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News Release
BNSF Fuel Surcharge Program Does Not Fully Recover Fuel Cost Above Threshold Price, Hund Tells STB
FORT WORTH, Texas, May 11, 2006:
BNSF Railway Company's fuel surcharge program has not resulted in BNSF’s fully recovering fuel cost above the threshold price at which the surcharge takes effect, Tom Hund, Burlington Northern Santa Fe Corporation’s executive vice president and chief financial officer, told a Surface Transportation Board hearing on fuel surcharges today, May 11.
In his testimony, Hund also made these points:
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BNSF’s fuel surcharge program is in response to the high cost of fuel and fuel price volatility.
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Fuel surcharges are common in other types of industries such as trucking, steamship lines, utilities and barge services.
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The threshold price at which BNSF assesses fuel surcharges is based on the historical average cost of highway diesel fuel, which has a high correlation to BNSF’s price of diesel fuel.
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BNSF’s mileage-based fuel surcharge program, which took effect Jan. 1, 2006, for Coal and Agricultural Products customers, is the most reasonable approach and better aligns the surcharge with fuel consumption based on weight, destination and fuel intensity.
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BNSF expects to convert Consumer Products and Industrial Products customers to a mileage-based fuel surcharge over time.
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A subsidiary of Burlington Northern Santa Fe Corporation (NYSE:BNI), BNSF Railway operates one of the largest railroad networks in North America, with about 32,000 route miles in 28 states and two Canadian provinces. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, transports the components of many of the products we depend on daily, and hauls enough low-sulphur coal to generate about ten percent of the electricity produced in the United States. BNSF Railway is an industry leader in Web-enabling a variety of customer transactions at www.bnsf.com.
BNSF Headquarters
BNSF Railway Company
2650 Lou Menk Dr. 2nd Floor
P.O. Box 961057
Fort Worth, TX 76161-0057
Phone: (817) 352-1000
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