Get Involved

[Scuba]

SPECIAL REPORT: Bill seeks to end fuel surcharge skimming Thursday, April 24, 2008 – Middlemen in the trucking industry who have been living high on the hog by pocketing fuel surcharges off freight rates may very well find their days numbered thanks to new legislation.

A bill introduced by Sen. Olympia Snowe, R-ME, and co-sponsored by Sen. Sherrod Brown, D-OH, seeks to mandate 100 percent pass-through of fuel surcharges to whoever actually buys the fuel.

The Owner-Operator Independent Drivers Association commended both Snowe and Brown for their leadership in introducing the legislation, which is likely to be called the “Truthful Reliable Understanding of Consumer Costs Act” or “TRUCC Act.”

“This bill will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel,” said Todd Spencer, OOIDA executive vice president. “Senators Snowe and Brown should be commended for their leadership on this matter.”

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

There is currently not a uniform fuel surcharge standard for the trucking industry. Fuel surcharges must be negotiated individually, leaving shippers and truckers vulnerable to opportunistic middlemen.

“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 are often denied 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 looks 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.

A bill number was not immediately available, but truckers wanting to express their support of the TRUCC Act should contact their senators. Those who don’t know who their senators 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.

 

[ratwell71]

Great information. Thanks for passing it on.

 

[LDB]

I've called both my Senators offices and asked them to co-sponsor. I've also called my Congressman's office and suggested he bring it over to the House side. I also called Senators Snowe and Brown's offices to thank them for introducing it. Hopefully many thousands of truckers will call their own Senators and urge passage.

 

[ratwell71]

Just emailed all three of my representatives in Missouri. Thanks again for this wonderful post.

OOIDA is doing great things!

 

[RLENT]

Interesting ....

Another aspect to it could potentially be this: if brokers and carriers are indeed reaping huge profits from FSC, do you think that they will willingly give up that revenue ?

Could that loss of revenue cause a general increase in rates - in order to make up for the loss ?

BTW, there is a hearing in the House Energy Independence committee or subcommittee being televised right now on CSPAN 2 on "Rising Oil Prices and the Strategic Petroleum Reserve" ..... there's a Swift VP testifying on the current panel - lotsa talk about the "trucking industry" ......

 

[ratwell71]

There is no revenue lost because it was not their revenue to begin with. They have no fuel expense the O/O does.

 

[ratwell71]

Interesting ....

Another aspect to it could potentially be this: if brokers and carriers are indeed reaping huge profits from FSC, do you think that they will willingly give up that revenue ?

Could that loss of revenue cause a general increase in rates - in order to make up for the loss ?

BTW, there is a hearing in the House Energy Independence committee or subcommittee being televised right now on CSPAN 2 on "Rising Oil Prices and the Strategic Petroleum Reserve" ..... there's a Swift VP testifying on the current panel - lotsa talk about the "trucking industry" ......

If they increase their rates, hooray, because this benefits you if you get a percentage. These companies have been benefiting by getting a percentage of the FSC because they have been lowering their freight charges to the customer which only hurts you not them.

In essence, they lower their tariffs to the customer about the same percentage as the fuel surcharge that they have been taking from you. You help them, they are not helping you. They pass on a cheaper freight charge because they are getting a percentage of the FSC. Take this away and they will have to charge a fair tariff which puts more money in your pocket along with a 100 percent of the FSC. That's more money not less.

 

[nightcreacher]

If they increase their rates, hooray, because this benefits you if you get a percentage. These companies have been benefiting by getting a percentage of the FSC because they have been lowering their freight charges to the customer which only hurts you not them.

In essence, they lower their tariffs to the customer about the same percentage as the fuel surcharge that they have been taking from you. You help them, they are not helping you. They pass on a cheaper freight charge because they are getting a percentage of the FSC. Take this away and they will have to charge a fair tariff which puts more money in your pocket along with a 100 percent of the FSC. That's more money not less.

ok,for us on percentage,a raise of rate and a lower surcharge,is lowering our pay,for flat rate trucks,you will also see a loss of revenue,as surcharge willl be less.i know a company right now that had a drivers meeting just about that,raise rates lower surcharge,all 40 drivers told them they would quit,so if rates are raised,sucharge needs to be left alone.

 

[davekc]

Most of this is what the market can take. Several brokers are saying that the FSC will stay intact and passed to the operator. The bad news is they will drop the rate so the customer is paying the same. For the brokers keeping part of the FSC, they will instead sheer part of the rate.
Since it can't be policed, I don't think we as the end users will see any change.
Unless it is mandatory for a full disclosure of what the customer was charged at the beginning, I don't see this doing that much.
The only place I would possibly expect a change would be companies doing a flat rate FSC. How would you know your really getting 100 percent? Or, the companies that keep a large percentage of it now. I believe the Fed keeps 38 percent of it now from its contractors. They do pass 100 percent to the brokers.
If they are enforced to pass 100 percent, they might price themselves out of the market, or they will have to adjust their tariffs.

 

[ericmoss37]

Fuel surcharges actually do a good job at covering the fuel. I think lower volume of shipments is what is hurting the expediting freight industry. What I find is it is harder to find the milage these days. My solo driver came within a 100 miles of my team. They finished at 1517 for the solo and 1601 for the team if they do not get a load for Sat. The 1517 is a pro that is delivering 8am tomarrow. Given the time 7 pm on Friday night I don't see my team getting another load before I close out the week. Don't get me wrong the fuel hurts because it cost more to empty move and run the engine on cold and hot day. Lower fuel price certainly will help.

 

[pjjjjj]

Fuel surcharges actually do a good job at covering the fuel.

My solo driver came within a 100 miles of my team. They finished at 1517 for the solo and 1601 for the team if they do not get a load for Sat. The 1517 is a pro that is delivering 8am tomarrow.

Congrats Eric on doing that well with your carrier, just a short time ago, you seemed a bit concerned
The fuel surchages WOULD do a good job of covering the fuel IF we all received 100% of them.
Who is your carrier again?

 

[ericmoss37]

Hi PJ. I would say I am doing better. I finally got a team into one of my trucks. I took a beating the first month because I had a guy go through orientation and quit. By the time I got another body in that truck the thing broke down on it's first load with my company. I am trying to recover the loss right now which is a slow process. I am contracting with Panther. My only complaint is the extra fees that pass through to the owner. I don't mind paying for the quallcom, but the $35 dollar messaging fee a week is to much. Plus it cost $160 dollars for each person that goes through the class so that added up to $480 more then what normally would be taken out of settlement. My first driver was not experienced and he cost me lots of extra fuel. This week has been my best week so far and I hope it continues through the summer.

 

[ATeam]

The bill number is S2910, The TRUCC Act. Here is a link to the Land Line article about it.

 

[RLENT]

There is no revenue lost because it was not their revenue to begin with. They have no fuel expense the O/O does.

Ahhh .... yeah ....

Sorry Rat - I think you are engaging a philosophical argument of some sort - one that doesn't have anything to do with the real world.

If they (carriers and brokers) are collecting a portion of the FSC and then they aren't allowed to do so anymore, and their revenues decline as a result of that, how ya figure that "there is no revenue lost" ?

As to your follow on post to the above - uhhh, yeah - I get it - no explanation required.

 

[pjjjjj]

I'm wondering if, in the case of carriers who take a percentage of the fsc, those carriers will be viewed as the ones who actually buy the fuel, if the company's fuel card is used;

Davekc is right, this doesn't sound like it could ever be policed, too many variables..

Seeing as how there is concern about government interference as it is, would this be a good thing?

Also wondering if the govt will end up regulating what can be charged in the way of fsc, since the amount seems to be up for negotiation, and since those reaping the benefit of the fsc unfairly, will be sure to find a way to change things around for themselves so there is no lost revenue on their end.

It's too bad carriers, brokers, everyone involved can't be fair, honest and ethical in the first place, without being forced by the law.

 

[Crazynuff]

I'm wondering if, in the case of carriers who take a percentage of the fsc, those carriers will be viewed as the ones who actually buy the fuel, if the company's fuel card is used;

Davekc is right, this doesn't sound like it could ever be policed, too many variables..

Seeing as how there is concern about government interference as it is, would this be a good thing?

Also wondering if the govt will end up regulating what can be charged in the way of fsc, since the amount seems to be up for negotiation, and since those reaping the benefit of the fsc unfairly, will be sure to find a way to change things around for themselves so there is no lost revenue on their end.

It's too bad carriers, brokers, everyone involved can't be fair, honest and ethical in the first place, without being forced by the law.

There are charts and methods given to help determine what the FSC for your truck should be Right now the FSC should be in excess of $.40 a mile for class 8 trucks . If a broker or carrier pays less than that you need to look elsewhere for loads .

 

[ratwell71]

Ahhh .... yeah ....

Sorry Rat - I think you are engaging a philosophical argument of some sort - one that doesn't have anything to do with the real world.

If they (carriers and brokers) are collecting a portion of the FSC and then they aren't allowed to do so anymore, and their revenues decline as a result of that, how ya figure that "there is no revenue lost" ?

As to your follow on post to the above - uhhh, yeah - I get it - no explanation required.

If they give the O/O the 100 percent FSC and "stop lowering their tariffs" then the FSC will help cover part of the cost of fuel. My company has been charging a FSC but they have "lowered their tariffs" which means charging their customer a FSC does absolutely nothing for me just them. It is a wash. What's the point, right?

If I see that they lowered their tariff after charging a fuel surcharge I call them on it. This goes against what the FSC was put in place for. It was put in place to help us cover fuel cost. As I said before if you get a 100 percent of the FSC and your company does not practice lowering their tariffs then this is a benefit to you, however, if your company is deceptive as mine has been then you have a choice to turn down the load with that as the excuse or simply find an honest company to work for. Right?

The FSC should be 100 percent the O/O's not the company's. These companies that are practicing lowering their tariffs when charging a FSC are only pulling the wool over the uneducated and inexperienced eyes not those of that have been in the business for years.

 

[Scuba]

If your carrier cuts your rate but increases the fsc and you stay then your an idiot plain and simple most of Panther loads are paying the nat adv or more those paying more wont start paying less because they already could pay less. and if you take a backhaul for 60cents per mile because the fsc is 57 cents then your a fool you are making less than a company driver who has zero risk