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STB PROHIBITS MISLEADING RAIL FUEL SURCHARGE PRACTICES


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#1 CNJRoss

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Posted 27 January 2007 - 11:32 AM

FOR RELEASE
1/26/2007 (Friday)
No. 07-06

SURFACE TRANSPORTATION BOARD PROHIBITS MISLEADING RAIL FUEL SURCHARGE PRACTICES

The Surface Transportation Board today concluded its inquiry into railroad fuel surcharge practices by issuing a final rule declaring it an unreasonable practice for railroads to compute fuel surcharges in a manner that does not correlate with actual fuel costs for specific rail shipments. In its decision, the STB prohibits the assessment of fuel surcharges based on a percentage calculation of the base rate charged to freight railroad customers. The decision also prohibits "double-dipping"--applying to the same traffic both a fuel surcharge and a rate increase based on a cost index that includes a fuel component. Finally, the Board is proceeding with a proposal to monitor the fuel surcharge practices of the rail industry by imposing mandatory reporting requirements on all large (Class I) railroads.

In announcing today's decision, STB Chairman Charles D. Nottingham said:

"Our decision today brings common sense and fairness to the railroads' implementation of fuel surcharges. This new rule will preclude them from selectively imposing surcharges in a manner that bears little relationship to actual fuel use. It will also remove the possibility that railroads will view fuel surcharges as a profit center."

The STB first held a hearing on rail fuel surcharges in May 2006. In August 2006, the STB issued a notice of proposed rulemaking seeking comments on several proposed measures to address its concerns about fuel surcharge practices. The STB received 73 comments on the proposals.

Today's decision in Rail Fuel Surcharges, STB Ex Parte No. 661 (Sub-No. 0), is available for viewing and downloading via the STB's website at http://www.stb.dot.gov , under "E-Library," then under "Decisions & Notices," beneath the date "1/26/07." A printed copy of the decision is available for a fee by contacting ASAP Document Solutions, 9332 Annapolis Rd., Suite 103, Lanham, MD 20706, telephone (202) 306-4004, or via asapdc@verizon.net.

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#2 CNJRoss

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Posted 27 January 2007 - 11:34 AM

Associated Press business news, 1/26:


Feds Ban Excessive Railroad Fuel Fees

WASHINGTON (AP) -- Federal regulators on Friday banned excessive fuel surcharges by railroads and imposed strict rules on the fees that many companies this week credited with bolstering their quarterly earnings, though the savings were unlikely to trickle down to consumers.

In its decision, the Surface Transportation Board said the railroads must link the surcharges directly with the actual fuel costs for specific rail shipments. The ruling prohibits "double-dipping," meaning that fuel costs can't be calculated into certain price hikes if the shipments already have other fuel surcharges.

SNIP

Shares of Union Pacific slid 3 cents to $95.35 in aftermarket activity after losing $1.06 to end at $95.43 on the New York Stock Exchange. Shares of Norfolk Southern dipped 82 cents to end at $48, Burlington Northen slipped 62 cents to $77.66 and CSX lost 65 cents to end at $35.31, all on the NYSE.

Full Article Here.

#3 CNJRoss

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Posted 17 October 2017 - 08:08 AM

Supply Chain Management Review,  10/12/17:
 

Class certification denied in railroad fuel surcharge case by U.S. District Judge

 

A 2007 lawsuit that cited Class I railroads­- Burlington Northern Santa Fe Corp., CSX Corp., Norfolk Southern Corp., and Union Pacific Corp- collaborated to fix fuel surcharges was denied class certification, due to what United States District Judge Paul L. Friedman called a failure to “establish that questions of law or fact common to class members predominate over any questions affecting only individual members.”

 

 

A 2007 lawsuit that cited Class I railroads­- Burlington Northern Santa Fe Corp., CSX Corp., Norfolk Southern Corp., and Union Pacific Corp- collaborated to fix fuel surcharges was denied class certification, due to what United States District Judge Paul L. Friedman called a failure to “establish that questions of law or fact common to class members predominate over any questions affecting only individual members.”

 

The topic of shippers overpaying for fuel surcharges is far from new. In January 2007, the Surface Transportation Board (STB) issued a final ruling regarding railroad fuel surcharges, saying that it is an unreasonable practice for railroads to compute fuel surcharges in a manner that does not correlate with actual fuel costs for specific rail shipments. The ruling also declared that it will prohibit railroads from assessing fuel surcharges that are based on a percentage of the base rate charged to customers. Instead, railroad carriers now are supposed to develop a fuel surcharge computation that is more closely linked to the portion of their fuel costs that is attributable to a specific shipment along with other factors.

 

In May 2007, Phoenix-based Dust Pro Inc. and other shippers filed an antitrust suit that seeks class-action status on behalf of parties that shipped goods on various Class I railroads that allegedly fixed prices for fuel surcharges that did not relate to actual fuel costs.  .  .  .

 

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