Contact: Scott Jensen (202) 249-6511
WASHINGTON (April 29, 2013) – The American Chemistry Council issued the following statement regarding the antitrust case brought by rail freight shippers against the four major U.S. railroads—Union Pacific, BNSF, Norfolk Southern and CSX—that is now under review by the United States Court of Appeals for the District of Columbia:
“Railroad mergers have led to far less freight rail competition, leaving more than 75 percent of all freight rail stations captive to a single major railroad. This extraordinary market power has enabled railroads to charge shippers higher rates and extra fees, including fuel surcharges. The lack of competitive market forces has left shippers facing skyrocketing rail freight rates and fuel surcharges, among other rate-related costs.
“The litigation before the U.S. Court of Appeals concerns fuel surcharges imposed by the major U.S. railroads from 2003 to 2008. It is a very important business dispute that broadly affects commercial interests across the economy and warrants a decision based on the merits. Members of the American Chemistry Council and other companies from across the nation that ship products by rail have presented clear evidence of fuel surcharge price fixing by the railroad defendants. It is alleged that this practice caused members of the Council and other shippers to pay excessive charges for rail freight shipments.
“In 2006, ACC sponsored a study showing that the fuel surcharges imposed by the railroads exceeded by $6.4 billion the actual fuel costs that the surcharges were purportedly meant to recover. New research shows that the problems with fuel surcharges and rates persist. In a survey released earlier this year, most chemical shippers report paying fuel surcharges. Such charges are one factor driving up freight rail rates. An analysis of rail freight rates (including surcharges) found that the premium paid by chemical shippers for high rates soared to $3.9 billion in 2010—an increase of over 75 percent from 2005. Ultimately, higher freight rail costs are impacting the broader economy by impeding chemical manufacturing jobs and investment in United States chemical production.
“The problem with soaring freight rail rates and fuel surcharges is widespread, substantial and well-documented. The class action lawsuit on fuel surcharges is a significant case involving both big and small businesses, and we believe the case deserves to proceed to trial.”
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