US rail panel finds for DuPont in CSX rate case

30 June 2008 22:22  [Source: ICIS news]

WASHINGTON (ICIS news)--CSX Railroad charged unreasonably high freight rates to DuPont Company on six different routes and must reduce those fees and pay the chemical giant up to $3m (€1.9m) in reparations, federal rail regulators said on Monday.


The US Surface Transportation Board (STB) said that DuPont is entitled lower rates of up to 40% and reparations of up to $1m per claim or a total of up to $3m for the three cases.


The board said it reached “a unanimous decision that CSX was charging unreasonably high rail rates” for DuPont’s rail shipments along six routes in the US eastern seaboard and on routes to the US Midwest and south to Mississippi.


The ruling mandates reduced rates for DuPont along the challenged routes. “The reductions vary by route, but range from approximately 5% to 40% of the challenged rates,” the board said.


The decision in favour of DuPont brings resolution to one of the earliest rate complaint cases filed under the board’s new dispute resolution process in which a shipper need pay only $150 to file a complaint.


The Surface Transportation Board adopted the speedier and lower-cost dispute resolution process in 2007 amid widespread complaints by chemical companies and other high volume shippers that the board’s earlier process was prohibitively expensive, lengthy and almost invariably favoured rail carriers.


The US chemicals industry has long alleged that railroads charge unreasonable rates, especially to so-called captive shippers - those firms served by only one rail line - and that the board has largely been unresponsive to shippers’ complaints.


“Today’s unanimous decisions demonstrate the board’s dedication to resolving disputes between railroads and their customers in an accessible, affordable and expeditious manner,” the board said.


“Freight rail customers can rest assured that the board will take effective action to strike down unreasonably high rail rates,” the agency said.


DuPont spokesman Richard Straitman said that "We are pleased with the decisions in DuPont's favour announced today by the Surface Transportation Board.  However, it will take some time for us to to read and analyse them fully."


A spokesman for CSX Railroad said the company “favours rate negotiations with customers rather than litigation over rates”.


CSX spokesman Garrick Francis also noted that the rail board’s new dispute resolution process has been challenged in federal court by rail carriers.


($1 = €0.63)


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By: Joe Kamalick
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