estimate of the number of 
small entities to which the proposed rule will apply.
    In general, the rule would apply to any rail carrier providing rail 
cars to a shipper at origin or delivering them to a receiver at end-
point or intermediate destination who wishes to charge demurrage for 
the detention of rail cars beyond the free time. See Proposed Rule 
Sec.  1333.3. The rule will apply to approximately 562 small rail 
carriers.
    Description of the projected reporting, recordkeeping, and other 
compliance requirements of the proposed rule, including an estimate of 
the classes of small entities that will be subject to the requirement 
and the type of professional skills necessary for preparation of the 
report or record.
    The proposed rules would require that rail carriers make certain 
third-party disclosures, i.e., provide persons receiving rail cars for 
loading or unloading with notice of the demurrage tariff in order to 
hold that person liable for demurrage charges. See Proposed Rule Sec.  
1333.3. The Board is seeking, pursuant to the Paperwork Reduction Act, 
approval from the Office of Management and Budget for this requirement. 
See NPR Appendix B (description of collections). To provide this 
initial notice, rail carriers would need to update their demurrage 
tariffs to conform to the proposed rules to the extent that their 
existing tariffs conflict with the proposed rules. In the NPR, the 
Board estimated approximately eight hours to provide initial notice to 
the railroads' customers. However, the Board seeks further comment on 
the actual time, or costs or expenditures, if any, of providing a one-
time notice of the demurrage tariff and updating the demurrage tariff 
to conform to the proposed rules, and the extent to which these costs 
may differ or vary for small entities.
    Identification, to the extent practicable, of all relevant federal 
rules that may duplicate, overlap, or conflict with the proposed rule.
    The Board is unaware of any duplicative, overlapping, or 
conflicting federal rules. The Board seeks comments and information 
about any such rules.
    Description of any significant alternatives to the proposed rule 
that accomplish the stated objectives of applicable statutes and that 
minimize any significant economic impact of the proposed rule on small 
entities, including alternatives considered, such as: (1) Establishment 
of differing compliance or reporting requirements or timetables that 
take into account the resources available to small entities; (2) 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) use 
of performance rather than design standards; (4) any exemption from 
coverage of the rule, or any part thereof, for such small entities.
    Under the proposed rule, rail carriers would be free to choose 
between providing notice electronically or in writing. In response to 
the NPR, many commenters suggested that notice be fulfilled by 
providing a link to the notice, rather than the complete text of the 
notice of demurrage tariff. Additionally, as noted earlier, some 
commenters also argued that a one-time notice should fulfill the notice 
requirement, as opposed to providing notice with every shipment. Both 
of these suggestions are potential alternatives to minimize the burden 
on rail carriers.
    Although the stated goal of the rulemaking is to ``promote 
uniformity in the area,'' ASLRRA has suggested establishing a different 
notice requirement for small carriers. An alternative to the proposed 
rule, as suggested by ASLRRA, would be to eliminate the notice 
requirement for small carriers that publish their demurrage tariffs on 
the carriers' Web site. Other alternatives include eliminating the 
notice requirement for small carriers altogether or permitting small 
carriers to provide notice in different forms (e.g., by telephone). 
Commenters should, if they advance any of these alternatives in their 
comments, address how such alternatives would be consistent or 
inconsistent with the goal of uniformity envisioned by the proposed 
rules.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Comments are due by June 27, 2013.
    2. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
    3. Notice of this decision will be published in the Federal 
Register.

    Decided: May 21, 2013.

    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2013-12543 Filed 5-24-13; 8:45 am]
BILLING CODE 4915-01-P