U.S. aluminum, steel producers allege railroad companies of overcharging customers over fuel surcharge

A number of aluminium companies and steelmakers along with other suppliers recently filed separate complaints against four largest railroad companies in the United States. They alleged that the railroad companies in the United States conspired to raise prices and overcharge customers billions of money for freight services over a period of five years. They did this under the guise of fuel cost recovery program.

Among the aluminium companies, Alcoa Corp., Pittsburgh; Alumax Mill Products, Lancaster, Pennsylvania; Arconic, Pittsburgh; Northwest Alloys, Washington; Reynolds Metals Co., Richmond, Virginia; and Eastalco Aluminum and Intalco Aluminum, subsidiaries of Alcoa, filed a lawsuit Sept. 30 with the U.S. District Court for the Western District of Pennsylvania.

The companies alleged that BNSF Railway Co., CSX Transportation Inc., Norfolk Southern Railway Co. and Union Pacific Railroad have conspired to increase the complainant’s rates from 2003 to 2008.

"In 2003, the four largest United States-based Class I railroads engaged in an extraordinary series of meetings, phone calls and email communications through which they embarked on a conspiracy -- under the guise of a fuel cost recovery program -- to apply and enforce rail fuel surcharges across their customers in order to generate profits," Alcoa wrote in the lawsuit.

The railroads denied the accusation and claimed that the rail fuel surcharge was because of rising fuel costs. The complainants claimed in its filing that the surcharge was a “means to raise and fix the price of rate-unregulated rail freight transportation services.” They referred to a report by S&P Global, which showed that the railroads had collected billions of dollars of additional profits with the help of this fuel surcharge conspiracy.