Rail shippers say overpaid for surcharges - railroads claim its unfounded
January 17th, 2020
January 10, 2020 - TRA Newswire -
38 freight shippers claim that four Class 1 railroads unfairly overcharged them by adding fuel surcharges to their shipments and allegedly conspired to fix prices as far back as 2003. That's according to a lawsuit filed at U.S. District Court in Houston.
Total Petrochemicals and Refining USA is the latest company to join in the suit which is roundly being challenged on its merit by the railroads. The Houston Chronicle reported that Union Pacific said the claims are without merit would plan to vigorously defend the company in court while BNSF Railway denied the allegations and is reviewing the filings. Two other Class 1 railroads, Norfolk Southern and CSX did not comment to the newspaper.
The lawsuit alleges the railroads violated anti-trust laws through meetings, phone calls and emails to set fuel surcharge rates. Total claims the fuel surcharges were calculated as a percentage base of transportation rates and not tied to the cost of fuel, resulting in an across the board price increase. Total claims it spent about $300 million between 2003 and 2008 in transportation charges and attributed about 10% to fuel surcharges, according to the suit.
Following an appeals court ruling in August that dismissed a class action claim, the petrochemical companies started to file lawsuits across the country in federal courts. The original class-action was filed in 2008 but dismissed by a federal trial court in Washington D.C. that determined that all plaintiffs were not subject to the same level of damage.
Fuel surcharges are not new and have been imposed prior to 2003 when market conditions raised fuel costs.
38 freight shippers claim that four Class 1 railroads unfairly overcharged them by adding fuel surcharges to their shipments and allegedly conspired to fix prices as far back as 2003. That's according to a lawsuit filed at U.S. District Court in Houston.
Total Petrochemicals and Refining USA is the latest company to join in the suit which is roundly being challenged on its merit by the railroads. The Houston Chronicle reported that Union Pacific said the claims are without merit would plan to vigorously defend the company in court while BNSF Railway denied the allegations and is reviewing the filings. Two other Class 1 railroads, Norfolk Southern and CSX did not comment to the newspaper.
The lawsuit alleges the railroads violated anti-trust laws through meetings, phone calls and emails to set fuel surcharge rates. Total claims the fuel surcharges were calculated as a percentage base of transportation rates and not tied to the cost of fuel, resulting in an across the board price increase. Total claims it spent about $300 million between 2003 and 2008 in transportation charges and attributed about 10% to fuel surcharges, according to the suit.
Following an appeals court ruling in August that dismissed a class action claim, the petrochemical companies started to file lawsuits across the country in federal courts. The original class-action was filed in 2008 but dismissed by a federal trial court in Washington D.C. that determined that all plaintiffs were not subject to the same level of damage.
Fuel surcharges are not new and have been imposed prior to 2003 when market conditions raised fuel costs.