STB Announces Public Hearing on Rail Fuel Surcharges

Transportation Update

Date: March 01, 2006

Overview

In response to complaints by shippers that fuel surcharges applied to railroad traffic have become hidden rate increases that do not relate directly to the railroads’ actual increase in fuel costs for handling the traffic, the Surface Transportation Board (STB) has announced that it will hold a public hearing on rail fuel surcharges at 9:00 a.m. on Thursday, May 11, 2006 in Washington, DC. Any person wishing to speak at the hearing must notify the STB by April 20, 2006 and submit written testimony by April 27, 2006. Interested persons who do not wish to participate in the hearing still may submit written comments.

The hearing will provide a forum for shippers to address directly the wide-spread concern that railroads may be calculating fuel surcharges on a basis unrelated to actual fuel consumption (e.g. a percent of revenue), and whether this may be an unreasonable practice that violates the Interstate Commerce Act.

The STB has also asked railroads to present testimony on how they set fuel surcharges, and whether their fuel surcharges fairly reflect the increasing fuel costs of the traffic movements to which they are applied. In addition, the STB has asked both shippers and railroads to comment on whether and how the current cost and revenue information that the STB collects from railroads should be adjusted to provide shippers with better information on a railroad’s fuel costs and revenues collected through fuel surcharges. Participants, however, are permitted to comment on any aspects of fuel surcharges that they believe the STB should consider.

Disclosure

This update is an overview of some of the recent developments in the area of domestic and international transportation. It is not a comprehensive account of all of the changes that have taken place, and it is not intended as specific legal advice. We would be pleased to respond to any questions or comments that you may have.

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