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Re: Ongoing cost of stranded cars
Author: S.L. Murray
Date: 01-28-2008 - 10:54
Gunner V Wrote:
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> I thought that when a line is severed or
> embargoed, car hire stops, although the cars must
> still be returned in some way for interchange back
> to the owner. Maybe I'm out of date or wrong, or
> maybe this applies only to a genuine
> railroad-to-railroad situation.
Afraid not, car hire still has to be paid. The only provisions for suspension of car hire are under Rules 7 and 8, and in those cases car hire would only be stopped if the cars were destroyed and a DV issued. In the case of the NWP cars (which are a mix of UP and TTX marks)then the cars haven't been destroyed, and so car hire must be paid.
Under the provisions of car hire Rule 1 section G UP is on the hook for the car hire. This section, quoted below, basically says that if a carrier decides to not pay car hire (and a surprising amount of small shortlines sometimes do this) or otherwise play by the rules, then the carrier which delivered the cars to the rogue carrier is responsible. The delivering carrier can embargo a line, or deduct payments, in order to get their money back, but they still have to pay the car owner for any car hire accrued on the rogue carrier.
"G. Responsibility for Cars Delivered to Non-Subscribers
1. In the event a non-subscriber does not pay car hire to an owner, the subscriber interchanging freight cars to a non-subscriber (including a common carrier by water) shall pay the car hire rates applicable under Paragraphs D. and E. while such cars are in possession of the non-subscriber and until such cars are again interchanged to a subscriber, as evidenced by the official interchange created through LCS processing."
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> I thought that when a line is severed or
> embargoed, car hire stops, although the cars must
> still be returned in some way for interchange back
> to the owner. Maybe I'm out of date or wrong, or
> maybe this applies only to a genuine
> railroad-to-railroad situation.
Afraid not, car hire still has to be paid. The only provisions for suspension of car hire are under Rules 7 and 8, and in those cases car hire would only be stopped if the cars were destroyed and a DV issued. In the case of the NWP cars (which are a mix of UP and TTX marks)then the cars haven't been destroyed, and so car hire must be paid.
Under the provisions of car hire Rule 1 section G UP is on the hook for the car hire. This section, quoted below, basically says that if a carrier decides to not pay car hire (and a surprising amount of small shortlines sometimes do this) or otherwise play by the rules, then the carrier which delivered the cars to the rogue carrier is responsible. The delivering carrier can embargo a line, or deduct payments, in order to get their money back, but they still have to pay the car owner for any car hire accrued on the rogue carrier.
"G. Responsibility for Cars Delivered to Non-Subscribers
1. In the event a non-subscriber does not pay car hire to an owner, the subscriber interchanging freight cars to a non-subscriber (including a common carrier by water) shall pay the car hire rates applicable under Paragraphs D. and E. while such cars are in possession of the non-subscriber and until such cars are again interchanged to a subscriber, as evidenced by the official interchange created through LCS processing."
