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At a hearing of the Surface Transportation Board of the Department of Transportation in May, shippers complained that calculating surcharges as a percentage of the base rate was an inaccurate method that bore "no direct relationship to actual fuel consumption." Shippers also accused railroads of double-dipping—i.e., the existing rates already call for higher costs when fuel rises, even before the fuel surcharge is levied. Which may help explain why a big railroad like Norfolk Southern was able to report record results in the most recent quarter, even though the amount it spent on diesel rose 62 percent from the year before. The STB noted that the railroads "largely concede that their fuel surcharges are not tied to the fuel consumption associated with the individual movements to which they are applied." Instead, because they can't recover fuel surcharges from every customer (you try bargaining with Wal-Mart), "some shippers are charged surcharges that are greater than the actual incremental cost of the fuel used for their particular shipments." In August, the board issued a new rule saying that railroads have to figure out how to tie surcharges more closely to the higher costs of moving a particular customer's goods and submit monthly reports to the government showing actual fuel costs, consumption and surcharge revenues.

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