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Frequently Asked Questions
What changes had been scheduled to take effect in January and February 2009?BNSF had announced August 5, 2008, that it planned to extend its mileage-based fuel surcharge program to carload (Agricultural Products, Coal, Industrial Products and Automotive) customers who do not currently pay a mileage-based fuel surcharge beginning Jan. 15, 2009, and to Intermodal customers beginning Feb. 18, 2009. BNSF also had planned to increase the strike price -- the Highway Diesel Fuel (HDF) price at which BNSF assesses a fuel surcharge -- on carload shipments from $1.25 per gallon to $2.50 per gallon, and to adjust pricing for carload shipments subject to a mileage-based fuel surcharge to reflect the new strike price. Will BNSF leave the Carload strike price at $1.25 per gallon of Highway Diesel Fuel (HDF)?Yes. The strike price will not be changed at this time. Will BNSF make the changes at some time in the future?We will continue to observe the market and will make program changes as necessary. How much notice will you provide before you make the changes?Although only 20 days' notice is legally required on regulated commodities, we will announce the effective date of the changes far enough in advance to give customers ample time to adjust their systems and prepare for the changes. Does the postponement of the fuel surcharge changes have any affect on rates customers will pay?No. Rates may change to reflect current market conditions. What are your goals for the program?BNSF has strived to create a fuel surcharge program that, within the constraints of simplicity and auditability, is fair across our overall customer base, and uses appropriate mileage sources and a manageable set of fuel intensity tables to recognize differences in the fuel intensity of different groups of customers. What do you hope the program will achieve?BNSF hopes that our customers will embrace this mileage-based fuel surcharge program as a fair mechanism to allow BNSF to recover the incremental cost of fuel used to transport their goods. What does Mileage-Based Fuel Surcharge mean to me?While the mileage-based fuel surcharge program will affect different customers in different ways, the program will result in two principal impacts. First, there may be a change in your fuel surcharge assessment, and your bills may change as a result. Second, in order to implement the mileage-based fuel surcharge, those customers with freight bill auditing software may need to modify their systems. Questions may be referred to your BNSF Sales/Marketing representative. How will you handle local vs. interline shipments?BNSF Local and Rule 11 movements are subject to the mileage-based fuel surcharge. A Rule 11 move is one in which each carrier's portion of a joint move is billed by that carrier. For mileage-based fuel surcharge, see the carload BNSF 6003 Rail Miles Inquiry tool, the Coal Unit Train and Trainload Mileage Table. BNSF Interline movements will also be subject to the fuel surcharge. On Interline movements with mileage-based fuel surcharge, the ALK miles will apply. (see secured bnsf.com). How will mileage-based fuel surcharge appear on the freight bill?The look of mileage-based fuel surcharge billing is similar to the percentage-based method. Fuel surcharge amounts will be included in most customer freight bills. Freight bills will show applicable miles used to calculate the fuel surcharge. Who's my single point of contact?Your single point of contact is your BNSF Sales/Marketing representative. Will there be different mileage calculations for each O-D pair?Yes, each O-D pair will have a specific mileage associated with it, unless otherwise stated on the mileage table. The mileage charged our customers are the specific miles between the O-D pairs, since mileage is closely associated with fuel use. How will fuel surcharge (mileage) be calculated for rates that are not from one origin to one destination -- I.E. state-to-state rates and group-to-group rates?The mileage-based fuel surcharge will be calculated based on actual origin and destination as listed on the waybill, unless otherwise stated on the mileage table. Can BNSF supply a list (paper/electronic) of just the BNSF O-D pairs?We have web based tools available so customers can look up mileage between O-D pairs. Rail miles on BNSF Local and Rule 11 movements are available through the BNSF 6003 Rail Miles Inquiry tool or the Coal Unit Train and Trainload Mileage Table. Rail miles on BNSF Joint Interline movements are available through the ALK Rail Miles application on a secured area of the BNSF Web site. Customers can register for secured access at https://www.bnsf.com/bnsf.sph/myBNSF. Will customers have input as to selecting the current form of fuel surcharge or the mileage fuel surcharge or will all be on the same basis?In order to apply the fuel surcharge program fairly and equitably to all customers, individual customers will not be able to choose the timing or to choose between percentage-based and mileage-based surcharges. I need to know the fuel factor and the miles before I receive a bill. Where do I find this information?The carload fuel surcharge for a given month will be determined on or near the first of the prior month based on the average On-Highway Retail Diesel Fuel (HDF) price published by the U.S. Department of Energy for the second prior month. Rail miles on BNSF Local and Rule 11 movements are available through the BNSF 6003 Rail Miles Inquiry tool or the Coal Unit Train and Trainload Mileage Table. Rail miles on BNSF Joint Interline movements are available through the ALK Rail Miles application on a secured area of the BNSF Web site. Customers can register for secured access at https://www.bnsf.com/bnsf.sph/myBNSF. Trains are often rerouted due to various reasons adding significant additional miles. Will mileage for fuel surcharge purposes reflect this?No. Mileage-based fuel surcharge will be based on specific rail mileage between origin and destination points. I have a mix of BNSF single line and BNSF joint line traffic. Will it be necessary for me to maintain two different accounting systems to accrue and pay two different BNSF fuel surcharges?Possibly. Rail miles on BNSF Local and Rule 11 movements will be those available through the BNSF 6003 Rail Miles Inquiry tool or the Coal Unit Train and Trainload Mileage Table. On interline moves BNSF will use the PC*Miler Rail from ALK Technologies. If the fuel price goes down in the future, is the customer still responsible for paying a fuel surcharge?Yes, according to the mileage-based fuel surcharge tables, as long as the HDF price remains above the strike price (price at which fuel surcharge will be assessed). Why are there multiple mileage-based fuel surcharge tables?The fuel intensity that is used to build the tables reflects our best estimates of the average fuel usage of the train type in each table. We believe that these tables reflect the most accurate approach that is also compatible with the real-world business need for implementability, simplicity and customer auditability. In a business segment such as whole grains where BNSF maintains rate spreads between unit sizes, how will you maintain those spreads with a mileage-based fuel surcharge vs. one based on rates?The spread will be maintained in the rate but cannot be maintained in the fuel surcharge. Since the mileage-based fuel surcharge is a flat charge, not a differential charge, it will be applied equally to all rates between the same O-D pair. What is the relationship between how much BNSF pays for diesel fuel and HDF?BNSF has found that the change in the national price of HDF closely correlates to the change in our fuel expense. HDF is a highly correlated index—it is not the price BNSF pays for fuel. Does the fuel surcharge apply to empty moves?Fuel surcharge applies to revenue movement of empty equipment. It does not apply to return of empty cars for reloading, or to other non-revenue empty car moves. |
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© 2006 BNSF Railway Company. All Rights Reserved.
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