NIT League pushes for more uniform fuel surcharges

NIT League pushes for more uniform fuel surcharges    Railroad shippers, concerned that rail carriers may be over-recovering increased fuel costs through surcharges, want railroads to develop a more consistent way of calculating the fee rather than basing it on a percentage of the freight rate, said John Ficker, president of the National Industrial Transportation League.
   Most railroads base fuel surcharges on the freight transportation bill in contrast to motor carrier fuel surcharges, which are based on the number of miles a shipment travels.
   Ficker said the NIT League is individually asking railroads to change how they determine the fuel surcharge so that it is more equitable for shippers.
   'The methodology that has been used to now has made some shippers pay more than others,' Ficker said during a panel discussion for investors at the Bear Stearns transportation conference in New York.
   Ficker said the NIT League examined one case in which the fuel surcharge for four different commodities with the same weight differed by 141 percent because it was based on different freight rates.
   The method for calculating fuel surcharges has become more of an issue as the price of diesel fuel used to power locomotives has skyrocketed in recent months and surcharges are on the order of 12 to 14 percent of the freight bill. Surcharges based on the freight bill are easier to calculate, but Ficker encouraged railroads to find an alternative way to spread the cost of the fuel bill among customers so the fee more accurately tracks actual fuel cost to move a particular railcar.
   The Burlington Northern Santa Fe Railway Co. recently said it would assess fuel surcharges based on mileage beginning Jan. 1. The new policy will cover about 75 percent of BNSF's volume, excluding most interline agreements with other carriers because of billing differences between railroads. BNSF will be the first railroad to institute a mileage-based surcharge.
   'In this era of tight transportation capacity, rapidly rising fuel prices and fuel-price volatility, we believe a mileage-based fuel surcharge program is the most direct and accurate method of reflecting the impact of fuel price changes on BNSF and our valued customers,' John Lanigan, executive vice president and chief marketing officer, said in a March 29 statement.
   BNSF said the change will require significant modifications to its computer systems and those of customers wishing to verify mileage-based surcharges.