Freight Management Services
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900 Dudley Avenue
Cherry Hill, NJ 08002
Phone: (856) 317-9600
team@tuckerco.com
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May 24, 2005
Carriers, Shippers Vow to Fight Fuel Surcharge Legislation
By Tiffany Wlazlowski, Senior Reporter
Motor carrier and shipper groups said they would fight congressional legislation that would require shippers to pay fuel surcharges to truckload carriers, claiming that such a move represented a step toward reregulating the trucking industry.
The surcharge measure was offered as an amendment to the $283.9 billion transportation funding bill that the House of Representatives approved March 10 (3-14, p. 1).
The amendment would require shippers to pay a fuel surcharge to cover the increased cost of fuel when it goes 5 cents above an established benchmar’k price of $1.10 per gallon, based on the weekly retail on-highway diesel price published by the Department of Energy.
“The responsibility to [set and collect surcharges.] is between the parties,” said John Ficker, president of the National Industrial Transportation League. “It isn’t something the government needs to regulate. Deregulation was to let the marketplace establish the standards for doing business. This takes you back to the days when prices were established by a government entity.”
Ficker said the shippers’ group sent a letter March 29 to the House Transportation and Infrastructure Committee and the Senate Commerce, Science and Transportation Committee registering its opposition to the amendment.
The Owner-Operator Independent Drivers Association pushed for the measure that was submitted by Rep. Don Young (R-Alaska) and attached to the bill March 10, saying it would make it easier for owner’- operators to recoup fuel expenses.American Trucking Associations, the National Small Shipments Traffic Conference and the Transportation Intermediaries Association have all joined NITL, sayin they opposed the legislation an insist a legislated fuel surcharge was inconsistent with a deregulated marketplace.
“ATA membership is opposed to economic regulation and fuel surcharge legislation would be a step toward re-regulation of the trucking industry,” said Prasad Sharma, ATA assistant general counsel. “There are problems with the bill itself, but the philosophical issue is the biggest hurdle.”
Bob Voltmann, TIA chief executive officer, said his group opposed the amendment because it would regulate private contracts based on a single mileage guide that would force carriers and shippers to track fuel prices for every load, in districts outlined by the Department of Defense.
Such a structure, he said, equated to price setting and opened the door for owner-operators to sue motor carriers if they used the wrong district, mileage guide or fuel price.
“It will hurt more motor carriers than it helps,” Voltmann said. “We are definitely opposed.”
Is the industry struggling with the increasing price of fuel? We absolutely are,” said Jeffrey Tucker, chief executive officer of freight broker Tucker Co. “Do we need government intervention to regulate us? Absolutely not.”
In the past, ATA remained neutral on the issue of fuel surcharge legislation. However, this year was different, said James Whittinghill, ATA senior vice president of legislative affairs.
In an interview March 25, Whittinghill said that ATA had usually been neutral on sur’charge legislation because previous attempts had little chance of passing Congress.
“We’ve always monitored [fuel surcharge legislation] very closely and it had not really been in a position to be passed through by Congress previous to this year,” Whittinghill said., “This time, it’s going to be in play when they conference the highway bill.”
But Jim Johnston, president of OOIDA, said in an interview that it was “difficult to comprehend the opposition” Johnston maintained the measure was necessary to prevent owner-operators from parking their trucks and constraining truckload capacity because they’re unable to collect fuel expenses.
“They can’t see beyond the end of their noses,” Johnston said. “Fuel prices themselves are not the problem. It’s the volatility, and over the years it’s put a lot of people out of business. It’s incumbent on Congress to do what is necessary to ensure a stable national transportation system.”
Johnston acknowledged, however; that opposition to the measure was mounting, saying “it’s possible this could wind up being defeated, which would be tragic.”
Truckload Carriers Association spokeswoman Nancy O’Liddy said the group’s members supported legislation, but that TCA was working to modify the language in the House version.
O’Liddy said the current amendment’s language was too vague and could force TL carriers to pay fuel surcharges to owner-operators even if they weren’t recouped in the first place.
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