[Congressional Record Volume 148, Number 9 (Thursday, February 7, 2002)]
[Senate]
[Page S489]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself and Mr. Bond):
  S. 1914. A bill to amend title 49, United States Code, to provide a 
mandatory fuel surcharge for transportation provided by certain motor 
carriers, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.
  Mr. KERRY. Mr. President, today I am pleased to introduce the Motor 
Carrier Fuel Cost Equity Act, which is much-needed legislation. My bill 
is designed to improve the ability of independent truck drivers to 
recoup losses from high fuel costs by requiring that motor carriers 
charge a fuel surcharge when the price of diesel fuel rises above $1.15 
and pass-through this surcharge to the payer of the fuel costs. My bill 
will level the playing field for small operators, which comprise nearly 
80 percent of the motor carrier industry, without any cost or 
regulatory requirement for the Federal Government.
  There are approximately 350,000 independent truck drivers, known as 
owner-operators, who haul freight either on a per-load contractual 
basis or by leasing their truck and driving services to a motor 
carrier, freight forwarder or other shipping broker. Owner-operators 
essentially are independent contractors. Sometimes they provide their 
services directly to a shipper, but more often owner-operators contract 
out their services to a motor carrier company which negotiates its own 
contract with a shipper and then pays the owner-operator to provide the 
transport service.
  Fuel surcharges are a long-established method of permitting motor 
carriers, airlines and even taxis to recover high fuel costs. But 
because of intense competition in the industry, owner-operators have 
little ability to negotiate terms of transport with a motor carrier, 
and in virtually no circumstance are they able to pass along the 
increased costs of fuel to the shipper. The inability of independent 
truck drivers to pass along the higher fuel costs of the last two years 
has resulted in the bankruptcy of 7,000 trucking companies, nearly all 
small businesses, and the repossession of nearly 200,000 trucks.
  I'd like to make clear a couple of additional points about the 
legislation: First, the bill would not affect less-than-truckload 
carriers, such as package delivery services. Many of these services are 
already imposing surcharges and they don't face the same unique 
situation that confronts the independent trucker. Second, my bill 
allows the parties to set their own surcharge formulas, but the 
surcharge must be sufficient to fully compensate the person who pays 
for the fuel. That's only fair, but it allows the motor carriers and 
truckers the greatest degree of flexibility in negotiating the terms of 
transport.
  While national diesel fuel costs have recently fallen below the $1.15 
threshold, we know well that fuel costs can increase suddenly. 
America's independent truckers, which form the backbone of truck 
transportation in this country, deserve the ability to protect 
themselves during these periods of high diesel fuel prices.
  I am proud to be joined by Senator Bond in introducing this bill 
today. I am also pleased that Congressman Rahall has introduced similar 
legislation on the House side. He has worked hard on this bill for 
several years now, and I look forward to working closely with him as we 
move forward on this legislation.
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