Generally speaking, the 1980 Congressional deregulation of railroads hasn’t been much of a benefit to those outside the railroad industry. In an effort to assess competition in the freight segment of that industry, the Surface Transportation Board has awarded a $ 1 million contract to a consulting firm. The study was prompted by a Government Accountability Office (GAO) report that expressed concerns on the matter and is expected to be completed by next fall.
Among the concerns of the GAO is a study commissioned by the American Chemistry Council and other trade groups alleging that five major freight rail companies overcharged customers by more than $ 6.5 billion under the guise of fuel charges. The Council released an economic analysis last week indicating that the railroads’ fuel surcharges between 2005 and the first quarter of 2007 were more than double what some customers expected.
“This is the greatest train robbery of the 21st century,” said Jack Gerard, president and chief executive of the American Chemistry Council, which represents about 90 percent of the nation’s chemical manufacturers.
Federal regulators in January banned excessive fuel surcharges and the Surface Transportation Board has ruled that railroads must link surcharges directly with the actual fuel charges for specific rail shipments, thereby prohibiting “double-dipping”.
An antitrust law suit seeking class-action status on behalf of parties that shipped goods on one or more of the five railroads since 2003 has been filed in the U.S. District Court of New Jersey. The suit seeks monetary damages from the railroads which allegedly “double-dipped” by affixing prices for the fuel surcharges without any relationship to actual fuel costs.
Spokesmen for the railroads have stated that the industry has been exempt from some laws since it was deregulated and have indicated that the suit will be contested. The Surface Transportation Board, they point out, has no authority to enforce refunds or seek penalties, and railroad customers currently lack any regulatory means to attempt to recoup the $ 6.5 billion.
Privileged characters, positioned to acquire power and wealth, all too often become arrogant. It’s a human frailty. In this case, for example, those five railroads have been caught with their hands in the cookie jar, and in spite of pronouncements by government agencies against unauthorized fuel surcharges, these railroads are carrying on as though they have a license to steal. And maybe they have.
No legal recourse in this “greatest train robbery”? How different it is with the trucking industry. Delivering one container at a time, as opposed to lengthy trainloads of many hundreds, keeps all transactions open and above board. Accountability leads to respectability.
Like the kind of respectability the railroads possessed … prior to 1980 deregulation.