Railroads, Customers at Odds Over Soaring Fuel Surcharges

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ailroads are at odds with some customers over fuel surcharges that have been rising faster than diesel price increases, the Wall Street Journal reported Tuesday.

One paper company shipper said the fuel surcharge exceeded diesel price increases by 40%, the Journal said.

Railroads, including Union Pacific Corp. and CSX Corp., deny the increases are a profit source, the paper reported.

With diesel prices rising rapidly, many industries are seeking savings from their supply chains, raising tension between shippers and carriers, the Journal said.

The two largest rail carriers by revenue, UP and Burlington Northern Santa Fe Corp., collected a combined $2.12 billion in fuel surcharges last year, compared with $680 million in 2004, the Journal reported, citing securities fillings.

The surcharges accounted for 8% of 2005 revenue, compared with 2.9% a year earlier, while fuel expenses at the two rail lines rose 44%, to $4.35 billion, the paper said.