Bill mandating 100% FSC passthrough introduced
 

http://www.landlinemag.com/Special_R..._surcharge.htm

SPECIAL REPORT: Bill seeks to end fuel surcharge skimming

Thursday, April 24, 2008 – Middlemen in the trucking industry who have been living high on the hog by pocketing fuel surcharges off freight rates may very well find their days numbered thanks to new legislation.

A bill introduced by Sen. Olympia Snowe, R-ME, and co-sponsored by Sen. Sherrod Brown, D-OH, seeks to mandate 100 percent pass-through of fuel surcharges to whoever actually buys the fuel.

The Owner-Operator Independent Drivers Association commended both Snowe and Brown for their leadership in introducing the legislation, which is likely to be called the “Truthful Reliable Understanding of Consumer Costs Act” or “TRUCC Act.”

“This bill will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel,” said Todd Spencer, OOIDA executive vice president. “Senators Snowe and Brown should be commended for their leadership on this matter.”

Fuel surcharges have been a staple in the industry as a way that trucking companies can recoup the high cost of fuel. And now with skyrocketing fuel prices, more and more is being collected – but not passed on.

There is currently not a uniform fuel surcharge standard for the trucking industry. Fuel surcharges must be negotiated individually, leaving shippers and truckers vulnerable to opportunistic middlemen.

“It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges to the truckers who are actually hauling the freight and paying the fuel bill,” Spencer said.

To make matters worse, small-business truckers are often denied access to the contracts and rate information negotiated between freight brokers and the shipper or customer they are hauling freight for.

The TRUCC Act also looks to ensure that brokers and middlemen negotiating a contract to haul freight for a shipper are not using the high price of fuel to exploit that shipper or the small-business trucker who actually hauls the shipper’s freight.

A bill number was not immediately available, but truckers wanting to express their support of the TRUCC Act should contact their senators. Those who don’t know who their senators are can call the Capitol Switchboard at (202) 224-3121 and provide their ZIP code to the operator to be connected to the appropriate office.

This bill will be tabled and never see the light of day.

5 Bucks it dont 8)

Is there an organization or person in place now to verify how much these "middlemen" are being paid for the FSC? If not, how can O/O be sure that they are getting all of the FSC even if the legislation is passed?

Gotta agree with BD. The likelyhood of this bill seeing any sort of action is slim to none.

Apparently there already is full disclosure legislation. If you want to see how much the shipper pays, the broker is obliged to show you.

I hope I am wrong, but this is just the same dance sung to a different tune....

Even still I would venture to guess, by the way the ppl here talk about brokers, they would probably either not show/tell you or show you a document with false info.

I like that there are ppl thinking of us and trying to put forth legislation that would help us but it's too bad there is probably no way to regulate and enforce such legislation.

Here's a novel concept:

Ask the shipper how much they're paying.

Touche :lol:

There was legislation that some attempted to pass about a year or so ago concerning the fsc. It didn't pass. Even if it had passed, there was no teeth in the enforcement. If the owner operator or carrier wanted to pursue enforcement it was basically up to them to do so through the courts at their expense. I don't think it would have made any difference to the industry had it passed. Basically, it was feel good legislation. Unless this bill has some enforcement teeth in it, I don't see that it will benefit the majority of owners. Unless there are real consequences to this type of legislation, they might as well save their time and paper. There are a lot of people who would prefer that this type of legislation not pass. You see, most of the major carriers have their own brokerage departments. If this type of legislation passed, they would need to pass through a lot of extra cash. :P

I believe it was part of the transportation bill GMAN.

Thanks, Alan.

Just a thought...

Did any of those that immediately chimed in to complain that TRUCC will never get anywhere make a call yet to tell your congressman or congresswoman that you support it?

Hmmm... If not it is sorta like bitching about farmers and high food prices with your mouth full isn't it?

Let's get on the phone people and at least do our part eh????? I say a little less talk and a lot more action is what this country needs.

Longsnowsm

The problems are:

1) In the future, brokers will not negotiate fuel surcharges

2) How do we know what the actual amount is?

3) When will it stop? This may be only "step 1" into a slide back into regulation.

The problem is if someone needs a bill like this just to survive, they should be out of business anyways.

IMO, knowledge is a good thing. Everyone should know what the FSC is.

True that. If the broker is required to pass on money that has a special name (like FSC), then the broker will simply not negotiate the FSC into the rate (or negotiate some crap amount) and raise the standard rate by that specific amount.

Yet another reason why the overall rate is more important than some part of the rate with a certain designation.

The real problem is that there are too many owner operators and carriers who are hauling freight for less than it costs them to operate and have a fair profit. Personally, I don't think we really need a fuel surcharge. We need higher rates. In my case, I don't look at the fuel charge that much but the total rate. If the entire rate meets my needs then I take the load. If not, I pass and go on to something else. The fsc has become a shell game. There are some brokers who are profiting from the extra charges. Carriers and owner operators need to gain the intestinal fortitude to demand a higher rate from brokers and/or shippers. The fsc is a way to put the burden of demanding a higher rate on a 3rd party, the oil companies, rather than simply raising their rates.

I am not sure that we really want the government to once again regulate our freight rates. Capitalism works. Socialism doesn't. Regulated rates are simply price fixing or socialism. Everyone doesn't provide the same level of service. Those who do go the extra mile deserve and can command a higher rate than those who provide mediocre service. The marginal or weak owner operators and carriers will not survive. Become proactive. NEVER take a cheap load to get to a better area.

Try to explain that logic to the so-called " O/O's " who are seeking welfare from the government.......

Thats almost as sad as soldiers getting welfare :sad:

The real problem is that there are too many owner operators and carriers who are hauling freight for less than it costs them to operate and have a fair profit.



EXACTLY. The best regulation for brokers is the carriers themselves. Plenty of loads with better rates out there yet I still see idiots moving loads for 1.00 a mile because it is destined for CA. :roll:

When a broker approaches a shipper attempting to land their business, who do you think has the upper hand? Most brokers would prefer to negotiate a flat rate with shippers. The FSC is more often than not required by the shipper as a way to protect them against volatile fuel prices. The shipper often demands an adjusting portion of the rate in case fuel prices drop. (Historically, diesel prices are highest in the winter when annual shipping contracts are often negotiated.) You can't just have some arbitrary adjustment, it has to be pegged to something. I don't understand why people don't see that the FSC protects shippers just as much as it protects carriers.