Shippers hammer railroads with lawsuits over fuel surcharges

The filing continued, “Defendants used ‘rate-based’ fuel surcharges – i.e., surcharges that use a percentage applied to the base rate for a shipment – as a means to impose across-the-board rate increases on rail freight shipments, a result that would have been prohibitively difficult to achieve on a contract-by-contract basis. Throughout the conspiracy and despite customer pushback against Defendants’ fuel surcharges, Defendants set aside their individual, economic self-interest to undercut one another and instead staunchly maintained their fuel surcharge program, pocketing billions of dollars in profits as a result.”

CSX and NS said they would not comment on pending litigation, while BNSF said it is reviewing the filings. Attorneys for several of the plaintiffs also didn’t return a request for comment.

“These allegations are not new and we have strongly denied these accusations for well over a decade,” BNSF said.

“We believe the claims are meritless and we plan to vigorously defend ourselves in court,” UP said.

As the courts potentially grapple with the fuel surcharge issue, so too could the Surface Transportation Board (STB). In an unrelated action, the STB opted to discontinue a proceeding on fuel surcharges on August 29 because it could not reach a consensus on how to address the issue.

But a coalition of shippers’ groups asked STB to reconsider its decision and even consider a rulemaking. They contended the railroads took advantage of the program and profited greatly from it, according to a September 18 filing by the Western Coal Traffic League, the American Public Power Association, the Edison Electric Institute, the Freight Rail Customer Alliance and the National Rural Electric Cooperative Association.