JACKSONVILLE, Fla. – In an effort to more quickly respond to changing market conditions and the continued volatility in fuel prices, CSX Transportation (CSXT) announced today modifications to its fuel cost recovery program.
After the transition to the new program, CSXT’s fuel surcharges will be applied in smaller increments, on a more real-time basis, consistent with increases or decreases in fuel prices. With the changes, CSXT will no longer only adjust surcharges in 2 percnt increments for every $5/barrel change in crude oil prices. Instead, the surcharge will be adjusted up or down 0.4 percent for every dollar increase or decrease in oil prices above $23/barrel.
“Given the continued instability in oil prices we must, like most American companies, implement better ways to manage fuel price changes and market volatility,” Michael J. Ward, chairman and CEO of CSX Corporation and president of CSXT said. “As a result of this new program, CSXT’s fuel surcharges will more directly respond to fuel price changes in a real-time manner.”
These charges will be determined monthly based on the thirty-day average price of West Texas Intermediate (WTI) crude oil. When fuel prices drop below $23/barrel, no fuel surcharge will apply.
“These changes will allow CSXT’s surcharge program to more accurately reflect fuel price fluctuations in a more timely fashion,” P. Michael Giftos, CSXT’s executive vice president and chief commercial officer said. “In addition, the modified program provides two things our customers have asked for: smaller, more incremental changes in the fuel surcharge and easier administration since it is changed on a predictable, monthly basis.”
CSXT will amend its 8100 and 8200 tariffs later this month and the new fuel surcharge program will take effect not less than 20 days after. Until the new surcharge becomes effective, the current program will remain in place. These tariff changes will not change the existing fuel cost recovery program at CSX Intermodal.
