Issues & Positions
Mandatory fuel surcharge

Nothing worthwhile is easy. Those words of wisdom were, I’m sure, passed along to most of us when we were growing up. They usually were heard when we were about to give up on some goal or project we really wanted to achieve, but the obstacles to success seemed almost insurmountable.

When you think about it, this advice applies to many aspects of every day life and certainly to operating any kind of business especially small-business trucking. Success comes to those who are willing to work hard and fight for what they want to achieve. If it were easy anyone could do it.

This rule also applies to gaining legislative solutions to problems that, if not addressed, can become insurmountable obstacles to success. Unstable and escalating fuel prices in an industry so competitive that it lacks the ability to establish and maintain adequate rates to recover its costs is one of those obstacles that requires a legislative solution. Our experience last year in trying to win passage of mandatory fuel surcharge legislation is convincing proof that achieving this solution certainly will not be easy. Without it, though, not just the profitability but the very survival of many trucking businesses, especially small-business owner-operators, is at risk.

On June 13, HR2161, the Motor Carrier Fuel Cost Equity Act of 2001, was introduced by Congressman Nick Rahall (D-WV) and co-sponsored by Congressman Roy Blunt (R-MO), Congressman Alan Mollohan (D-WV), Congressman Bob Ney (R-OH), Congressman Collin Peterson (D-MN), Congressman Ted Strickland (D-OH), Congressman William Lipinski (D-IL) and Congresswoman Corrine Brown (D-FL). This bipartisan legislation will make it mandatory that motor carriers, brokers and freight forwarders add to the freight charges (as a separately listed charge) a fuel surcharge adequate to cover the increased cost when fuel exceeds $1.10 per gallon by 5 cents. It also will mandate the surcharge be paid by the party paying for the transportation service and that it be passed through in full to the party who pays for the fuel. It sets, for the purpose of calculating the fuel surcharge, an average fuel economy rate of 5 miles per gallon.

As I already mentioned, gaining passage of this bill will not be easy. We have a hard fight ahead of us. We almost succeeded last year in large part because many of our members took the initiative to contact their elected representatives to ask for their support. The legislation passed in the House of Representatives without a single “no” vote, but we couldn’t get it to the floor of the Senate for a vote before they adjourned. I am certain that if every one who would have benefited from passage of this legislation would have contacted their elected representatives, we would have been successful in both chambers and this law would be in place today. The power of your numbers and your voice can make a tremendous difference with lawmakers.

Over the past several months OOIDA representatives have met with influential House and Senate members to convince them of the extreme importance of passage of this legislation. We advised them that many of the dire predictions from last year of what the consequences would be if this legislation were not passed have, in fact, already occurred. Thousands of truckers have gone out of business resulting in over 200,000 truck repossessions in the past 15 months. The market is now flooded with trucks sitting on dealers’ lots causing used truck values to plummet and wiping out expected equity for those still in business. New truck production has been slashed in half resulting in thousands of layoffs at truck manufacturing facilities. Truck dealerships have also felt the sting with many experiencing significant financial difficulty.

In our meetings with lawmakers we also had the opportunity to discuss the potential impact of NAFTA and the consequences of allowing Mexican trucks free access to U.S. highways. We have also discussed the issue of extreme delays and other loading and unloading abuses at shipping and receiving docks and the negative impact this creates on trucking profitability as well as its contribution to driver fatigue problems and highway safety.

Our input has been very well received. I believe many of these representatives we have met with recognize the importance and will be willing to give their support in addressing these issues. Success or failure, however, will be dependent on how active you are in making the necessary contacts with your elected representatives to convince them to support this effort.

I know many of you find it difficult to make these kinds of contacts. You don’t have secretaries to type your letters and correct the spelling. Some are intimidated at the prospect of calling a congressional or Senate office. The truth is, though, that they really do want to hear from constituents to receive guidance on important issues and they really don’t care how articulate you are or how well you write. It’s the information and guidance you give them that’s important. If they know it’s important to you, it becomes important to them.

It’s also important to gain the support of motor carriers for this effort. The Truckload Carriers Association has voted to support the effort to pass fuel surcharge legislation, but many carriers and brokers are either on the fence or oppose it for one reason or another. You need to give them the message that you expect their active support for this effort.

Whether you are a member of OOIDA or not, don’t sit on the sidelines on this important issue. Get involved. We need your help.