January 31, 2007 8:45 AM, EST

STB Ruling Hits Rail Fuel-Surcharge Practices

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The Surface Transportation Board ruled that freight railroads not calculate their fuel surcharges as a percentage of their base rates.Shippers told the STB at a hearing last May that because railroads base their charges differently by customer, the result had been that railroads were collecting more from captive shippers than the rail lines were paying in increased fuel costs.The ruling also prohibits railroads from what the STB called “double-dipping” — applying to the same traffic both a fuel surcharge and a rate increase based on a cost index that includes a fuel component.The STB said it would monitor the fuel-surcharge practices by imposing mandatory reporting requirements on large railroads.Friday's decision “brings common sense and fairness to railroads’ implementation of fuel surcharges,” STB Chairman Charles Nottingham said in a statement.The rule will prevent railroads from “selectively imposing surcharges in a manner that bears little relationship to actual fuel use,” and will “remove the possibility that railroads will view fuel surcharges as a profit center,” he said.