[Congressional Record Volume 146, Number 58 (Thursday, May 11, 2000)]
[Extensions of Remarks]
[Page E706]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF MOTOR CARRIER FUEL COST EQUITY ACT OF 2000

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                         HON. NICK J. RAHALL II

                            of west virginia

                    in the house of representatives

                         Thursday, May 11, 2000

  Mr. RAHALL. Mr. Speaker, today I am introducing legislation to 
address a crisis which threatens to severely reduce competition in the 
trucking industry.
  To the hundreds of independent truckers who in an orderly and proper 
fashion came to their Nation's capitol earlier this year, let me say, 
we heard you. This gentleman from West Virginia, at least, heard what 
you had to say.
  Everyone is concerned over the effect high fuel costs are having on 
our economy. But in particular, high diesel fuel prices are hitting the 
independent small trucker the hardest. These individuals, who own and 
operate their own rigs, are faced with financial ruin. Simply put, they 
cannot afford sharp increases in diesel fuel prices and they are not in 
the position to pass these increased costs on to shippers. The result 
is that many are going out of business and an important segment of the 
trucking industry is being lost.
  What does this mean? Aside from the very real and pressing personal 
hardships these independent truckers and their families face, we are 
also losing competition in the trucking industry. Many shippers are 
concerned over consolidations in the railroad industry. Situations 
where due to the lack of competition, they believe they are held 
hostage to a single railroad. These shippers could face a similar 
situation in trucking as the owner-operators succumb to rising fuel 
costs, thinning the ranks of trucking alternatives.
  Indeed, last month in testimony before the Resources Committee the 
head of the American Trucking Associations, Walter McCormick, noted: 
``If we start to see bottlenecks, shippers who today object to a fuel 
surcharge will have to scramble to get their freight delivered at any 
cost. It's easy to see where that leads: Consumer prices rise and 
inflation snuffs out our country's economic expansion.''
  This statement echoes what the president of the Owner-Operator 
Independent Drivers Association, James Johnston, said before the 
Committee on Transportation and Infrastructure on March 21st: ``If we 
don't fix this problem soon, and truckers continue to lose their 
businesses or refuse to drive unprofitably, we are going to see greater 
disruptions in our economy as goods do not get to market and just-in-
time deliveries to manufacturers cease to arrive `just-in-time.' ''
  To address this situation, we are introducing the ``Motor Carrier 
Fuel Cost Equity Act of 2000.'' This legislation would require that a 
mandatory fuel surcharge be put into place for truckload carriers, and 
that the surcharge actually be passed through to the motor carrier, or 
as the case may be, the broker or freight forwarder, who is providing 
the transportation service in situations where diesel fuel prices are 
the subject of sudden and exorbitant increases. Further, the bill 
provides that if existing transportation contracts or agreements 
already contain fuel surcharges, nothing in the legislation would 
affect those arrangements.
  To be sure, this is not unique response to fuel crises. There are 
situations where existing contracts between shippers and motor carriers 
contains fuel surcharges. Further, in response to past fuel crises, the 
Interstate Commerce Commission first mandated them during the 1970s. 
However, once the filed rate doctrine was abolished, federal authority 
in this matter lapsed.
  The question could be asked, why now mandate a fuel surcharge if some 
transportation contracts already provide for them. The answer lies in 
the type of environment in which independent truckers operate. In those 
instances where they are under lease to a motor carrier to provide the 
transportation service, there is no guarantee that a surcharge will be 
passed on to them. The transportation contract is between the motor 
carrier and the shipper, and the owner-operator has no role in the 
types of rates charged.
  In addition, where the independent trucker has his or her own 
operating authority and deals directly with shippers, they usually do 
not have the leverage to obtain a fuel surcharge from them. In effect, 
the independent trucker, being a small businessman, is put in a 
position of either having to accept the offered rate or losing the 
business.
  Mr. Speaker, I believe this legislation represents a fair and 
reasonable approach to addressing this situation. It does not solve the 
fuel crisis, but it would bring relief to an important sector of the 
transportation industry.

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