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DIVERSION AND RECONSIGNMENT
Diversions and reconsignments are generally intended to cover a direct-line movement; however, such is not always the case, as one carrier, in order to meet competition, will make provision in tariffs to the effect that indirect or out-of-line haul will be permitted at rates and charges applicable for direct movement from point of origin to final destination.
Freight stopped, diverted, reconsigned or reforwarded under general diversion
and/or reconsigning rules will, in addition, be subject to demurrage and track TRACK STORAGE storage charges lawfully in effect at point where stopping, diversion, reconsign
ment or reforwarding is accomplished. If diversion or reconsignment is made after arrival of car at billed destination and the car has been delivered to a connecting road, all switching charges of connecting road will be in addition.
The movement of traffic is often interrupted, and to avoid congestion and the placing of embargoes when such a situation arises, the carriers usually divert shipments to other routes; but, in such cases the shipper is not required to pay any additional charges. This practice on the part of the carriers is of value from an operating standpoint, as it enables the carriers to keep traffic moving and prevent the accrual of extra per diem charges on foreign cars.
The carriers also provide that when a car is stopped for orders for the purpose of delivery or diversion or reconsignment or reforwarding prior to the arrival at original billed destination, or if such destination is served by a terminal yard, then prior to arrival at such terminal yard, on request of consignor, consignee or owner, a charge (generally $2.70 per car) will be made for such service, and the point where the car is stopped will be considered the destination of the freight. The service of stopping will not prevent one change of destination.
Generally when the destination or route is changed and the car containing the shipment cannot, on account of ownership or other reasons, go forward to the new destination or via the new route, and it is necessary to transfer the shipment to another car, the charge for such transfer, as a rule, will be assessed against the shipper by the transportation line.
The diversion and reconsignment rules and charges are practically uniform throughout the country. For the purpose of this article, only the rules and charges applicable to shipments of general merchandise (shipments other than coal, grain, fruits and vegetables, for which special rules are published by the carriers) have been considered.
The demurrage charges, rules and regulations of the transportation lines apply to cars held by or for consignors or consignees for loading, unloading, forwarding directions, or for any other purpose.
It was in 1874 that the first demurrage was assessed by a railroad. Up to that time demurrage was unknown, except in the maritime field where it was assessed by ship owners against merchants or charterers for detaining ships in port longer than a certain stipulated time. Demurrage in the railroad field was not applied generally and indiscriminately until about 1888. Before that time, it was a common practice for a consignor or consignee to hold a car for loading or unloading for any length of time that suited his convenience. But as the country's commerce developed, the
demand of shippers for cars of all kinds increased to such an extent that the railroads were frequently unable to meet it.
The railroads, as common carriers, were obliged to furnish cars for the movement of freight of all shippers, and the holding of cars by consignors and consignees for whatever length of time that suited their convenience made it extremely difficult for them to discharge that obligation. The business of the railroads being that of transporting goods and not that of supplying storage facilities, it was an improper practice for shippers and consignees to use cars for the storage of goods. However, the practice spread to such an extent that the railroads were forced to abate it, if not stop it altogether, and demurrage was adopted as a means to that end. Demurrage, therefore, was used not so much as a source of revenue to the railroads, as for the purpose of penalizing consignors and consignees, to the end that they might become discouraged in the practice of holding cars beyond a reasonable time for loading or unloading.
The cars of the railroads must be kept in the service for which they are intended --that of moving goods from one place to another. This is required in the interests of both the public and the railroads. It would be impossible for any industry to thrive if it were without adequate facilities for the transportation of its goods to the markets of the world. Every industry sustains irretrievable losses during periods of car shortages. In times of booms in business activities the demands for cars frequently go far beyond the supply, and in peiords of depression in business, the storage tracks of the railroads are covered with idle cars representing an investment on which no returns are being made. Cars are profitable to the railroads only wben they are employed in the service of moving freight, and are of greatest value to the shipper when they are available for the transportation of his goods. It is in the interest of both the public and the railroads that cars be promptly loaded or unloaded and released for transportation service. The railroads cannot be expected to meet immediately by the purchase of new cars any unusual demand of the public. As common carriers they can be expected to keep themselves equipped to meet only the ordinary and customary demands for their services.
The practice of the railroads in assessing demurrage is of particular importance and value to those shippers who use cars regularly and extensively; because it prevents the detention of cars unnecessarily on the part of other shippers, thus keeping available for loading the greatest possible number of cars.
Straight demurrage rules provide for an allowance of a definite period, called "free time," for the loading or unloading of cars and for a definite charge by the day for all cars held beyond that period. The free time allowed for the loading or unloading of cars is usually forty-eight (48) hours, the time being computed, as a rule, from the first 7:00 a. m. after placement, Sundays and legal holidays excepted. For each of the first four (4) days that a car is held by consignor or consignee beyond the free time, demurrage is assessed at the rate of $2 per day, and for each additional day beyond four (4), $5 per day.
Under the average demurrage rules an agreement is made between the railroad and the shipper whereby the latter is allowed one credit for each car released within the first twenty-four (24) hours of free time, and assessed one debit per car per day, or fraction of a day, for each day up to four (4) days on each car held after the expiration of the first forty-eight (48) hours. At the end of each calendar month the total number of credits, if less than the total number of debits, are deducted from the debits, the remaining debits being charged for at the rate of $2 per debit. If the credits equal or exceed the debits, no charge is made for the detention of cars and no payment is made by the railroad on account of excess credits. As the transactions for each month are adjusted and closed at the end of the month, credits in excess of debits in any one month cannot be carried over to offset debits for the next month. When four debits have accrued against any one car, demurrage is assessed at the rate of $5 per day for each day beyond four days that the car is held, Sundays and legal holidays not excepted. Credits carried on cars held for loading cannot be used to offset debits accruing on cars held for unloading, nor can credits earned on cars held for unloading be used to offset debits against cars held for loading.
Reciprocal demurrage has been tried in a few states but found unsatisfactory in its results. It is an attempt to balance the delinquencies of the carrier with those of the shipper through the medium of reciprocal penalties; that is, for each day of delay beyond a specified time in placing a car the carrier should forfeit a sum equal to that assessed against the shipper for undue detention of a car. A few years ago California, Texas and several other states had reciprocal demurrage rules applying in intrastate traffic. In Texas, for example, the law provided that the shipper could make a statutory requisition for a car, accompanied by a deposit of one-fourth of the freight charges, and upon the carrier's failure to supply the car within a specified time, the carrier should pay to the shipper $25 for each day of delay beyond a specified time; likewise, the shipper had to pay $25 per day for detention of a car beyond the free time. This practice soon forced each carrier to keep all of its cars on its own rails, thus making it impossible for a shipper to procure, without transfer, the movement of a shipment from its point of origin to its final destination. Very serious efforst have been made by shippers to induce the Interstate Commerce Commission to establish some kind of reciprocal demurrage rules, but without success. The view of the Commission is that car shortages are determined by commercial conditions which are beyond the control of the carriers, and that reciprocal demurrage rules would not relieve such shortages.
Under the rules of the carriers no demurrage charges are assessed for detention of cars when the detention results from certain cases, such as weather interference, bunching of cars by carriers, demand by carrier's agent of charges which exceed the published tariff rates, errors of the carrier which prevents proper tender or delivery of cars, and delay by U. S. Customs.
The demurrage charges and rules of the transportation lines are practically uniform and are known as the National Car Demurrage Rules and Charges. They are published for nearly all lines by the American Railway Association Tariff Bureau, B. T. Jones, Agent, Chicago, Ill. The rules and charges appearing below, and on the following pages, to and including page 99, are reproduced from the present National Car Demurrage Rules and Charges; but they do not purport to be in exact accord with the rules and charges of every transportation line.
RULE 1. NotE.—The disposition at point of detention determines the purpose for which a car is held and the rule applicable thereto, except where there is specific tariff provision to the contrary.
SECTION A.-Cars of either railroad or private ownership, held for or by consignors or consignees for loading, unloading, forwarding directions or for any other purpose (including cars held for loading company material unless the loading is done by the railroad for which the material is intended and on its tracks) are subject to these demurrage rules, except as provided in Section B.
SECTION B.-The following cars are not subject to these demurrage rules:
1. Cars under load with company material for use of and consigned to the railroad in whose possession the cars are held.
2. Cars under load with live stock. This exemption does not include cars held for or by shippers for loading live stock. Live poultry will not be considered as live stock.
3. Empty cars placed for loading coal at coal mines, coal mine sidings, coal washers, or coke at coke ovens and such cars under load with coal, at such mines, mine sidings or coal washers, or with coke at coke ovens. This exemption applies only at mines, coal washers and ovens which are subject to car distribution rules in lieu of demurrage rules. (See Note 1 to Rule 2, Section B, paragraph 1.)
4. (a) Private cars on private tracks when the ownership of the car and track is the same.
NOTE 1.-For the purpose of this exemption from demurrage:
A Private Car is a car having other than railroad ownership. A lease of a car is equivalent to ownership. Private cars must have the full name of the owner or lessee painted or stenciled thereon or must be boarded with wooden, metal or card boards showing the full name of owner or lessee and, if card-boarded, the card board must also show initials and number of car and date of shipment. If name of lessee is painted, stenciled or boarded on car, then the car is exempt from demurrage for the lessee only. If name of lessee is not painted, stenciled or boarded on car, then the car is exempt from demurrage for the owner only.
A Private Track is a track outside of carrier's right of way, yard and terminals, and of which the carrier does not own either the rails, ties, roadbed or right of way; or a track or a portion of a track which is devoted to the purposes of its user, either by lease or written agreement, in which case the lease or written agreement will be considered as equivalent to ownership.
NOTE 2.—Private cars while held under constructive placement for delivery upon the tracks of their owners are subject to demurrage charges after expiration of forty-eight hours' free time. (See Rules 5 and 9.)
4. (b) Empty private cars stored on railroad or private tracks, including such cars sent by the owner to a shipper for loading, provided the cars have not been placed or tendered for loading on the orders of a shipper. (See Rule 6, Section D of tariff.)
RULE 2. SECTION A.–Forty-eight hours (two days) free time will be allowed for loading or unloading all commodities. (See Rule 2, Section B, Paragraph 4.)
"LOADING” includes the furnishing of forwarding directions on outbound cars.
(a) Surrender of bill of lading on shipments billed "to order."
(c) Furnishing of a "turn-over” order (an order for delivery to another
party) after car has been placed for delivery and no additional move
·ment of the car is made. NOTE.-If a consignee wishes his car held at any break-up yard or a hold yard before notification and placement, such car will be subject to demurrage. That is to say, the time held in the break-up yard will be included within the 48 hours free time. If he wishes to exempt his car from the imposition of demurrage, he must, either by general orders given to the carrier or by specific orders as to incoming freight, notify the carrier of the track upon which he wishes his freight placed, in which event he will have the full 48 hours' free time from the time when the placement is made upon the track designated. This "Note” will apply, except when in conflict with Rule 2, Section B, Paragraph 1.
2. When the same car is both unloaded and reloaded, each transaction will be treated as independent of the other; except that, when loading is begun before unloading is completed, the free time for loading shall not begin to run until the first 7 A. M. after unloading is completed. This will also apply to industries performing their own switching service, in which case the industry must notify the carrier date and time car was unloaded.
3. When a car held for loading or unloading is moved by railroad or private power to another point in the same yard or industry to complete loading or unloading, only forty-eight hours free time will be allowed, except that when the railroad makes a charge for such movement the time incident thereto shall not be computed against the car. (See Rule 7, Note 2.)
SECTION B.-Twenty-four hours (one day) free time will be allowed:
1. When cars are held for reconsignment, diversion or reshipment, or held in transit on order of consignor, consignee or owner.
Note 1.- This will apply to cars loaded with Coal or Coke, when moved from mines, mine sidings or coke ovens upon instructions of mine owners, operators or shippers and held at weighing stations, classification yards or elsewhere, for forwarding directions.
NOTE 2.- This will not apply to cars subject to Rule 2, Section B, Paragraph 3.
The term "diversion" or "reconsignment" will be applied as defined in the reconsignment tariffs of this railroad, except that under this rule when a car is placed for delivery at destination a "turn-over" (or order for delivery to another party) which does not involve an additional movement of the car is not a reconsignment. (See Rule 2, Section A.)
A reshipment is the making of a new contract by which under a new rate the original lading, without being unloaded, is forwarded in the same car to another destination.
2. When cars, destined for delivery to or for forwarding by a connecting line, are held under tariff regulations for surrender of bill of lading or payment of lawful freight charges.
3. When cars are held in transit and placed for inspection or grading, including reconsignment or other disposition orders. At stations where grain and hay must be inspected or graded, the consignee agreeing with the carrier in writing for file at the station, to accept the bulletining of the cars as due and adequate notice of arrival,