SPECIAL REPORT: Bill mandates pass-through of DOD fuel surcharges

| 9/29/2008

Monday, Sept. 29, 2008 – The days of pocketing a profit off fuel surcharges on Department of Defense loads collected by middlemen who don’t buy the fuel are numbered thanks to a bill recently passed by Congress.

The Department of Defense Authorization Act for Fiscal Year 2009, approved by the Senate on Saturday, Sept. 27, includes language that mandates the pass-through of any fuel surcharges collected on DOD loads to the person who bears the cost of the fuel.

“I think it’s a major step in the right direction,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

“In terms of fairness and in terms of assuring shippers – in this instance U.S. taxpayers – get a fair deal on freight shipping charges and that truckers get the revenue they were entitled to receive to offset the higher cost of fuel.”

Rep. Peter DeFazio, D-OR, got the ball rolling on the fuel surcharge pass-through when he introduced an amendment to the defense bill in May when the House of Representatives was debating its version of the bill.

The fuel surcharge language was approved in the House version of the bill. However, it was not included in the Senate’s version of the defense bill.

During conference committee – when members of both chambers get together to hammer out a final version that is sent to the president for a signature – the language was added back in.

To ensure pass-through of the surcharges to the truckers who actually pay for the fuel, the secretary of transportation is directed by the bill to insert language into all DOD contracts, which outlines the pass-through requirement with motor carriers, brokers or freight forwarders.

The bill has been sent to the president to be signed into law.

– By Jami Jones, senior editor