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Fuel surcharge bill introduced: how is it different from last year?

On June 13, 2001, Rep. Nick Rahall (D-WV) and Rep. Roy Blunt (R-MO) introduced legislation to provide for a mandatory fuel surcharge with a 100 percent pass-through to owner-operators (see article on page 18 for details and page 12 for Jim Johnston’s comments). Their bill, the Motor Carrier Fuel Cost Equity Act of 2001 (HR2161) is essentially the same legislation that unanimously passed the House of Representatives late last year.

The main difference in this year’s bill is the mechanism that triggers a fuel surcharge. Last year’s bill, HR4441, tracked a rolling 52 week average of the national average fuel price as published by the Department of Energy. This year’s bill simply says that there is a fuel surcharge when this week’s national average fuel price is above $1.15 per gallon (or a nickel over $1.10). This fuel surcharge more accurately reflects the true increase in fuel prices and functions like fuel surcharges already used by some motor carriers and accepted by shippers.

This year OOIDA will not be the only association supporting this important bill. The Truckload Carriers Association and a large motor carrier, Dart Transit, have expressed interest in supporting a mandatory fuel surcharge.

The support of motor carriers is an important new development in the effort to pass a fuel surcharge bill. Last year, the American Trucking Associations took no position on the bill, and few news organizations other than Land Line and one or two others reported on the bill. As a result, few motor carriers learned of it until after its passage through the House of Representatives.

When trying to get legislation passed, there is no such thing as too much support. Owner-operators should ask everyone who is interested in their survival to call and write their elected representative to ask them to co-sponsor and support HR2161. This list includes friends, family members, fellow truckers, and even their motor carriers.

There are several reasons that motor carriers should support the bill. First, all motor carriers will be required to impose a fuel surcharge, therefore, no carrier will be at a competitive disadvantage for increasing their freight rate by the amount of the surcharge. Second, the bill specifically requires shippers to pay the fuel surcharge. Next, motor carriers who use brokers and freight forwarders will benefit because they are also required to impose a fuel surcharge and pass it on to the motor carrier who pays for fuel. Finally, the mandatory fuel surcharge will help motor carriers support and retain their owner-operators.

Shippers and brokers associations are, once again, likely to be the main opposition to HR2161. Their main arguments are that the marketplace should take care of this problem, and that they are already paying a fuel surcharge and shouldn’t have to pay two surcharges. The responses to these arguments are simple. First, if the marketplace could take care of this problem, then we would not have had 200,000 trucks repossessed and thousands of motor carrier and owner-operator failures in the last 18 months. Second, the fuel surcharge legislation will not apply to shippers already paying a fuel surcharge. They will not be asked to pay two fuel surcharges. (The bill requires, however, that all fuel surcharges, whether mandated by the law or not, be passed on to the party who pays for fuel).

Last year, small business truckers and home heating oil users in the northeast United States were the first people to undergo the hardship of high energy prices. This year, rolling blackouts in California and high fuel prices have brought energy issues to the national spotlight. President Bush and members of both houses of Congress have proposed “national energy plans” that include some combination of increasing domestic energy production and promoting conservation efforts. The goal of these plans is to provide long term stability to the country’s energy supply. The fuel surcharge bill, however, could provide immediate relief to small business truckers.

When you contact your members of Congress, you should stress that while you support the creation of a national energy plan, you have an urgent need for short term help. HR2161 would provide that short-term help and should be a part of Congress’ response to energy problems this year. All members of Congress can be reached through the Capitol switchboard at (202) 225-3121 and by mail to the address: The Honorable [your Representative’s name], Washington, DC 20515 (no street name needed)