Freight Railroads Accused of Collusion and Manipulation.

[Devil's Advocate]

Oxbow today sued Union Pacific Railroad Company (Union Pacific) and Burlington Northern Santa Fe Railway Company (BNSF), accusing the railroads of monopolizing and price-fixing illegally to gouge customers with high rates. In the complaint...Oxbow alleges that Union Pacific and BNSF have conspired for years to avoid competition at a high cost to customers. Today's action, which cites violations of the Sherman Act by Union Pacific and BNSF, also describes a well-documented pattern to suppress competition for rail freight services...The suit also says Union Pacific and BNSF have colluded with the nation's two other major railroads, CSX Transportation Inc. (CSX) and Norfolk Southern Railway Company (Norfolk Southern). The lawsuit alleges that the four major rail shippers have conspired since 2003 to use the deceptive concept of a “fuel surcharge” to raise prices charged to their customers. The so-called “fuel surcharge” has little to do with the actual cost of fuel and is simply a mechanism to increase rail shipping prices.

Link to story...

Having spoken with folks who ship hundreds of cars worth of product across UP rails every day I'd say this lawsuit is a long time coming. Not to even mention how UP treats Amtrak on a regular basis. After the deregulation steamroller rolled by in the early 1980's America's railroads have been busy consolidating into "too big to fail" conglomerates. As a result they now have more than enough clout to ensure they'd normally never get more than a slap on the wrist and a pat on the rump when challenged over anti-competitive business practices. However, the coal industry has plenty of their own weight to throw around. Should be interesting to watch. I'm betting on an out-of-court settlement that leads to no convictions and little if any relief for average consumers caught in the middle of yet another corporate tug-of-war.

 

[Anderson]

"Fuel surcharges" are something that everyone is milking to death. Frankly, I wouldn't be opposed to some legislation limiting when you can assess a surcharge without listing it as part of normal fares/costs...it's one thing to provide for it in case of a spike (let's face it, if oil randomly jumps from $100/barrel to $150/barrel next week, I don't begrudge a surcharge against that), but when prices are steadily within a given range...tell the airlines, the cruise companies, and so forth to just price the [bleep] cost into their fares, and if they're unwilling to do that they can swallow it.