There is a brewing storm out there against the main rail carriers..
Last week I posted on Arched Daniel’s (ADM) suit against the four major carriers, Union Pacific (UNP), BNSF (BNI), CSX (CSX), Norfolk Southern (NSC), and Kansas City Southern (KSU).
Today in the Wall St. Journal, they reiterate my opinion saying that “lawyers involved in the class-action case (currently ongoing in the District of Columbia) said the entry of ADM, one of the world’s largest grain processors, could herald similar moves from other large rail customers.
What is so important here is to note that the majority of the improvements in the financial fortunes of the railroads the last few years can be directly related to their ability to pass along these fuel surcharges to rail users.
Should they be forced to refund a chunk of this money and should they suddenly come under increased scrutiny, they may find themselves in the same boat the US trucking industry is, being pinched by rising fuel costs.
How long do we think it will be before the American Trucking Association starts in earnest to rile shippers and lobby congress to begin to look into this?
This has not got much press lately but is will begin to snowball and one ought to expect other rail shippers to begin to pile in..
Disclosure (“none” means no position):Long ADM, None
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