Record MTMC fuel surcharge eases truckers' burden

| 3/28/2003

The Military Traffic Management Command’s fuel surcharge adjustment rate reached a record high March 3 as the national average diesel price climbed to $1.753 per gallon.

The adjustment rate, which motor carriers receive to offset rising fuel prices, jumped to 5 percent. For every 10 cents the price of fuel rises above $1.301 per gallon, MTMC pays its carriers 5 percent of the difference between the $1.301 baseline price and the actual price of fuel per gallon.

MTMC manages loads hauled for the military by private carriers, including owner-operators. It acts as a transportation broker between government shippers and commercial carriers.

MTMC first implemented a fuel surcharge in April 2001. Rates are posted monthly and affect shipments picked up on and after the 15th of the month through the 14th of the following month, said Robyn Hamill, industry economist with the command's Distribution Analysis Center. The rate in February, when the average cost for diesel was $1.542, was 3 percent.

Under a policy known as TR-12, the command bases the adjustment rate on the national average price for diesel on the first Monday of each month, Hamill said. MTMC uses prices posted to the official Department of Energy Web site.

The policy, which stems from an agreement effective since April 2001 between the command and industry partners, will be reauthorized for the next 12 months, said Ruth Tetreault, administrator of the MTMC Industry Fuel Board, which wrote the original agreement.

"We are helping ourselves out,” Tetreault said. “We are ensuring our cargo is going to be moved as scheduled."

The program prevents industry from bearing the costs associated with rising fuel prices, she said.

"Industry leaders tell me if there is one good thing MTMC has ever done, it is to institute this policy," she added. “This supports the war fighter [combat troops] and promotes readiness by ensuring continued, timely delivery of cargo."

--by Rene Tankersley, feature editor