In a 2007 ruling, the board said it would not allow rate-based fuel surcharges, and established instead the safe-harbor provision, an index, based on federal data, that would measure changes in fuel surcharges that would allow carriers to fairly implement surcharges.
A carrier’s surcharge seeks to recover “incremental fuel costs,” the STB has ruled, but in a challenge to the surcharge calculation, Cargill singled out that BNSF could not appropriately measure those costs.
“Cargill argued that BNSF’s mileage-based fuel surcharge program constituted an unreasonable practice, asserting that it extracted substantial profits on the traffic to which it applied,” according to the STB. “Cargill sought to show that BNSF’s fuel surcharge revenues exceeded its incremental fuel costs by comparing BNSF’s fuel surcharge revenue to its internal fuel costs.”
After rejecting Cargill’s argument, the board decided to look further. When it looked into Cargill’s claim using the index, it found that BNSF’s fuel costs “narrowly exceeded” what it charged in surcharges, but using the carrier’s internal fuel costs instead of the index as a measure, the STB found that its surcharges exceeded its actual costs by $181 million.
“The board found no evidence to suggest that BNSF had intentionally taken advantage of this aspect of the safe harbor,” it said. “Nevertheless, because of the possibility of future abuse, the board stated that it would give shippers, rail carriers, and other interested persons the opportunity to file comments on the issue.”
Brokerage Compliance Symposium
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
F3 Awards Dinner
The night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
F3: Future of Freight Festival
Industry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowThe night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowIndustry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now