Letter From Doug Glass, Vice President & General Manager - Energy
April 5, 2007
Dear UP Circular 111 Shipper:
As Jack Koraleski advised on March 21, 2007, the STB has ruled that railroads can no longer apply fuel surcharges as a percent of revenue on regulated traffic. Accordingly, Union Pacific has redesigned its fuel surcharge program to conform to the STB ruling.
Today, we are issuing changes to our coal Circular 111 to reflect the new fuel surcharge methodology that will be effective April 26, 2007. Following is a summary of the changes to Circular 111:
- Item 200, which contains rules for "Option 1: Unit Train Shipments - No Volume Requirement" and Item 300, containing rules for "Option 2: Unit Train Shipments - One-year or Longer Volume Commitment" have both been changed to make all rates in UP 111 subject to the new mileage-based fuel surcharge published in Item 694, in UP 6603-series, effective April 26, 2007. This change will result in a higher fuel surcharge on some movements and a lower fuel surcharge on others, compared to the current revenue-based fuel surcharge program.
- The Rules Items (PDF File) , are publically available on UP's web site.
- UP Circular 6603 (PDF File) , our General Rules circular, contains the new fuel surcharge in Item 694.
- Items 3130-6650, the Rate Items, are being furnished separately to customers eligible to ship unit coal trains under UP Circular 111. Option 1 rates have been adjusted to reflect current market conditions.
We will continue to keep you informed of future changes to UP Circular 111. Please feel free to call your UP Business Manager if you should have questions.
Sincerely,
