Federal Update
Triple threat
Federal legislation tackles fuel surcharge pass-through

By Jami Jones
senior editor


Brokers and middlemen making a buck off fuel surcharges paid on Department of Defense loads may very well see those days end.

Rep. Peter DeFazio, D-OR, introduced an amendment in late May to the 2009 Department of Defense Authorization bill that, if passed into law, will mandate that 100 percent of surcharges paid by the government be passed through to the person actually buying the fuel.

“This legislation will help truckers, who are hard hit by skyrocketing fuel prices, get what is rightfully theirs,” DeFazio said. “This will ease some of the pressure they are feeling at the pump and help keep them in business.”

The amendment was added to the bill on a voice vote and the House approved the full bill with a vote of 383 to 26.

DeFazio offered the amendment to ensure that fuel surcharges make it back to independent truckers. Because of the sharp rise in the cost of transporting goods by truck, brokers are assessing fuel charges on shippers in order to cover the increased cost of hauling their goods.

DeFazio recognizes that many times independent truckers who purchase the fuel don’t see the surcharges collected on the loads.

Under the amendment, shippers under contract to the DOD would be required to pass through the fuel surcharge to the person who actually pays for the fuel on all trucking contracts. The broker would also be required to disclose any fuel surcharge publicly, including posting it online, and the Secretary of Defense would be required to prescribe regulations to ensure enforcement.

This isn’t the first legislation DeFazio has filed in an attempt to ease the pain of truckers facing nearly $5 a gallon diesel.

A bill introduced May 6 by DeFazio and co-sponsored by Rep. Thomas Petri, R-WI, and Rep. Brad Ellsworth, D-IN, seeks to mandate 100 percent pass-through of fuel surcharges to whoever actually buys the fuel on all loads.

The bill, HR5977, “Truth in Reliable Understanding of Consumer Costs Act,” or the “TRUCC Act,” is identical to a bill introduced in the Senate – S2910 – in late April by Sen. Olympia Snowe, R-ME, and co-sponsored by Sen. Sherrod Brown, D-OH.

“This legislation will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

Fuel surcharges have been a staple in the industry as a way that trucking companies can recoup the high cost of fuel. Now with the skyrocketing fuel prices, more and more is collected – but not passed on.

“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.

To make matters worse, small-business truckers don’t have access to the contracts and rate information negotiated between freight brokers and the shipper or customer they are hauling freight for.

The TRUCC Act also seeks to ensure that brokers and middlemen negotiating a contract to haul freight for a shipper are not using the high price of fuel to exploit that shipper or the small-business trucker who actually hauls the shipper’s freight.

Both the House and Senate versions of the TRUCC Act were in committee as of press time in mid-June.

Truckers wanting to express their support of the TRUCC Act should call both of their U.S. senators and their U.S. representative. Those who don’t know who their federal lawmakers are can call the Capitol switchboard at (202) 224-3121 and provide their ZIP code to the operator to be connected to the appropriate office. LL