Wednesday, May 7, 2008 – The days of middlemen using fuel surcharges as a way to beef up their profits may very well be numbered thanks to bipartisan legislation being considered in both chambers of Congress.

A bill introduced May 6 by Rep. Peter DeFazio, D-OR, and co-sponsored by Rep. Thomas Petri, R-WI, and Rep. Brad Ellsworth, D-IN, seeks to mandate 100 percent pass-through of fuel surcharges to whoever actually buys the fuel.

The bill, HR5977, “Truth in Reliable Understanding of Consumer Costs Act,” or the “TRUCC Act,” is identical to a bill introduced in the Senate in late April by Sen. Olympia Snowe, R-ME, and co-sponsored by Sen. Sherrod Brown, D-OH.

“This bill will go a long way toward helping truckers and their shipping customers weather the brutal cost of fuel,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

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 currently is 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 seeks 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.

OOIDA issued a national Call to Action on Wednesday, May 7, urging its members to contact their lawmakers in support of the legislation. To read the Call to Action, click here.

Truckers wanting to express their support of the TRUCC Act should call both of their senators and their representative. Those who don’t know who their lawmakers 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.

However, the Owner-Operator Independent Drivers Association had its legal team go to bat for the truckers, and the companies have proposed paying $1.25 million of the balance due. Under the original plan filed with the U.S. Bankruptcy Court the carriers wanted the entire $5 million balance wiped clean.

Lawyers from The Cullen Law Firm in Washington, DC, argued that it would be in the best interests of the reorganized companies to ensure that their owner-operators received as much compensation as possible.

The court must still approve the revised bankruptcy plan, and the timing of payments will be determined at a future date.

Originally filed in May of 2004, the truckers’ case alleged that the carriers’ leases failed to comply with federal truth-in-leasing regulations regarding compensation and chargeback disclosures. As part of the case settlement, Allied and North American were also required to implement a new uniform independent contractor operating agreement.

A 2-foot-by-3-foot hole on an Interstate-30 bridge in downtown Dallas caused delays during Monday’s early morning commute.

A motorist reported the hole at about 10 p.m. Sunday. KXAS-TV reported that chunks of concrete from the hole damaged several cars, bending the rims of wheels. The hole was repaired and lanes were opened shortly before 7 a.m. Monday.

TxDOT spokesman Randy Black told The Dallas Morning News that the bridge had been inspected within the past 30 days. “Results were normal,” he said.

Courtesy of LandLine Magazine

The national average price for diesel dropped slightly this past week – 2.8 cents – to average $4.149 a gallon, the U.S. Energy Information Administration reported Monday, May 5. However, the average price for diesel is still up $1.357 compared with the same week of 2007.

Eight of the nine EIA regions reported slight decreases in the cost of diesel, except the Rocky Mountain region, which reported an increase of 1.6 cents a gallon to average $4.159.

The Lower Atlantic region experienced the greatest decrease of 3.6 cents to an average of $4.133 this past week. The East Coast region’s average dropped 3.2 cents to $4.218, while the Central Atlantic region reports a decrease of 3 cents a gallon to average $4.351.

Even with the decrease in the price of fuel in the Central Atlantic region, the cost for a gallon of diesel is still the second-highest of all of the regions.

The Midwest and Gulf Coast regional averages decreased 2.8 cents a gallon, putting the average at $4.116 in the Midwest and at $4.088 a gallon in the Gulf Coast region.

The New England region is reporting a nine-tenths of a cent decrease to an average of $4.337 a gallon, while diesel prices have dropped a penny on the West Coast to put the weekly average at $4.313 a gallon.

Federal agents are investigating after they uncovered nearly $2 million worth of cocaine Tuesday in Van Buren County.

"The troopers who stopped it and the motor carrier officer — they were excited, no doubt about it," said Sgt. Rich Dragomer of the Michigan State Police.

Acting on information from another agency, state police and federal agents pulled over a Canadian semi-truck and another car along I-94.

They say they found 140 pounds of cocaine hidden in three duffel bags in the cab of the semi.

It's worth $1.8 million, but on the street police say it could go for even more.

Police say it's one of their largest busts on I-94, which they consider a major pipeline for drugs.

"That Detroit - Chicago connection is huge," commented Capt. Paul Toliver of the Berrien County Sheriff's Department.

Last year on I-94 in Berrien County alone, police seized $230,000 worth of marijuana in one car. They found $100,000 worth of cocaine in another car.

On one traffic stop they found almost $146,000 in a hidden compartment.

On another stop police found more than $240,000 hidden.

"The drugs will come into Chicago or Detroit and the money will flow the opposite way," said Toliver. "So, we'll see what we call mules running drugs in one direction and they'll run the money back."

The concern is it may stop along the way.

"Oh, it's a problem, yeah," Ted Johnson of Hartford told WSBT News.

And the latest bust is no surprise to many people who live near the busy highway.

"I think it's probably just the tip of the iceberg," said Johnson.

Police arrested the driver of the semi. He's in federal custody and his name has not yet been released.

As for handling this drug problem — police say they have officers who are trained in detecting drugs that work I-94.

The different agencies also work together.

In Berrien County, the sheriff's department also has two new narcotic dogs that are being trained right now. In about five weeks, police say they'll be out helping in the fight to stop the drug traffickers.

But police also say they know they may only be scratching the surface of this problem.

Truckers who normally take Interstate 40 through downtown Knoxville, TN, will be detoured onto I-640 and I-275 for the next 14 months. Highway crews shut down a section of I-40 on Thursday, May 1.

The closure and reconstruction of a 0.9-mile section of I-40 will include widening the stretch to six lanes; adding four auxiliary lanes; and building nine overpasses, new ramps and noise barriers.

The $275 million project is due to be complete by July 1 next year.

Courtesy of LandLine Magazine

Two bills in the New York Assembly would eliminate collection of a tax applied to truck drivers and reduce the state’s fuel tax in certain areas.

Assemblyman William Magnarelli, D-Syracuse, introduced one measure that would rid the state of administering the truck mileage tax – also known as the ton-mile tax.

The ton-mile tax is based on the specific weight of trucks. It is intended to offset wear and tear on roads by charging fees for miles traveled in the state.

The nearly 60-year old levy is applied to vehicles with maximum gross weights exceeding 18,000 pounds operating in the state. New York doesn’t charge truckers the ton-mile tax on miles traveled on toll roads.

Supporters of the bill point out that New York is the only state in the region to administer the tax. They say it is a barrier to competition with neighboring states.

Elimination of the tax would benefit truckers, manufacturers, shippers and consumers, they say.

Others say truckers already pay high user fees for road work. The fees include the state’s 36-cent-per-gallon diesel tax and registration fees.

The bill – A421 – is sitting in the Assembly Ways and Means Committee.

Another bill in the Ways and Means Committee would eliminate the motor fuel excise tax and petroleum business tax near Indian reservations. Sponsored by Assemblyman David Townsend Jr., R-Sylvan Beach, the measure – A3809 – would reduce the taxes on motor fuels by 20 cents per gallon in areas within a 20-mile radius of Indian reservations.

Statewide, about 1,000 retail fuel stations would be affected.

Advocates say the bill would allow retail stations to become competitive in their prices with fuels sold in neighboring Indian reservations. They say there typically is a 30-cent price difference.

Although the state would receive less direct tax revenue, increased sales for affected stores would do more to benefit the state in the long run, they say.

To view other legislative activities of interest for New York in 2008, click here.

In British Columbia, Canada, the Transportation Ministry is considering setting up a so-called truck jail similar to the one Ontario has had since 1998.

Trucks found to be grossly unsafe could be impounded for up to 30 days. A truck with “several brakes broken, in combination with bad tires, in combination with bad steering,” would be a suitable candidate for jail, Paul Landry, president of the British Columbia Trucking Association, told the Times Colonist newspaper.

Truck News reported that the province is also considering allowing wider use of so-called “Rocky Mountain doubles,” which proponents say can cut fuel consumption by 30 percent.

In other Canadian trucking news, the Atlantic Provinces Trucking Association in New Brunswick is calling for a provincial tax cut of at least 40 cents per gallon (10 cents Canadian per liter) on diesel fuel.

Diesel has been selling for around $5.60 per gallon ($1.40 Canadian per liter) in the province.

Tuesday, May 6, 2008 –If there were any members of the House Transportation and Infrastructure Committee who didn’t think fuel prices were strangling small-business truckers – they probably don’t have the same opinion following a hearing on the topic today.

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, told committee members in his testimony during the hearing that small-business truckers are victimized not only by high fuel costs, but also by questionable business tactics in the industry.

“The rising cost of fuel is causing harm to the trucking industry as we know it. Across this nation, small-business truckers are experiencing unprecedented operating cost increases and are being forced to make tough decisions in the name of saving their businesses and providing for their families,” Spencer told members of the committee.

“Unfortunately, the climbing diesel prices have already painted many truckers into a corner and for them it is too late.”

Spencer cited a recent report released by Donald Broughton, a long-time trucking industry analyst now with Avondale Partners LLC. Broughton reported that in the first quarter of this year, 935 companies with five or more trucks failed. That’s a failure rate the industry hasn’t experienced since 2000 and 2001.

“While this data is shocking, it is not the complete picture. Broughton’s data is not representative of the industry as a whole because it only counts trucking companies with five or more trucks,” Spencer told the committee.

Spencer explained to committee members that the blame for these failures cannot rest solely on the shoulders of high fuel prices. Fuel surcharges are a long-standing mechanism the industry has used to recoup fuel costs.

The problem, Spencer told the committee members, is that more and more middlemen are charging a fuel surcharge and pocketing a chunk of it rather than passing it on to the trucker who actually bought the fuel.

“It is common practice for motor carriers and especially brokers to push shippers for higher 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 told the committee.

When pressed by members of the committee, especially acting Chairman Rep. Peter DeFazio, D-OR, on how this can happen, Spencer pointed to the lack of transparency in trucking transactions.

“(Keeping a fuel surcharge is) often done by charging the shipper in one way … then withholding information or misrepresenting transactional information and compensating truckers in another manner, for example providing one flat rate, which is usually much lower,” Spencer explained.

Even if a trucker finds out a broker is skimming fuel surcharges, Spencer said that with the lack of regulation and oversight of brokers it’s far too easy for bad brokers to fade into the night.

“Every day at our headquarters in Missouri we hear horror stories from small-business truckers about unscrupulous brokers with FMCSA authority who collect money from shippers, but never pay the truckers who actually transport the loads,” he told committee members. “Often, when the truckers try to collect the money due to them, they find the broker has closed up shop and moved on.”

In the end, Spencer called for quality regulations and oversight of the industry to give truckers some relief.

“If we do not find ways to help them soon, small-business truckers will continue to lose their businesses or refuse to drive unprofitably. I have no doubt that we will see greater disruptions in the movement of our nation’s commerce and our economy,” he said.

Truck drivers seeking quick border crossings between the U.S. and Mexico through the Free and Secure Trade program can put away pens and fire up the Internet. FAST applications are exclusively online.

FAST aims to speed efficiency of goods movement at the U.S.-Mexico and Canadian border. Beginning April 15, FAST applications were accepted at CBP.gov.

The agency removed paper applications for the FAST program in April, a practice already in place for other global enrollment systems.

“It’s a way to do things faster; it facilitates the process,” said Joanne Ferreria, a Customs and Border Protection spokeswoman.

Customs and Border Protection plans to launch online enrollment for drivers needing access at the U.S.-Canada border in August. That program, however, will continue to accept paper applications.

The U.S.-Mexico FAST program is administered by U.S. officials, Ferreria said. U.S.-Canada FAST is run jointly between the United States and Canada.

“It’s a different kind of program than the U.S.-Mexico program,” she said.

FAST applications in 2008 for U.S.-Canada tallied 6,835 as of May 1, Ferreria said, while U.S.-Mexico applications stood at 874.

For more information, visit www.cbp.gov.

XM and Sirius have extended an agreement expressing their intention to merge while they continue to wait on the Federal Communications Commission to approve the proposal.

The boards of directors from XM Satellite Radio and Sirius Satellite Radio first voted in February 2007 to merge into one company worth $13 billion. The proposal required filing an application with the FCC, which has the final say.

When the XM-Sirius proposal did not appear on the FCC’s docket scheduled for May 14, the two companies decided to extend their intention to merge until an agreement is reached.

Approval from the FCC is all that stands in the way since the U.S. Department of Justice concluded in mid-March that a merger would not stand in the way of competition among broadcasting companies.

Courtesy of LandLine Magazine

Across the country, truckers have started grass-roots movements in several states to wake up their lawmakers to the harsh realities many drivers are facing – losing their livelihoods as high fuel prices and a rocky economy continue to beat up the industry.

In New York, owner-operators, company drivers and trucking company owners are all banding together and pounding the phones to get the message out to their lawmakers that they are running out of time.

On Wednesday, April 30, OOIDA member Paul Looman of Gloversville, NY, addressed the New York State Assembly about how high fuel prices and high tolls on the New York Thruway are depleting his and other truckers’ resources.

“I told them that high fuel prices and high toll prices that truckers are forced to pay on the Thruway are breaking the backs of truckers who are trying to make a living,” Looman told Land Line on Friday, May 2. “Farmers around here are hurting as well.”

Looman said speaking before the Assembly was a little “overwhelming,” but worth every minute if something good comes from it.

“They must have like what I had to say because they applauded when I was done,” he said.

He said another round of phone calls is planned for next week to keep the pressure on lawmakers in New York.

Looman said New York Assemblyman George Amedore, R-Rotterdam, and Assemblyman Peter Lopez, R-Schoharie, both have recognized truckers’ importance to the state’s economy, and are working with the truckers to get them some relief.

Amedore and Lopez also arranged a roundtable discussion with other lawmakers, truckers and businessmen on fuel issues on April 17 at a truck stop in Fultonville, NY.

One New York trucking company owner, Butch Mix, who owns Sunshine Bulk Commodities Inc., in Clifton Springs, NY, has 65 trucks. He has started making phone calls to lawmakers as well.

Mix has been in the trucking business since 1975. Skyrocketing fuel prices and the rising costs of doing business have caused him to take a hard look at how he’s running his company.

“It’s getting harder and harder to survive in this business and make a profit,” he told Land Line on Friday, May 2.

The costs for parts and tires have gone way up in price, too, which is hurting his trucking company’s profits. Mix said his customers all pay a different fuel surcharge, ranging from 20 percent to 50 percent, which he said is hard to figure his operating costs.

“I have started looking at some of my customers who can’t or won’t pass on a fuel surcharge and I have to decide if I want to continue to do business with them anymore,” Mix said.

Truckers and other port workers will be required to have Transportation Worker Identification Credential cards to enter ports in the New England region by mid-October and at all other U.S. ports by April 2009, the Transportation Security Administration announced Friday, May 2.

Previously, the TSA had a deadline of Sept. 25, 2008, for TWIC compliance.

The TWIC program requires more than 1.5 million port employees, longshoremen, mariners, truckers and others who require unescorted access to secure areas of ports to have background checks before being issued cards with their biometric data and residency documentation.

The New England ports, including the Port of Boston, and Northern and Southeastern New England, will require TWIC for unescorted port access by Oct. 15, a TSA-issued statement read.

“These three ports were selected based on favorable conditions that facilitate near-term implementation,” the statement read. “These ports are ideal for initial compliance based upon geographic proximity, the size of their TWIC enrollment population, and respective enrollment efforts to date.”

Nationally, TWIC cards will be required for truckers and other port workers by April 15, 2009.

Eventually, TWIC cards could also be used an accepted standard for truckers to get into warehouses and trucking yards inland.

Standard TWIC enrollment costs $132.50, though workers with “current, comparable” threat assessment background checks such as HAZMAT, Merchant Mariner Document or Free and Secure Trade (FAST) may obtain a TWIC card for $105.25. The card is designed to last five years.

Replacement cards for those who lose or damage their TWIC card cost $60, according to the TWIC website at www.tsa.gov/twic.

The TWIC program has been ridiculed by politicians for missing repeated implementation deadlines and running up costs of more than $100 million, according to the Government Accountability Office.

TWIC administrators also came under fire after it was discovered they’d miscalculated the number of employees who needed to enroll, doubling a previous estimate of 750,000 workers to 1,500,000.