Friday, March 30, 2007

Fuel Charges: What Next?

After much heartburn from various Rail Shippers Organizations, the Surface Transportation Board (STB) made a ruling that banned "excessive" Fuel Surcharges, and seemed to force Railroads into at least modifying their use of this additional tariff. Trains Magazine has a good summary in their May 2007 Issue.

But the question remains, are the Railroads going to take this lying down or are they going to try to outsmart the ruling, and figure out ways to get around the Feds and keep charging this most-profitable add-on? Looking at first-blush reactions from three Railroads doesn't show any consistency.

CSX seems to be rewriting their policy and basing Fuel Surcharges on mileage.

Union Pacific's reaction is complicated, and will probably vary according to each shipper.

Trains Magazine says that the BNSF so far is the only property to base Fuel Surcharges on mileage and/or tonnage. I think the BNSF is providing a bit more complicated policy than that, a policy that, once again, depends on what commodity is shipped.

Time will tell if the STB Ruling is more "appearance over substance". Something needs to be in place that allows protection for both Customer and Carrier when fuel prices fluctuate wildly. Hopefully, that goal is in sight.



Fuel Surcharge Still an Ugly Situation
Fuel Surcharges Continue to Mystify


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