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Decision Ties Rail Fuel Surcharges Closer to Actual Changes in Fuel Costs

Class 1 railroads would be required to submit a monthly report on total fuel costs, fuel consumption and total fuel surcharge revenues.

The Surface Transportation Board released a decision recently to bring more control to the methods that railroads use to recover fuel costs.

The proposed changes explained in the STB decision would tie fuel surcharges closer to actual changes in fuel costs. It would also prohibit railroads from "double-dipping" by charging for the same increases in fuel costs on the same shipment through the rate escalator which is based on a cost adjustment index, and the fuel charge. The decision would also require railroads to use a single, uniform index for measuring fuel cost increases. In addition, Class 1 railroads would be required to submit a monthly report on total fuel costs, fuel consumption and total fuel surcharge revenues.

This decision comes as a result of a public hearing held on May 11 of this year, which allowed shippers to voice their concerns about the methods that the railroads were using to recoup their increases in fuel costs.

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