Fuel-surcharge squabble headed for second round

For many months, independent truckers and truck brokers have crossed swords over the pass-through of fuel surcharges paid by shippers.

By Mark B. Solomon

For many months, independent truckers and truck brokers have crossed swords over the pass-through of fuel surcharges paid by shippers. Truckers claim brokers should be passing on the surcharges in full to the trucker. Brokers say they are entitled to a cut.

Late last year, the dispute came a step closer to resolution when Congress took action to settle the argument as far as military traffic was concerned. The FY 2009 Pentagon appropriations bill contains language requiring the Pentagon to establish a mechanism ensuring a 100-percent pass-through of fuel surcharges to the party who paid for the fuel. The secretary of defense must issue a status report to Congress by early summer 2009. (The Pentagon establishes its own non-negotiable fuel surcharges separate from the base rate it pays.)

Now, the question is whether the independent truckers who pressed for the measure can get Congress to enact similar legislation for the commercial side. Todd Spencer, executive vice president of the Owner-Operators Independent Drivers Association, says his group will work in the new Congress to get a similar bill passed. But it will face opposition in its quest. The Transportation Intermediaries Association, which represents truck brokers, forwarders, and other third parties, says it is girding for a fight to block the passage of any such legislation in the new Congress. The TIA was part of a coalition that had opposed the military surcharge pass-through measure.

OOIDA had sought the legislative remedy to the military surcharge dispute because it was concerned that third parties, which touch virtually all military traffic and which broker payments from the Pentagon to the truckers, were keeping large portions of the fuel surcharge for themselves rather than reimbursing the truckers in full.

"Brokers were taking 20, 30, and even 50 percent of the surcharges that should have been passed on to the trucker," says Spencer. "We not only think it's a fraud on truckers, but it's a fraud on consumers and taxpayers."

Spencer says the language in the Pentagon appropriations bill opens the surcharge mechanism to public scrutiny, thus keeping everyone honest. "Shippers and consumers have everything to gain from increased transparency," he says. "We don't think these transactions should be done in secret."

The Transportation Intermediaries Association claimed victory as well. It said Congress stripped out language from the final version that would have required the fuel surcharge to be reported on every Defense Department shipment tendered. In addition, language was dropped from the final bill that would have made private companies doing business with the military publicly disclose their profit margins on each shipment, according to the group. "Congress correctly rejected the margin-posting provision [as] an unnecessary intrusion into private business," says Robert Voltmann, TIA's president and CEO.

Voltmann adds that existing government regulations provide "ample opportunities" for everyone involved to examine the particulars of each transaction.

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