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Fuel surcharge legislation, security, NAFTA and HOS

Fuel surcharge bill introduced to Senate 
Legislation that would institute a mandatory fuel surcharge on all truckload shipments and mandate 100 percent of the surcharge be passed on to owner-operators was introduced by Sens. John Kerry (D-MA) and Christopher “Kit” Bond (R-MO) on Feb. 7, 2002. The bill S1914, The Motor Carrier Fuel Cost Equity Act of 2002, is the Senate companion to a similar bill (HR2161) introduced into the House of Representatives by Reps. Nick Rahall (D-WV) and Roy Blunt (R-MO).

Although fuel prices have moderated as of late, the trucking industry is still reeling from the repossession of more than 200,000 trucks and bankruptcies of 7,000 motor carriers during the past two years. Passage of the fuel surcharge bill would prepare the industry for future spikes in price of fuel. Oil industry analysts say recent changes in the oil refining business will have the effect of greater instability in fuel prices in the near future.

The current fuel surcharge bill is slightly different than the one passed by the House before the last election. First, the fuel surcharge would be triggered whenever the current average retail price of diesel goes above $1.15 per gallon. The current average price of fuel is determined by an at-the-pump survey conducted every week and published each Monday by the Department of Energy. The amount of the fuel surcharge per gallon would be the current weekly average fuel price minus $1.10.

Sen. Kerry changed the legislation by making the surcharge reflect regional differences in fuel prices. In additional to a national average diesel price, the Energy Department publishes five regional average diesel prices each week. Under the Kerry bill, the weekly average fuel price used to determine a fuel surcharge would be the average price in the region where a load is physically tendered. The five regions include the East Coast (broken down into New England, Central Atlantic, and Lower Atlantic sub-regions), Midwest, Gulf Coast, Rocky Mountain and West Coast.

In order for this bill to pass, Congress needs to hear from truckers that a mandatory fuel surcharge must be in place to protect small businesses from spikes in fuel prices. Both of your senators should be asked to sponsor S1914, and your elected representative in the House should be asked to sponsor HR2161. Both bills are titled the “Motor Carrier Fuel Cost Equity Act.”

Security measures hit the trucking industry 
Several initiatives have been undertaken to address the potential for terrorists to use a truck to attack the United States. These initiatives come in response to concern for the ease with which a truck may be stolen and used by terrorists. Unfortunately, some in the national security community call an 18-wheeler a “poor man’s B-52.”

Congress fired the first shot across the hood of the trucking industry with the passage of the PATRIOT Act. This was a broad piece of legislation that addressed many issues including the creation of more tools for law enforcement to investigate terrorists. It also required all persons who haul hazmat to undergo a background check. The rules for how the states and the Federal Motor Carrier Safety Administration will conduct these background checks are being written now and should be published this spring.

At the same time, the Department of Transportation has undertaken a major project to create a federal transportation ID card. Under this proposal, every single person who has access to transportation vehicles such as trucks, trains, planes and shipping vessels and access to secure facilities such as docks, ports, hazmat facilities, loading and unloading areas, baggage areas and maintenance areas would be required to have this ID card. The card would be encoded with information allowing someone to validate your identity or restrict or grant your access to secure areas. The government could implement this security tool in regulated areas such as seaports, airports and at the border. Private companies may also be able to use the ID card to restrict or grant its employees (or owner-operators) access to specific work areas.

Finally, the trucking industry has taken steps to devise an industry response to minimize the possibility that trucks are used in a terrorist attack. In its initial stages, the American Trucking Associations (ATA) has proposed that motor carriers have access to all of a driver’s background information contained in government databases, including any criminal record, so that each carrier can decide whether a driver applicant is a terrorist threat. OOIDA has specifically rejected this idea as an unnecessary intrusion of privacy and an ineffective tool against terrorism. OOIDA has stated that if there is a need for a background check for a specific purpose, there should be a single standard for what makes a person a terrorist threat, and the carrier be told only whether a driver meets that standard or not.

OOIDA is exploring this industry effort, however, to determine how owner-operators can contribute to the fight against terrorism. This may include being on the lookout for unusual behavior on the road, and knowing what to do in those circumstances. Drivers are the eyes and ears of the trucking industry, and could have an enormous impact in spotting and preventing possible terrorist activity.

Many of these proposals are in their infancy. The burdens they will impose on the small business trucker are undefined. “Washington Insider” will report on new developments on the war on terrorism and its impact on the trucking industry in future issues of Land Line.

Mexican truck update 
The Department of Transportation has finalized the rules under which it would allow Mexican trucks into the United States and sent them to the White House’s Office of Management and Budget (OMB) for final review. Those rules are expected to be published this spring to meet President Bush’s goal of opening the border by June. Last fall, Congress passed an extensive list of conditions that the DOT must meet before it can open the border to Mexican trucks. These include setting up truck scales at every border, beefing up enforcement at every border crossing, as well as setting up a computer system to allow border officials to verify the validity of Mexican CDLs. The rules at OMB do not address these issues, and critics of the border opening do not see how the Bush administration can meet all of these conditions by June.

Hours of service
Recent statements by Joe Clapp, administrator of the Federal Motor Carrier Safety Administration, indicated the publication of a revised hours-of-service proposal may occur within six months. He also indicated the rule would be split into two proposals: one would contain the non-controversial elements of its previous proposal and the second would contain the more controversial proposals. Virtually all aspects of FMCSA’s previous hours-of-service proposal were the subject of intense public criticism. Although some issues, such as black boxes, can easily be put into the controversial category, it is too soon to say what the FMCSA considers non-controversial about its proposal.

July Digital Edition