ADM sues railroads over fuel surgharge
Archer Daniels Midland is suing the five big U.S. railroads, accusing them of violating antitrust laws in fixing their fuel surcharges.
Decatur-based ADM said it has paid more than $250 million in fuel surcharges since 2003. The lawsuit doesn't say the surcharges are illegal but accuses the railroads of illegally acting in concert to set them.
ADM is one of the world's largest agribusiness companies and a major rail customer, shipping ingredients like soybeans and corn and finished products such as ethanol and corn sweeteners all over the country.
The lawsuit filed Tuesday in federal court in Minneapolis names Omaha-based Union Pacific Railroad Co., Fort Worth, Texas-based BNSF Railway Co., Jacksonville, Fla.-based CSX Transportation Inc., Norfolk, Va.-based Norfolk Southern Railway Co., and Kansas City, Mo.-based Kansas City Southern Railway Co.
The lawsuit accuses the five railroads of setting fuel surcharges by working through the Association of American Railroads, which publishes the indices used by railroads to calculate rates. The association's board includes the CEOs from the five railroads, according to the lawsuit.
The lawsuit accuses Union Pacific and BNSF Railway of agreeing to tie their surcharges to the same fuel price index, and to impose changes in the surcharge on the same day. The effect is the two railroads' fuel surcharges moved in lockstep, the lawsuit alleges. While they locked their surcharges together in their main territory in the Western U.S., the lawsuit claims CSX, Norfolk Southern and Kansas City Southern did the same in the East.
Some of the railroads hedge their fuel purchases. The lawsuit said that means their actual fuel spending should vary from one railroad to the next -- but the surcharges did not.
BNSF spokesman Patrick Hiatte said "The allegations in this case do not have any merit, and we intend to vigorously defend."
CSX spokesman Garrick Francis said, "We strongly believe that our fuel surcharge practices comply, and always have complied, with all laws and regulations."
A Union Pacific spokesman said the railroad had not seen the lawsuit and didn't have any immediate comment. Representatives for the other two railroads did not immediately return phone messages.