Chemical group denounces rail fuel surcharges as unfair

Chemical group denounces rail fuel surcharges as unfair    A representative of the American Chemistry Council said Thursday that unreasonable pricing practices, rooted in today’s government-protected system of railroad monopolies, have led railroads to impose unwarranted and unfair fuel surcharges on chemistry sector customers and other captive industries.
   The comments were made at a hearing of the Surface Transportation Board, which is investigating rail fuel surcharge practices.
   Analysts contracted by ACC confirmed revenue generated by the rail fuel surcharges “greatly exceeds” actual fuel costs due in large part to flaws in the methodologies used in calculating the surcharges, ACC said during the hearing. The analysts also estimate that rail fuel surcharges today have unnecessarily cost railroad customers — including the chemistry sector — roughly $1 billion in overcharges. This is a costly burden that could create negative consequences for the entire U.S. economy.
   Testifying on behalf of the nation’s leading chemistry companies, ACC’s Senior Director for Distribution Tom Schick explained that railroad fuel surcharge practices are unreasonable because of five crucial factors:
   * Fuel surcharges often are not based on actual fuel consumption.
   * The surcharges are inappropriately linked to freight rates.
   * Higher fuel costs are often covered by other means.
   * Some shippers are overcharged because others are not subject to fuel surcharges.
   * The reasonability of fuel surcharges can only be determined if there is complete data transparency.