suit by a tiny shipper seeks potentially
billions of dollars in damages from five
major rail carriers over alleged price collusion
related to fuel surcharges, and seeks class
action status that would enable other shippers
to jump into the fray. But some of the details
here might cause some to wonder if this
suit was created specifically to drag in
other shippers rather than being in response
to real damages suffered by the claimant.
federal suit was brought by a small, closely
held company named Dust Pro, out of Phoenix.
The suit claims five major U.S.
railroads "moved in uniform lockstep"
to fix prices on fuel surcharges, which
began to rise rapidly in 2004 as diesel
fuel prices increased. The suit says that
as a result of the practice, railroads "restrained
competition in the market for unregulated
rail freight transportation services,"
causing shippers to be overcharged billions
in the suit are CSX; Norfolk
Southern; Union Pacific; Burlington Northern
Santa Fe; and Kansas
to being a pretty small company, the suit
is related to the Dust Pro’s distribution
of chemicals that help with soil stabilization,
which it shipped by rail. However, Dust
Pro ceased its soil stabilizer operations
in late 2005. Finding information on the
company via web searches is difficult. The
web site www.dustpro.com, which was once
active, is no longer available.
complicating things, the Surface Transportation
Board ruled in January that some rail fuel-surcharge
practices were improper, and announced new
regulations on how rail carriers can assess
fuel surcharges (See Surface
Transportation Board Finalizes Rail Surcharge
This may support charges of price fixing
in previous years. Many shippers believe
fuel surcharges are by both rail carriers
and the trucking industry and are not designed
to simply recover rising fuel costs above
contract freight rates, but to serve as
a profit center.