BNSF to Institute Mileage-Based Fuel Surcharge Program

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NSF Railway Co. said Tuesday it will assess fuel surcharges on a mileage basis starting next year, and said it would be the first mileage-based fuel surcharge in the railroad industry.

Beginning Jan. 1, 2006, the surcharge will replace BNSF’s current fuel surcharge, which is assessed as a percentage of a customer’s freight transportation bill.

“In this era of tight transportation capacity, rapidly rising fuel prices and fuel-price volatility, we believe a mileage-based fuel surcharge program is the most direct and accurate method of reflecting the impact of fuel price changes on BNSF and our valued customers,” said John Lanigan, BNSF’s executive vice president and chief marketing officer.

The surcharge will apply to movements that originate and terminate on BNSF, and to the BNSF portion of Rule 11 shipments, interline movements where each carrier bill customers separately for their services. Such movements account for about 75% of BNSF’s volume, the railroad said in a statement.

The remaining 25% are joint-rate interline movements with other railroads and will continue to be covered by BNSF’s existing percentage-based fuel surcharge.

The mileage fuel surcharge also will apply to certain movements involving BNSF and one or more short lines, BNSF said.