The U.S. Senate Commerce Committee has begun work on a highway bill containing a fuel surcharge. The U.S. House of Representatives adopted a mandatory truckload fuel surcharge into H.R. 3 in March. The amendment from the House Transportation Committee closely resembled a bill advocated by the Owner-Operator Independent Drivers Association in recent years. The House bill would require any carrier, broker or freight forwarder to pass on a full fuel surcharge to the fuel buyer, such as an owner-operator. The surcharge would be the current price minus the benchmark price of $1.10 per gallon. The surcharge would begin when the diesel price surpasses the benchmark price by 5 cents per gallon.

It would not apply to freight agreements already providing a surcharge or fuel cost adjustment as of the date of enactment.

The initial benchmark price would be subject to an annual adjustment based on the percentage change in the previous calendar year’s Annual Truckload Producer Price Index. The “current diesel price” is defined as the latest weekly average on-highway retail price posted by the U.S. Energy Information Administration for the Petroleum Administration for Defense District or sub-district where a shipment is physically tendered.

The Truckload Carriers Association (TCA) supports a federally mandated fuel surcharge, but plans to introduce legislation that would not force carriers to pay surcharges to owner-operators immediately, even if carriers had to sue shippers or brokers for payment. TCA’s language also would calculate mileage for surcharge purposes at 4 miles per gallon, rather than the House 5 miles per gallon. The House version specifies that to calculate mileage, the Defense Department’s official list of distances must be used. The TCA would allow any commercially available mileage guide used by the carrier to calculate its freight charges.

American Trucking Associations (ATA) opposes the legislation and believes a legislated fuel surcharge is inconsistent with a deregulated marketplace. Prasad Sharma (ATA assistant general counsel) said, "ATA membership is opposed to economic regulation and fuel surcharge legislation would be a step toward re-regulation of the trucking industry" and "There are problems with the bill itself, but the philosophical issue is the biggest hurdle." Groups opposing the current legislation include the U.S. Chamber of Commerce, the National Industrial Transportation League, the Motor Freight Carriers Association and the Transportation Intermediaries Association.

After mark-up in committee, the bill must be passed by the Senate before being sent to President Bush to be signed into law. The House-passed bill does not include language sought by the Bush administration to codify current hours-of-service regulations.

In 2002, a mandatory fuel surcharge passed the House but failed in the Senate.

Source: IDEAlliance.