NCGA Supports Reasonable and Transparent Approach on Rail Fuel Surcharges (9-26-06)

National Corn Growers Association (NCGA) President Gerald Tumbleson advocated fuel surcharges by railroads should be comparable with actual added fuel costs caused by increased fuel prices in comments to the Surface Transportation Board (STB) this week.

NCGA submitted the comments in response to the proposals before the STB regarding fuel surcharge calculation and application by railroads. NCGA noted railroads need to assess fuel surcharges accurately and fairly among all users of the rail system.
 
“An important part of corn growers, agriculture and the ethanol industry’s success hinges on reliable, cost-effective and efficient transportation – whether by barge, truck or rail,” said Tumbleson. “Agriculture is impacted negatively by the increasing fuel surcharges. Higher transportation costs result in lower grain prices and reduced producer income.”
 
The STB recently ruled applying surcharges based on rail rates constitutes an “unreasonable practice.” Proposed changes would require fuel surcharges to be reasonably related to additional fuel costs, avoiding situations where fuel surcharges become a profit center or a means of hiding increases in tariff rates.
 
Tumbleson’s comments also noted the proposed monthly reporting by each Class I railroad will ensure transparency in the process. The reporting will indicate the railroads’ total fuel costs, fuel consumption and fuel surcharge revenues, as well as how much of the railroads’ total fuel surcharge revenues were shared with their shortline connections.
 
“Corn growers are producing another record corn crop, increasing the shipping of ethanol and its coproduct – dried distillers grains,” Tumbleson said. “Yet, rising transportation costs have impacted our ability to receive farm inputs, meet our customers’ demand for timely delivery of products and successfully compete with foreign producers.”
 
While corn growers depend on a strong and financially viable railroad system, Tumbleson noted the availability of rail transportation at a fair price is also critically important.
 
To read the comments in their entirety, please click here.