Friday, April 11, 2008

The High Cost Of Shipping

Archer Daniels Midland Sues Union Pacific, Other Railroads

MINNEAPOLIS--Archer Daniels Midland is suing the Union Pacific Railroad along with four other railroad giants, in a federal lawsuit filed in Minnesota. The Ag giant is accusing the companies of conspiring to fix rail fuel surcharges.

The lawsuit was brought by agricultural product processing company Archer Daniels Midland Co., based in Decatur, Ill. Archer ADM says that the company has payed out more than $250 million to the railroad companies since 2003 because of the alleged conspiracy.
Railroads impose rail fuel surcharges on shippers for transportation services. The fees help railroads hedge unexpected spikes in fuel prices.

The ADM lawsuit alleges that the five big railroad companies fixed the prices so they wouldn't have to compete with one another and kept the surcharges artificially high.
Similar lawsuits have been filed in other jurisdictions.

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