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Suit accuses railroads of price fixing

From Reuters

Five U.S. railroads were accused in a federal lawsuit Monday of conspiring to fix prices on rail fuel surcharges to customers on freight shipments.

The lawsuit names CSX Corp., Norfolk Southern Corp., Burlington Northern Santa Fe Corp., Union Pacific Corp. and Kansas City Southern as defendants.

The railroads “moved in uniform lock step” to fix the fuel surcharge prices, which bore no direct link to actual fuel cost increases, the lawsuit filed in U.S. District Court in Newark, N.J., contends.

“In a competitive environment, free of collusion, carriers with lower fuel costs would impose a lower surcharge to obtain a competitive advantage,” the complaint filed by Dust Pro Inc. said.

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Dust Pro, a Phoenix-based maker of soil stabilizers, said it overpaid for rail transport because of the alleged conspiracy.

U.S. rail shippers have been angry over fuel surcharges levied by railroads to move their goods. In January, the Surface Transportation Board, a U.S. government regulator, said railroads must change the way they levy fuel surcharges.

The regulatory board’s decision addressed rate-regulated rail freight traffic only. The lawsuit focuses on unregulated rail shipments, in which rates are set by private contract or in other ways that are exempt from rate regulation under federal law. At least 80% of all rail shipments are exempt from rate regulation, the lawsuit said.

CSX spokesman Garrick Francis said that the company had not been formally served with the lawsuit, but that it believed its fuel surcharge practices “comply with all applicable laws and regulations.”

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Representatives from Norfolk Southern and Union Pacific declined to comment. Burlington Northern and Kansas City Southern could not immediately be reached.


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