My editorial comments in the October issue of Land Line began with an expression of my frustration that our mandatory fuel surcharge legislation had not yet been passed by Congress. At that time we were only a couple of weeks away from the scheduled adjournment of Congress, and while our chances looked good, progress had slowed and we were rapidly running out of time.
Well, here I am again in the same predicament. This is still the most important issue on the agenda. Fuel prices are still rising, with strong prospects for even higher prices and perhaps even shortages over the next several months. HR 4441 (The Motor Carrier Fuel Cost Equity Act of 2000), was passed by the full House, without objection, on October 10th and currently awaits action in the Senate. Because of our intense lobbying efforts and the many thousands of phone calls from our members to their U.S. Senators, we now have what appears to be majority support in the Senate for this important legislation.
The problem is, we also have some opposition that has succeeded in delaying action. The Congressional adjournment date has been extended, primarily to deal with unfinished appropriations legislation, and with this being an election year with no clear winners in sight, the political battles are raging. As usual, when this happens, common sense proposals and what's good for the country, takes a back seat to political infighting. Again though, hopefully by the time you read this, HR 4441 will have been passed and we will have a law in place to support our efforts to gain reasonable fuel surcharge relief.
The fact is though, that whether we have a law in place or not, the solution will require you to draw the line and demand equitable compensation on each load from every carrier, every broker, and every shipper. You must be prepared to tell them what to do with those unprofitable loads.
Do not accept another load that does not contain a fuel surcharge adequate to compensate you for your increased cost of fuel! Do not pull another load for a carrier or broker that retains a portion of the fuel surcharge while you pay the entire cost of fuel! And most important, do not accept any excuses, delays, or partial reimbursements. If you do not immediately draw the line and take a stand, then you will be contributing to the continuation of this problem, not only for yourself, but for everyone else as well.
What is the adequate amount of a fuel surcharge? As established by the U.S. House Surface Transportation Subcommittee, upon approval of HR 4441, an adequate fuel surcharge is computed using the difference between the current national average retail on highway diesel price as published by the U.S. Department of Energy, and the most current previous 52-week national average price, divided by a set average fuel consumption rate of five miles per gallon times the number of paid miles driven as determined under the Department of Defense Military Traffic Management Command's Defense Table of Official Distances.
This formula was established on the assumption that base rates would be increased over time to adequately reflect increased costs, and that the surcharge requirement would be in place at the time of any dramatic increase in the cost of fuel. The fact is however, that fuel costs have been up dramatically for this entire year and for the most part, there have been no offsetting rate increases. Your reference point should therefore be the national average fuel price for 1999, which sets a more realistic baseline prior to this year's price run-up.
The DOE's 52-week national average price of diesel fuel for 1999 was a dollar twelve point zero five cents per gallon, and the current DOE national fuel price average as of Oct. 29, 2000, is $1.648. This equals an average fuel cost increase of 52.75 cents per gallon, divided by five miles per gallon, which means you must receive 10.5 cents per mile surcharge to cover your increased cost of fuel.
While slightly over ten-and-a-half cents per mile is what you must demand to cover your increased cost of fuel, it's even more important to look at your base compensation package. It's time to cut loose from those scum-sucking bottom feeders and get rid of those in this industry who either get rich by underpaying professional truckers, or who simply don't have the backbone to standup to their shippers and demand reasonable rates. They drive down the rates for the entire industry, make it impossible for the better operators to establish and maintain reasonable rates, and have forced the occupation of professional truck driver into nearly poverty level status.
Our cost of operations figures for 1999 show that at 120,000 miles a year, and 93 cents a mile for all miles traveled, take home compensation is approximately $35,000 a year. Considering the amount of time and work required, that's barely minimum wage. This doesn't take into consideration this year's fuel cost increases or the substantial deterioration in equipment values that have occurred over the past year.
By the way, speaking of scum-sucking bottom feeders, the Transportation Intermediaries Association, that's the association that represents truck brokers, is already bragging that they killed the surcharge legislation. The announcement on TIA's web site states, "Legislation that would have imposed a national fuel surcharge on brokers died without any congressional action. This regulatory legislation would have allowed the federal government to impose pricing on a free-market system. While it is dead this year, it will probably re-appear next year and TIA will be keeping close watch to assure that any attempt to impose pricing in the industry fails." You might want to check to see if your broker is a member of this organization before you haul that next load for them. The motor carrier's association (ATA), has also been no help on this issue. Their expressed position of neutrality is viewed by the Congress as opposition.
Now really is the time to draw the line. We must collectively stand together and demand an end to this cut-rate crap. Shutdowns and demonstrations are not necessary and won't solve the problem. Refusing to haul those cheap loads will solve the problem very quickly if we make the commitment now!