Tariff 9900 - OHD percentage based Fuel Cost Adjustment
Tariff 9900 Program schedule - 2013 to current
The use of a 15 day average fuel index price is consistent with the Application Period, which is 15 days in length on average. Calculating the average fuel index price based on 15 days prior to the 20 days preceding the application date more closely aligns FCA to fuel price changes.
When fuel prices rise rapidly, a monthly FCA program does not keep pace in offsetting the higher fuel expense. Conversely when fuel prices decline the FCA program lags behind the fuel price change. This short-term lag can adversely impact both the rail carrier and the shipper.
CP is providing more than the required advance notification for the tariff amendments.
Once the amendments are in effect the tariff itself remains unchanged, only the product of the formula changes. Providing 20 days lead time is consistent with the objective to make the program more responsive for CP and the customer. The lead time change is compliant with both STB regulations and the Canada Transportation Act.