OOIDA's fuel surcharge bill introduced in the Senate

| Tuesday, March 05, 2002

Legislation that would require a fuel surcharge on all truckload shipments and mandate that 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. S1914, The Motor Carrier Fuel Cost Equity Act of 2002, is the Senate companion to a similar bill (HR2161) that was 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. OOIDA has been pushing hard for fuel surcharge legislation since fuel prices reach all time record highs in 2000, adamant that the passage of the fuel surcharge bill would prepare the industry for future spikes in price of fuel.

"It's not a question of if fuel prices rise again, it's when," said OOIDA Executive Vice President Todd Spencer. "And that can happen virtually anytime with almost no warning. Given chronic instability in many, if not most oil producing countries, we are more vulnerable now than ever in history. The structure of our own industry is geared to rapidly escalating prices in response to cold snaps and refinery interruptions, etc."

The current fuel surcharge bill is slightly different than the one that passed the House before the last election (HR4441). 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.

Sen. Kerry changed the legislation by making the surcharge reflect regional differences in fuel prices. In addition 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.

OOIDA says in order for this bill to pass, Congress needs to be convinced that a mandatory fuel surcharge must be in place to protect small businesses from spikes in fuel prices. The association urges truckers to contact both your senators and ask them to co-sponsor S1914. Your elected representatives in the House should be asked to co-sponsor HR2161 as well. Both bills are titled the "Motor Carrier Fuel Cost Equity Act."

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