Author Topic: Lawsuits over fuel surcharges  (Read 671 times)

hobodano

  • Conductor
  • ****
  • Posts: 169
  • Retired Sou/NS
Lawsuits over fuel surcharges
« on: October 03, 2019, 10:37:01 AM »
https://www.freightwaves.com/news/shippers-hammer-railroads-with-lawsuits-over-fuel-surcharges

U.S. Class I railroads BNSF (NYSE: BRK), Union Pacific (NYSE: UNP), CSX (NYSE: CSX) and Norfolk Southern (NYSE: NSC) got slammed with lawsuits this week from shippers of various industries. The lawsuits allege that between 2003 and 2008, the railroads engaged in price fixing by assessing fuel surcharges and saying they were part of a fuel cost recovery program, thus violating the Sherman Act.
More than two dozen lawsuits may have been filed this week on the issue, according to research conducted via PACER, an online database of court filings. Plaintiffs range from power companies such as Ameren Missouri, Duke Energy Carolinas and Dominion Energy, to chemicals and energy suppliers such as Eastman Chemical and Phillips 66, to automakers such as KIA and Hyundai.

Fairly familiar with southern Indiana trackage

IndyHog

  • Superintendent
  • *****
  • Posts: 1238
Re: Lawsuits over fuel surcharges
« Reply #1 on: October 03, 2019, 11:36:38 AM »
I'm guessing fuel surcharges are a significant part of railroad's profits these days. When is the growth coming?
Meet the new boss, he's the same as the old boss......wait a minute, He's much worse

ckpcpqq

  • Chief Dispatcher
  • *****
  • Posts: 675
Re: Lawsuits over fuel surcharges
« Reply #2 on: October 03, 2019, 12:05:28 PM »
Here's an excerpt from an article in the Atlanta Business Journal.  The article also notes that grain processor giant Conagra has filed suit.  With so many large corporations filing lawsuits, this could turn out to be a very big deal.


Mercedes-Benz USA is suing the four largest U.S. railroad companies, alleging they illegally fixed prices, "pocketing billions of dollars in profits as a result."

In a complaint filed Sept. 30 in federal court in Atlanta, the Atlanta-based U.S. subsidiary of the German auto giant charges that BNSF Railway Co., CSX Transportation Inc., Norfolk Southern Corp. and Union Pacific Corp. engaged in "a conspiracy Ė under the guise of a fuel cost recovery program Ė to apply and enforce rail fuel surcharges across their customers in order to generate profits."

Mercedes-Benz USA says it used rail freight services purchased from the railroads between 2003 and 2008. "Directly undermining the pretense that the FSCs [fuel surcharges] were genuine fuel cost recovery mechanisms, as oil prices skyrocketed from approximately $40 to $150 per barrel during the Relevant Period, so did Defendantsí profits," Mercedes-Benz USA charges.
The auto giant says that as a result of the alleged conspiracy, the prices it paid for rail freight services were higher. The company contends the alleged conspiracy violated U.S. antitrust laws.


Bob Durnell

  • President
  • *****
  • Posts: 1891
Re: Lawsuits over fuel surcharges
« Reply #3 on: October 03, 2019, 12:31:47 PM »
My own personal experiences with fuel surcharges is that vendors are quick to slap them on, but VERY slow to back them up when conditions revert to normal or stabilize. My point of view is that surcharges should be only a TEMPORARY measure to recoup actual losses until the price of the product or service can be adjusted to match the new cost.  We had a vendor hitting us with delivery fuel surcharges three years after the oil market had stabilized.  Sadly, because that vendor was also a customer of ours, we couldn't really complain too much.

Rick

  • Mogul
  • *****
  • Posts: 2845
  • Conrail #1
Re: Lawsuits over fuel surcharges
« Reply #4 on: October 03, 2019, 08:54:07 PM »
Itíll be interesting to see this play out.  Airlines and cruise lines added fuel surcharges as well during this time.  I donít know if itís apples to apples. 


Sent from my iPhone using Tapatalk

IndyHog

  • Superintendent
  • *****
  • Posts: 1238
Re: Lawsuits over fuel surcharges
« Reply #5 on: October 11, 2019, 12:13:07 PM »
PITTSBURGH, Pa. ó Several US steelmakers and aluminum companies have filed a pair of lawsuits alleging the country's four largest railroad companies conspired to fix prices over a period of at least five years, according to court filings seen Wednesday by S&P Global Platts.
Meet the new boss, he's the same as the old boss......wait a minute, He's much worse

trainmaster53

  • Tycoon
  • ******
  • Posts: 7991
Re: Lawsuits over fuel surcharges
« Reply #6 on: October 11, 2019, 05:52:54 PM »
They need to go after Speedway Gas Corp For Price Fixing as well. Everytime the Price goes up, Speedway is the First to raise the Price for No Reason.

trafficcritic

  • Dispatcher
  • *****
  • Posts: 267
Re: Lawsuits over fuel surcharges
« Reply #7 on: October 17, 2019, 11:46:48 AM »
They need to go after Speedway Gas Corp For Price Fixing as well. Everytime the Price goes up, Speedway is the First to raise the Price for No Reason.

Indianapolis gas prices are on a 7-10 day cycle. If you pay attention to the prices when you know to wait until the 7th or 8th day to purchase gas.

MSchwiebert

  • Chief Dispatcher
  • *****
  • Posts: 553
Re: Lawsuits over fuel surcharges
« Reply #8 on: October 17, 2019, 01:40:51 PM »
They need to go after Speedway Gas Corp For Price Fixing as well. Everytime the Price goes up, Speedway is the First to raise the Price for No Reason.

Speedway has long been known as a "price leader" here in the Toledo area as well.  Sometimes the increase will totally stick - and the rest of the market follows, sometimes it doesn't and they'll retreat, and sometimes it'll partially stick and they'll decrease a few cents a gallon to hit the "sweet spot".  It's an interesting choice - being the first to go up on retail pricing, knowing that less will be sold - but what is sold is at a better margin, or being the last to go up retail price wise - selling more at a thinner margin, until the increase can no longer be put off, and possibly having to leapfrog the company that led the price increase in the first place. 

Webnauseum

  • Fireman
  • **
  • Posts: 82
Re: Lawsuits over fuel surcharges
« Reply #9 on: October 17, 2019, 07:41:09 PM »
I recall an article in Trains magazine back during the time period of the alleged abuse,  In particular they stated that the railroads ability to levy fuel surcharges at their own discretion, with customers virtually powerless to contend....was proof that the railroads had established "market power".  The overall gist of the article was how strong railroads had become in the decades since the Staggers act.

I guess that these lawsuits ultimately  are seeking relief from that empowerment the magazine was boasting about.