News
A matter of trust
Bills seek sunshine and accountability in trucking transactions

By Jami Jones
senior editor

 

Small-business truckers facing skyrocketing fuel costs and profiteering middlemen may see a new way of doing business in the industry – thanks to a few bills and a congressional hearing.

The bills, one in the Senate and two in the House of Representatives, seek to close loopholes that have allowed middlemen in the trucking industry to live high on the hog by pocketing fuel surcharges off freight rates and refusing to disclose financial information on loads.

The very situations those bills seek to counter were highlighted in a hearing of the House Transportation and Infrastructure Committee in early May.

The bills and the hearing make it clear that one thing is happening for sure: Lawmakers on Capitol Hill are listening to demands for help from truckers.

“Lawmakers didn’t wake up and recognize the impact that fuel prices are having on the trucking industry. Calls, letters and personal visits by truckers as well as their friends and families made this happen,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

“Efforts around the country by truckers staging protests and putting the pressure on their state and federal lawmakers have kept this issue in the national spotlight. There’s no way Congress could ignore the situation small-business truckers are in.”

The ball really started rolling with a bill introduced in late April by Sen. Olympia Snowe, R-ME, and co-sponsored by Sen. Sherrod Brown, D-OH. It seeks to mandate 100 percent pass-through of fuel surcharges to whoever actually pays for the fuel.

OOIDA commended both Snowe and Brown for their leadership in introducing the bill – S2910 – called the “Trust in Reliable Understanding of Consumer Costs Act” or “TRUCC Act.”

Less than two weeks later, the TRUCC Act gained more traction when it was also introduced in the House of Representatives.

Rep. Peter DeFazio, D-OR, introduced a bill in the House of Representatives that is identical to the Senate bill. His bill is HR5977.

Rep. Thomas Petri, R-WI, had introduced another version of the TRUCC Act in the House before DeFazio filed his. The two have since joined efforts, and Petri as well as Rep. Brad Ellsworth, D-IN, signed on as co-sponsors to DeFazio’s bill.

At press time, all the bills had been referred to committees in their respective chambers of Congress.

“This legislation will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel,” said Spencer.

Fuel surcharges have been a staple in the industry as a way that trucking companies could recoup the high cost of fuel. And now with record-high fuel prices, more and more is being collected – but not passed on.

Currently, there is no uniform fuel surcharge standard for the trucking industry. Fuel surcharges must be negotiated individually, leaving shippers and truckers vulnerable to opportunistic middlemen.

“It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges to the truckers who are actually hauling the freight and paying the fuel bill,” Spencer said.

That’s the same message Spencer delivered at a hearing in early May before the House Transportation and Infrastructure Committee’s Subcommittee on Highways and Transit.

That point was challenged a couple of different times during the hearing by Robert Voltmann, president and CEO of the Transportation Intermediaries Association – a group representing brokers.

Even when questioned by DeFazio, who is chairman of the subcommittee, Voltmann insisted that brokers pass along the entire surcharge – even at a loss to the broker sometimes.

DeFazio introduced his version of the TRUCC Act immediately following the hearing, which suggests Voltmann’s contention that surcharges are passed through was not entirely believable.

The TRUCC Act, if approved by both chambers and signed into law, will mandate that middlemen who charge a fuel surcharge pass that surcharge along to the person who actually foots the bill for the fuel.

In addition to requiring 100 percent pass-through of the fuel surcharge, the bill seeks to make sure truckers know all of the charges middlemen are collecting on loads.

Right now, regulations mandate that all parties to the transactions have access to the paperwork outlining rates and such. Spencer pointed out that many brokers have essentially chosen to ignore these regulations, making them ineffective.

The legislation seeks to mandate that truckers who pay for the fuel and haul the load receive a written list that specifically identifies any freight charge, brokerage fee or commission, fuel surcharge or adjustment, and any other charges invoiced or otherwise associated with the load.

Truckers who want to express their support for the House version of the TRUCC Act, HR5977, or the Senate version, S2910, should contact their U.S. representative and two U.S. senators. Those who don’t know who their representative or senators are can call the Capitol Switchboard at (202) 224-3121 and provide their ZIP code to the operator to be connected to the appropriate offices. LL

jami_jones@landlinemag.com

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