The Motor Carrier Fuel Cost Equity Act of 2001 is fundamentally the same bill that passed the house by voice vote in October of 2000. Its purpose is to help motor carriers and independent owner-operators recover their increased fuel costs when the price of diesel fuel rises. It does this without any cost to the federal government.

Fuel surcharges are a long established and accepted method for motor carriers to recover high fuel costs. Most motor carriers and truckers, however, are mom and pop businesses and do not have the market power of the big carriers to demand that shippers pay a fuel surcharge. To stay in business when fuel prices go up, they must dig into their pockets to subsidize the cost of the service they provide. Many truckers deplete their savings, obtain second mortgages on their homes, and sell their excess equipment trying to stay in business until fuel prices come back down.

In the last 18 months, diesel prices, rose more than $0.50 per gallon over their 1999 levels (less than $1.00 per gallon). This price increase has devastated the small business truckers who could not pass on their increased fuel costs to their customers. According to an analyst with A.G. Edwards, almost 200,000 trucks have been repossessed since the beginning of 2000. These trucks represent the business failures of thousands of small motor carriers and tens of thousands of independent owner-operators.

Small business truckers make up eighty percent of the motor carrier industry and are the backbone of our country's transportation system. By providing for a fuel surcharge, this legislation will help hundreds of thousands of truckers survive in business and prevent many from losing everything they have saved to maintain their businesses and support their families. This bill will also help preserve the healthy competition that has brought many years of inexpensive shipping to business and consumers.

HIGHLIGHTS OF H.R. 2161
THE MOTOR CARRIER FUEL COST EQUITY ACT OF 2001:

· Motor carriers, brokers, and freight forwarders providing truckload transportation services are required to impose a fuel surcharge on their customers when the national diesel fuel price rises above $1.15 per gallon.

· The size of the fuel surcharge is required to be the amount necessary to compensate the payer of fuel for the amount of increase in the price of fuel.

· The fuel surcharge must be itemized on the freight bill or invoice to trucking customers.

· Customers are required to pay the fuel surcharge.

· The federal government would have no regulatory or enforcement authority pertaining to this bill. The bill would be enforced solely by the parties themselves through private action.

· If a third party (motor carrier or owner-operator) provides the trucking service and pays for the necessary fuel, the fuel surcharge would be passed on to that party.

· The regular compensation of any third party provider of trucking services (motor carriers or owner-operators) cannot be reduced for the purpose of effectively avoiding the payment of the fuel surcharge.

· Nothing in the bill would take the place of any fuel surcharge agreement that already exists. (Customers who already pay a fuel surcharge would not be affected.)

· Nothing in the bill would prevent private parties in the future from establishing a fuel surcharge agreement that is different from the one recommended by the bill.

Prepared by Paul Cullen, Jr., The Cullen Law Firm, P.L.L.C., (202) 944-8600. (6/19/01)