[Federal Register Volume 66, Number 43 (Monday, March 5, 2001)]
[Notices]
[Pages 13307-13308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5241]


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DEPARTMENT OF DEFENSE

Department of the Army


Fuel-Related Rate Adjustment

AGENCY: Military Traffic Management Command (MTMC), DoD.

ACTION: Notice.

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SUMMARY: The Military Traffic Management Command, as the Program 
Director for the Department of Defense (DoD), announces an adjustment 
to the current Fuel-Related Rate requirements for qualified carriers. 
This action is a result of joint MTMC Industry Fuel Board which 
included industry representatives. The change will be implemented to 
assist transportation industry and carriers on diesel fuel cost 
increases. Further details covering the policy and requirements are 
contained in the SUPPLEMENTARY INFORMATION paragraph indicated below.

DATES: The change will become effective on April 1, 2001.

FOR FURTHER INFORMATION CONTACT: Ruth Tetreault, Headquarters, Military 
Traffic Management Command, ATTN: MTDAC, Room 11S31, Hoffman Building 
II, 200 Stovall St., Alexandria, VA 22332-5000; Telephone (703) 428-
2462; Telefax (703) 428-3351.

SUPPLEMENTARY INFORMATION:

Background

    MTMC developed and implemented an automatic fuel surcharge that 
goes into effect on April 1, 2001. Carriers will be entitled to an 
automatic increase when the national average price of diesel fuel rises 
above $1.30 a gallon as reported by the Department of Energy, Energy 
Information Administration. Diesel fuel prices are segregated into 10-
cent increments, for which there is a 1% addition for each time the 
threshold is crossed. In the past, carriers incurring high diesel costs 
faced long delays in receiving surcharges. MTMC has mad surcharges 
automatic for carriers by linking them directly to the price of diesel 
fuel. The new automatic fuel surcharge is a result of a joint MTMC-
Industry Fuel Board which included industry representatives. The policy 
ensures fair compensation for our industry partners when the price of 
fuel rises.
    Effective April 1, 2001, MTMC Policy No. TR-12 (Fuel-Related Rate 
Adjustment Policy) replaces MTMC 1-7, C-1, Policy No. 55-4 (Fuel 
Related Carrier Rate Changes) as follows:

[[Page 13308]]

Transportation and Travel

Policy No. TR-12

Subject: Fuel-Related Rate Adjustment Policy
    a. Policy: Written provision will be made in Military Traffic 
Management Command (MTMC) regulations and solicited tender agreements 
for fuel related rate adjustments. The following Fuel-Related Rate 
Adjustment policy provides the transportation industry, including 
individual carriers, economic adjustment and reasonable relief from 
increases in diesel fuel prices. Carriers are urged to consider changes 
in fuel prices when submitting or supplementing rates during rate 
filing and/or bid submission periods. See Sections I and J for specific 
program applications and exceptions.
    b. Issue Date: The issue date is January 2, 2001.
    c. Effective Date: The effective date is April 1, 2001.
    d. Expiration Date: The expiration date is April 1, 2002 and is 
subject to reauthorization on an annual basis at the sole discretion of 
HQ MTMC. The MTMC Fuel Board will periodically meet to consider changes 
and modifications to this policy.
    e. Application: The policy will apply to MTMC Personal Property and 
Domestic Freight Programs.
    f. Policy and Guidance: 1. Application: Applicability of the Fuel-
Related Adjustment is based on guidance contained in the solicitation 
or other procurement request for transportation services. Application 
of a Fuel-Related Rate Adjustment will be determined the first Monday 
of the month and based on the National Average diesel fuel price as 
determined by the Department of Energy, Energy Information 
Administration (EIA). If the first Monday is a holiday the fuel price 
will be determined based on the price on the next business day.
    2. Determination of Adjustment: (a) Only the National Average 
diesel fuel price as published by the DOE, EIA on the first Monday of 
the month (or the first working day after a Monday if the Monday falls 
on a Federal Holiday) may be used as a basis for determining the 
applicability of a Fuel-Related Rate Adjustment. The fuel adjustment 
will automatically apply to shipments picked up on or after the 15th 
day of the month through the 14th day of the following month. The 
diesel fuel prices published by the EIA may be found via the following 
sources:
    (1) EIA Web site: http://www.eia.doe.gov/.
    (2) EIA Weekly Petroleum Status Report.
    (3) EIA Hotline: (202) 586-6966.
    (b) It is the responsibility of the carrier to monitor diesel fuel 
prices via one of the sources identified above. The National Average 
diesel fuel price determined by the DOE, EIA on the first Monday of the 
month will serve as the basis for determining the entitlement to a 
Fuel-Related Adjustment, until the first Monday of the following month 
when the National Average diesel fuel price is published. The National 
Average fuel price and the actual pickup date of the shipment will 
determine if there is an entitlement to an adjustment and the amount of 
the adjustment. An adjustment is not applicable to any portion of 
transportation in which a surcharge or any other additional payment for 
fuel is already in existence. For example, portions of transportation 
to which the Bunker Fuel Surcharge is applicable.
    3. Amount of Adjustment: a. The table below will be used to 
determine the fuel related adjustment factor. No fuel adjustment will 
be granted when prices are within the neutral range (``0''). When the 
DOE, EIA fuel price exceeds the neutral range amount, the carrier will 
be entitled to the specific fuel rate adjustment percentage based on 
the applicable fuel cost per gallon as indicated in the table. The 
increase applies to line haul transportation charges only unless 
otherwise identified in the solicitation. The following rates 
adjustments are provided in the following table:

                                  Table
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                                                                 Rate
                 Cost per gallon (in cents)                   adjustment
                                                              (percent)
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130.0 and below............................................            0
130.1-140.0................................................            1
140.1-150.0................................................            2
150.1-160.0................................................            3
160.1-170.0................................................            4
170.1-180.0................................................            5
180.1-190.0................................................            6
190.1-200.0................................................            7
200.1-210.0................................................            8
210.1-220.0................................................            9
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    b. For example, if the reported DOE, EIA National Average diesel 
fuel price is $1.52 the carrier would be entitled to a fuel-related 
surcharge of 3% for shipments picked up on or after the 15th of the 
month. For each 10 cents per gallon above 220.0 add 1%.
    4. Readjustments: The surcharge is automatically recalculated 
monthly and adjusted upward or downward depending on the DOE EIA 
National Average price on the 1st Monday of the month. In no case will 
the adjustment lower the original price offered in the carriers' 
initial filing or response to a solicitation.
    g. Billing Procedures: Carriers will clearly show fuel price 
adjustments on all paper and electronic commercial freight bills and 
Government Bills of Lading and invoices. The amount of any diesel fuel 
rate surcharge must be shown as a separate item on the carriers' 
invoice.
    h. The policy supersedes Policy No. 55-4 Fuel Related Carrier Rate 
Changes.
    i. Personal Property Program: Specific program applications and 
exceptions are listed below:
    1. Applications: (CONUS segment, including Alaska and Hawaii).
    (a) Line haul portion of domestic interstate and intrastate 
movements.
    (b) Domestic line haul portion of international personal property 
movements.
    (c) Transportation charges applicable on domestic and international 
storage-in-transit shipments when such shipments are delivered or 
removed from the domestic storage-in-transit warehouse.
    2. Exceptions: None.
    j. Domestic Freight Program: Specific program applications are 
listed below:
    1. Applications: a. Applies only to the domestic line haul portion 
of the carrier rate.
    2. Exceptions: None.
(end of change)

Regulatory Flexibility Act

    The change is not considered rule making within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601-612.

Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3051 et seq., does not apply 
because no information collection requirement or recordkeeping 
responsibilities are imposed on offerors, contractors, or members of 
the public.

Francis A. Galluzzo,
Director, Distribution Analysis Center.
[FR Doc. 01-5241 Filed 3-2-01; 8:45 am]
BILLING CODE 3710-08-P