The Surface Transportation Board will consider the removal or modification of its safe-harbor provision in the board’s fuel surcharge rules, and is seeking comments from interested parties by July 14.
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.”
STB requests comments on fuel surcharge calculation
