Rail fuel surcharges come under scrutiny
By Tom Stundza -- Purchasing, 8/9/2006 9:37:00 AM
Fuel surcharges are a thorn in any buyer’s side these days, but most recently rail shippers are reporting extremely high fuel surcharges coming from rail carriers. Rail became a more popular option last year as trucking rates skyrocketed but now shippers are truly stuck between a rock and another rock. The Surface Transportation Board of the Department of Transportation recently put out a proposal to regulate the fuel surcharges coming from railroads. The STB is seeking comments on the proposal through Sept. 25. The proposal came after a May meeting where shippers expressed their concerns with rail fuel surcharges. According to news reports, George Telfer, DaimlerChrysler’s senior manager for customs and government affairs, said at the STB hearing in May, “The ability to mandate these fuel surcharges has become somewhat of a profit center for these railroads." Thomas Schick, senior distribution director for the American Chemistry Council, told the STB panel that the railroads' fuel surcharges tallied more than $900 million for members. The ACC’s membership manufactures 85% of the country's chemical products and 63% of the chemical plants owned by its members are served by only one railroad. In May, the ACC put out a statement
saying “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.” For more details and updates on this issue, check the Purchasing.com Logistics channel.
Rail fuel surcharges get reviewed
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