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Is Re-Regulation of Trucking the Answer?

12/05/08

Is Re-Regulation of Trucking the Answer?

  05:19:00 pm, Categories: regulations , Tags: fuel surcharges, hr 5934, hr 5977, hr 5997, re-regulation, sb 2910

Nine months ago, as fuel prices were nearing the $5.00/gal mark, the OOIDA (Owner-Operators Independent Drivers Association) approached congress and successfully initiated House Resolutions HR 5934 and HR 5977 and their counterpart Senate bill SB 2910 (the TRUCC Act) (Trust in Reliable Understanding of Consumer Costs Act). HR 5934 and 5977 were soon followed by HR 5997 (the Fairness in Trucking Transactions Act). These legislations, if successful, would be the first steps in destroying 28 years of de-regulation in the trucking industry in my opinion.

HR 5934 and HR 5977 would “require a motor carrier, broker, or freight forwarder that collects a fuel surcharge to disclose and pay the fuel surcharge to the person responsible for bearing the cost of the fuel, and for other purposes”, while HR 5997 would “require a motor carrier, broker, or freight forwarder that collects a fuel surcharge to pay an amount equal to the surcharge to the person that bears the cost of the fuel.”

What happened to the free market system some of us old dogs fought so hard for back in the ‘70s? Asking the government to step in and regulate the fuel surcharge rates is only the beginning in my opinion. What’s next, ask the government to decide what trucks are able to haul what freight?

The ports of Los Angeles and Long Beach initiated their trucking “Concession Plans” on Oct 1st of this year. These Concession Plans, although opposed by the ATA (American Trucking Association), and under investigation by the FMC (Federal Maritime Commission) for violation of the federal Shipping Act, require any truck that desires to enter either port to pay a $2500 non-refundable registration fee, and if accepted, all trucks with port access will be required to meet certain standards. These standards also include a minimum truck age and acceptable emissions levels (don’t miss understand me, I am all for acceptable emissions standards, but that is a topic for another day).

Don’t these initiatives smack of government stepping back into the trucking regulation business?

What could re-regulation mean to me as a trucking company or as a truck owner? It could mean the re-establishment of the ICC (Interstate Commerce Commission) to regulate published tariffs. In other words, for me to haul any ‘regulated’ freight, I would have to publish a rate tariff that the whole world has access to. It doesn’t matter what that rate is, it’s published. Now my competition knows exactly what his rates need to be to undercut my rates with any or all of my customers. Since the cost of submitting a tariff amendment is so cost prohibitive, I can do nothing but hope, that in the eyes of my customers, my service is worth the rates I am charging. (By the way, if I don’t have a tariff published for/with a given customer, I can’t haul it.)

Many O/O’s out there are concerned that the ‘big guys’ are undercutting their current fuel surcharge and accessorial pricing in order to push the O/O out of business. Re-regulation means that the government can determine what fuel surcharge I can charge. And that price of fuel surcharge (and any other accessorial charge for which the government has taken ‘ownership’) will be calculated from a the national average or a regional average, but never close enough to the price I need to survive and compete with the ‘big guys’.

In my opinion, trucking and transportation are, and should be, part of free enterprise and a free market. We worked hard to get it there, and we should do all we can to keep it there. The big guys need the little guys, they need them to help cover their freight so they can stay in business. Capitalism works best when the rules of supply and demand are left to fight their own battles.

For those who say we need the government to help us make ends meet, I leave you with the words of TIA President and CEO, Robert Voltmann:

In the free market, companies are free to accept or reject jobs. Carriers should just say no to cheap freight.” (The full story is here.)

As a final note, all of the HRs and SB 2910 are still in committee, and hopefully will die there. But if the price of fuel starts to rise again, federal re-regulation of the trucking industry could be entertained once again.

Dale Clark
TruckMaster Solution Provider

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