North American railway CSX has sent customer notices regarding new fees effective January 1, 2018. The fees will apply to freight shipments to Mexico that are not loaded or discharged by agreed deadlines, or shipments that are unsafely loaded or overweight.
The fee changes are intended to encourage customers to better conform to CSX's schedules to minimize service delays and costly disruptions, according to CSX Chief Executive Hunter Harrison. Independent rail analyst Anthony Hatch said Harrison was using the fees as a "behavior-changing strategy" to make shippers conform to schedules, rather than to boost profits.
Among CSX's changes, demurrage fees for cars carrying flammable materials will rise to $250 per day from $175, and to $150 a day from $105 for non-hazmat cars. Refrigerated cars will be charged $250 per day, up from $200. Charges for overloaded railcars will rise to $1,000 each from $750, and $1,000 per unsafely loaded railcar, up from $750. The carrier will also no longer allow customers to use other railroads to move freight in certain locations if CSX's system cannot handle their cars, a process called reciprocal switching. The change may force these customers to ship freight by truck, which is costlier than rail. Also, customers will be charged $300 per rail car for cancellations. This is especially important for metal buyers and sellers since cancellation strategies are part of the monthly scrap buy-cycle, especially when scrap prices are expected to decline in the upcoming month.
For railcars crossing the US-Mexico border, CSX said it may charge a new fee of $200 per railcar for incomplete or erroneous customs documentation or data, and $25 per railcar for paperwork and processing.