Another lawsuit around price fixing

Written by David C. Lester, Managing Editor
railroad tracks
Rail traffic continues to slide

RT&S has posted several reports on the collusion around fuel surcharges on the part of BNSF, Norfolk Southern, CSX and Union Pacific alleged by several shippers in lawsuits filed during the past two months (for links to the previous reports, see the section below). The Kansas City Business Journal reports that on Feb. 1, another lawsuit was filed by the Lansing Trade Group, a grain supplier based in the Kansas City suburb of Overland Park.

According to the Kansas City Business Journal report, between 1985 and 2004, Lansing says that its railroad transportation rates went down each year, except for one. Then, according to the allegation, the four railroads named in the suit colluded on fuel surcharge amounts, which Lansing says is a violation of the Sherman Antitrust Act. The report also says Lansing points out that private rail freight contracts generally contain language that addresses various rail costs, and fuel is one of them. Therefore, the lawsuit says, the railroads had other opportunities to recover fuel expense, and that the fuel surcharges were, effectively, “double dipping.”

The Lansing suit also says that “An independent 2007 study commissioned by the American Chemistry Council and Consumers United for Rail Equity (CURE) similarly found that the difference between the Defendants’ (rail fuel surcharge) revenue and Defendants’ publicly reported actual fuel costs during the period from 2003 through the first quarter of 2007 came to over $6 billion.”

Union Pacific says that these allegations are bogus, and CSX said its “fuel surcharge practices were arrived at and applied lawfully.”

RT&S News will continue to follow this story and file additional reports as events warrant.

Previous RT&S reports on this issue:

Shippers say Class 1 railroad group raked in billions of dollars with unfair fuel surcharges

Toyota says U.S. railroads engaged in price fixing

Railroads accused of price fixing ask for lawsuits to be moved to one court

For the latest railroad news, please visit rtands.com.

Categories: Class 1, Freight, Railroad News, Regulatory
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