Moreover, rates are partially driven by car utilization, so there's a double whammy on customer who keeps cars too long. Yet, the fact remains that demurrage makes customers cranky for any number of reasons. And you, Mr. Short Line Manager, can do this. Add an averaging agreement and you decrease the likelihood of a charge for the odd car that's not released till day four. The net effect is that it gives the customer credit for early release.
Administration is relatively easy.
Add up the number of cars released during free time, subtract that number from the penalty days, and the result is your chargeable demurrage days. Print this out and send it with you bill and you're done. You customer will see, in black and white, how demurrage averaging really works. Remember, constructive placement costs you double. Cars parked on railroad owned track awaiting placement deny you the use of that track whether those cars are system owned or privately owned.