Shipper sues US LTL giants
KANSAS CITY -- Eleven of the largest LTL carriers in the U.S. are being accused of colluding to fix shipping rates through fuel charges. According to the Kansas City Star, Farm Water Technological Services Inc. of California is seeking class-action status for a suit launched against several large LTL firms, including Kansas City-based YRC Worldwide, UPS, FedEX, and Con-Way. The shipper, which distributes irrigation and other farm equipment, is alleging that the highly-consolidated LTL sector in the U.S. banded to impose "collusive" fuel surcharges when diesel prices spiked in 2003. Farm Water Technological Services claims that the surcharges have less to do with the carriers trying to recoup rising fuel costs as much as they were used to boost profits. UPS Freight was one of the few carriers to respond to the Star, saying it is prepared to vigorously defend itself against the allegations, which the company said are "without merit." While it's true that a handful of top carriers in the U.S. LTL sector have merged over the last few years (Yellow and Roadway; UPS acquired Overnite etc.), fuel surcharges are by no means unique among LTL carriers or the trucking industry in general. Many carriers, from LTL to truckload, implemented fuel surcharges after the price of diesel rose sharply in 2002. -- with files from the Kansas City Star