“We are certain the proposed tariffs are fair, balanced, and reciprocal in nature,” Kenny Rocker, UP’s executive vice president of marketing and sales, wrote in a letter to federal regulators this week.
The changes, which are scheduled to take effect on Jan. 1, are designed to improve the utilization of locomotives, cars, and crews.
Last week, Surface Transportation Board Chairman Ann Begeman raised concerns about the so-called accessorial charges UP announced earlier this month. The issue: UP’s new tariffs seem to be a one-way street.
“While I understand the importance of improving asset utilization across your network, I am concerned that, based upon your description, UP’s tariff revisions lack appropriate reciprocity,” Begeman wrote.
If a customer’s actions prevent UP from delivering or picking up a car, for example, UP will assess a charge. Begeman wrote that she was concerned that UP did not address how it would handle situations where the railroad failed to deliver or pick up a car as promised.
“It would seem appropriate for UP to offer the customer some type of credit or accommodation in return,” Begeman wrote. “After all, UP is expecting many customers to modify their own operations, at their time and expense, to accommodate UP’s new operating plan.”
Rocker replied that UP’s own service failures would result in a credit being issued to a customer.
UP is discussing the changes with customers to ensure that they know what to expect.
“Our goal is to provide an excellent customer experience to all of our customers, which requires network fluidity that cannot be achieved if rail cars, locomotives, crews and other assets are not fully utilized,” Rocker wrote. “For example, accumulating excess customer inventory in our yards creates congestion and negatively impacts our ability to serve customers.”
Most customers have been willing to work with UP to improve supply chain efficiency, Rocker wrote.
Accessorial charges are applied to only 7 percent of UP’s customers “who are making the supply chain less efficient, more costly, and less reliable for everyone,” Rocker wrote.
Earlier this month, UP notified customers of several changes to accessorial charges, which are part of its shift to an operating plan based on the principles of Precision Scheduled Railroading.
Unit train customers will be required to provide UP with a 30-day rolling forecast and a 72-hour pre-release notification, and will face penalties if the train release date or destination is changed or if the unit train is canceled less than 48 hours prior to the scheduled release date.
Unit train customers also will have 24 hours to load or unload a unit train for free. After 24 hours, UP will impose a $200 hourly fee for each locomotive on the train. UP will impose hourly fees for unit trains that are halted en route at customer request.
UP will raise its daily fee, to $140 from $100, to store cars in its yards.
Did you all miss the part where the UP said a credit would be issued to the customer if the railroad was at fault?
This sounds like detention that truckers charge. And more recently have been a lot more aggressive about collecting.
“Did you all miss the part where the UP said a credit would be issued to the customer if the railroad was at fault?”
So? That doesn’t really tell me anything. First off, what is UP’s definition of a service failure? Late train? Acts of God only, What? Second, will the credit mirror what the UP will penalize the shipper for if they mess up? Will it be a 100.00 Amazon gift card? What?
Its a one way street . The U.P. way only . Not very customer friendly !!!!!!!!!!!!!!!!!
ups & fedex, usps do the same , but its ok if they don’t deliver as promised, its only “fair”, In my opinion, UP’s late on this.
So, if UP doesn’t deliver the empty or the load in time…….Can the shipper charge UP penalties? Sounds only fair.