CN announced that it will reduce its fuel surcharge under the company’s Tariff 7401, effective Jan. 1, 2007. The surcharge reduction will be the third since CN introduced Tariff 7401 in April 2005.
James Foote, executive vice-president, Sales and Marketing, for CN, said: “This latest reduction in CN’s fuel surcharge reflects our commitment to fair pricing for a quality transportation product. We apply the surcharge to our customer base as broadly as possible. We believe this universal application is equitable to all of our customers and responsive to the marketplace.”
When the West Texas Intermediate (WTI) crude oil monthly average price equals or exceeds US$25.00 in the second calendar month prior to the month in which the fuel surcharge is applied, CN’s fuel surcharge is calculated starting from a base of 1.5% of the line haul freight charge. Effective Jan.1, 2007, for each incremental fluctuation of US$1.00 per barrel of WTI crude oil above US$25.00, the fuel surcharge will decrease or increase by an incremental 0.23%, which is eight percent lower than the 0.25% incremental change under CN’s current Tariff 7401.
CN’s new fuel surcharge will remain the lowest in the North American rail industry based on a WTI price per barrel of US$25.00.
At a WTI price level of about US$60 per barrel on Jan. 1, 2007, CN’s new fuel surcharge would be 9.32%, compared with 10.0% under the current tariff.