MTMC promises military motor carriers automatic fuel surcharges

ALEXANDRIA, Va. (USTCNS) --- Motor carriers doing business with the Military Traffic Management Command will be eligible for automatic fuel surcharges in the future.

That was the promise of Maj. Gen. Kenneth L. Privratsky, commanding general.

"It is my intent that when things happen (volatile fuel prices)," said Privratsky, "The fuel surcharges take affect."

The motor carrier industry has been buffeted by fluctuating fuel prices throughout 2000. Prices for a gallon of diesel fuel have ranges from $1.31-to-$1.67 a gallon.

In the past, the motor carriers incurring high diesel costs faced long delays in receiving MTMC fuel surcharges.

Privratsky would like to make surcharges automatic for motor carriers by linking them directly to the price of diesel fuel.

To achieve that goal, a joint MTMC-industry fuel board was formed Nov. 30.

Members agreed to use the Department of Energy's weekly fuel price as the governing national standard.

"Board members agreed to establish a baseline fuel price - with a 10-cent per gallon margin," said Frank Galluzzo, fuel board coordinator.

"For example, if we establish a fuel baseline of $1.30 and the price of fuel goes above $1.40 - they will be automated entitled to a fuel surcharge."

Industry representatives were enthusiastic.

"I think it is a great idea to everyone on the same page - to have it automatic," said Terry Head, president, Household Goods Freight Forwarders Association of America, Inc.

Other support came from Dave Larson, president, government/military representative of Landstar Trucking.

"I think it reflects partnership," said Larson. "Here's the policy - we can live with it."

The newly constituted fuel board is chaired by Col. Clark Hall, chief-of-staff.

"We have drafted a policy," said Hall. "We do not expect you to absorb increased fuel prices out of your profit margin."

Hall said the fuel surcharge is a necessity for military readiness.

"We do not want drivers refusing military cargoes," said Hall.

In any given year, MTMC has literally thousands of truck movements. As an example, the organization directs the moves over 640,000 Department of Defense service members annually.

The automatic fuel surcharge idea came from a National Defense Transportation Association committee meeting in New Orleans, in August.

"Our consensus was we should have fuel policy that fairly compensates our industry partners when the price of fuel rises," said Galluzzo.

MTMC's Distribution Analysis Center has developed a draft fuel surcharge policy.

"The fuel board intends to meet Dec. 12 to review the draft," said Galluzo. (FROM MILITARY TRAFFIC MANAGEMENT COMMAND PUBLIC AFFAIRS).