OOIDA advances mandatory fuel surcharge legislation

Less than a month after the OOIDA board of directors named the reintroduction of the fuel surcharge legislation as its top priority, the Motor Carrier Fuel Cost Equity Act of 2001 (HR2161) was introduced by Congressman Nick Rahall (D-WV) and Congressman Roy Blunt (R-MO). The legislation, introduced on June 13, will create a mandatory fuel surcharge program for the trucking industry to help carriers and small business truckers combat the effects of sudden fuel spikes.

OOIDA president Jim Johnston said, “Our work with lawmakers is only half done at this point. We still have to convince the full U.S. House and Senate to pass this legislation immediately so it can be made law.”

Johnston added, “Even though the fuel prices have been moderating to some extent as of late, it is important to recognize that the slightest supply disruption could send prices soaring again. With a mandatory fuel surcharge, high fuel prices will have less of an impact and recovery will be quicker for owner-operators.”

Additional co-sponsors of HR2161 include Congressman Alan Mollohan (D-WV), Robert Ney (R-OH), Collin Peterson (D-MN), Ted Strickland (D-OH), William Lipinski (D-IL) and Corrine Brown (D-FL).

This legislation had originally been introduced in the 106th Congress as HR4441, where it passed unanimously in the House in October 2000 but failed to make it to the floor of the Senate before its adjournment. This year, OOIDA won’t be the sole supporter. The Truckload Carriers Association has pledged its support of fuel surcharge legislation, as well.

In May, Don Oren, president of Dart Transit, St. Paul, MN, expressed unreserved support for the legislation. “Getting 100 percent of shippers to pay their fair share is a national problem for the entire trucking industry,” said Oren. “So, we believe that national legislation is required to protect the interests of individual owner-operators. That is very important because independent contractors are the backbone of the trucking industry.”

HR2161 would make it mandatory that motor carriers, brokers and freight forwarders add a fuel surcharge adequate to cover increased costs when fuel exceeds $1.10 per gallon by 5 cents. It will also mandate that the surcharge be paid by the party paying for the transportation service and that it be passed through in full to the party who pays for the fuel.

During his introduction of the bill, Congressman Rahall indicated that the goal of the legislation was to ease the financial burden on small business truckers who need relief from diesel fuel price spikes. “In the last 18 months, the price of diesel fuel has risen more than 50 cents a gallon over the 1999 levels,” Rahall said. “While the price spikes have hurt the entire trucking industry, no one is hurt like the little guy. Fuel is the single biggest operating cost of a small business trucker and accounts for up to one-third of their budget. According to an analyst with A.G. Edwards, almost 200,000 trucks have been repossessed since January of 2000 because small business truckers could not make ends meet.”

Rahall went on to add, “The price of diesel fuel was the primary factor in causing these bankruptcies. Just-in-time deliveries are being threatened, fewer transportation alternatives for shippers are available and consumers could face a rise in the price of various goods resulting in a national economic downturn.”

Congressman Rahall pointed out that HR2161 gives a safety net of relief to owner-operators, shippers and consumers by ensuring that a fuel surcharge will be assessed at times of diesel fuel price spikes. He continued by warning, “A lack of relief from diesel fuel prices is a formula for disaster in the making, considering the large number of bankruptcies we have recently witnessed in the United States.”

For more details on the legislation, see Paul Cullen Jr.’s “Washington Insider.” For Jim Johnston’s comments on the bill, see “Issues and Positions.”