On behalf of chemical manufacturers, the American Chemistry Council (ACC) commissioned a study that was presented to the Surface Transportation Board in April of 2006. A portion of the report is available from this link. The ACC recently had the report updated in order to bring their data analysis through the first quarter of 2007. A press release on the report was released by the Consumers United for Rail Equity (CURE) on September 13th. A summary of the report is on the CURE website.
The research focuses on the fuel surcharge processes of five major, U.S. Class I railroads between 2003 and Q1 2007. The researchers compared the fuel surcharge revenues collected by BNSF, CSXT, Kansas City Southern, Norfolk Southern, and Union Pacific railroads to total year-over-year changes in fuel costs. They concluded that, despite dramatic increases in the price of fuel, the railroads abused the cost recovery system by collecting $6.5 billion in excess of their own increased costs.
Union Pacific and BNSF were quick to defend their programs and attack the study. A press release from Union Pacific argues that over the time period of the ACC study the UP had a fuel expense recovery shortfall of $1.013 billion and they stated "this particular project sets new standards for data manipulation and selective use of the facts."
In January of 2007 the STB ordered the railroads to change the way they assess fuel surcharges by 4/27/07. They did not require any refunds or quantify the value of overcharges. The ACC report may strengthen a class action lawsuit by shippers.
CURE and the ACC support the Railroad Competition and Service Improvement Act of 2007 (H.R. 2125/S. 953) and Railroad Antitrust Enforcement Act of 2007 (H.R. 1650/S. 772), which propose to remove railroads’ antitrust exemptions, and amend title 49 of the U.S. code to “ensure” rail industry competition and provide shippers a “reasonable process” for rate challenges and service disputes.
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