Home » Carriers - Shippers » Fuel surcharge pass-through is approved

Congress approves fuel
surcharge pass-through

Oct 6, 2008 10:03 AM

The United States Congress enacted a fuel surcharge pass-through provision in the Department of Defense Authorization Bill recently, and the legislation is expected to be signed into law by President Bush.

The language, sponsored by Rep. Peter DeFazio (D-OR) in a manager’s amendment during a DoD mark-up, was significantly watered down from its original offering.

"While we believe the legislation was not necessary, the outcome of the DoD legislation represents a significant accomplishment for TIA (the Transportation Intermediaries Association). Three months ago, we were faced with the prospect of having the industry re-regulated by the Trust in Reliable Understanding of Consumer Costs (TRUCC) Act", said TIA President and Chief Executive Officer Robert Voltmann. "Thanks to the concerted efforts of our members, coalition partners, and staff, we overcame significant obstacles and limited the language to the watered-down version that we see today. I am particularly proud of our membership and how they engaged Congress."

Congress made several significant changes to the bill, including the elimination of the proposed reporting requirement on every shipment, since DoD already posts the amount of its fuel surcharge on its website. By eliminating this shipment-by-shipment reporting requirement, Congress rejected the attempt to reintroduce a tariff regime in the motor carrier industry. Also, the legislation is not self-implementing, meaning that it relies on DoD to create provisions "to the maximum extent practicable" to pass through the fuel surcharge payment from DoD to the ultimate purchaser of the fuel. Furthermore, the legislation rejected attempts by the sponsors to create a private right-of-action, thereby reducing the threat of class-action lawsuits against carriers, brokers, forwarders, and shippers.