Military motor carriers: MTMC adopts automatic fuel surcharge policy

ALEXANDRIA, Va. (USTCNS) --- Motor carriers doing business with the Military Traffic Management Command are now eligible for automatic fuel surcharges.

MTMC agreed to an automatic fuel surcharge Jan. 22 that will automatically boost motor carrier revenue in times of wildly fluctuating fuel prices.

"This is the right thing to do for our industry partners," said Ruth Tetreault, Coordinator, MTMC Fuel Board. "When there are volatile fuel prices - the fuel surcharges take affect."

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

Now, MTMC has made surcharges automatic for motor carriers by linking them directly to the price of diesel fuel.

The motor carrier industry has been buffeted by fluctuating fuel prices throughout the past year. Prices for a gallon of diesel fuel ranged from $1.31-to-$1.67 a gallon.

The new automatic fuel surcharge policy is a result of a joint MTMC-industry fuel board which included many industry representatives. The board held its first meeting Nov. 30.

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

"The policy establishes a baseline fuel price - with a 10-cent per gallon margin," said Tetreault.

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

Industry representatives on the board were enthusiastic.

"I think it is an excellent win-win situation," said Terry Head, President, Household Goods Forwarders Association of America, Inc.

"It truly is an excellent example of an industry able to partner with its No. 1 customer.

"The customer saw the need to come up with a solution - viewpoints were expressed but the outcome satisfied everyone."

Head said he thought it would be a 12-month process.

"We did it in two months!" said Head.

Landstar's Dave Larson said the policy is a good move for MTMC - and for the nation's truckers.

"We will compete on linehaul on our pricing," said Larson. "We do not have to second guess if we eventually get a fuel surcharge.

"We have a policy that applies across-the-board. We do not have to worry about fuel - we know we got some relief."

The surcharge is a necessity for military readiness," said Col. Clark Hall, MTMC chief of staff, who headed the board.

"We want fair compensation for the drivers of military cargoes," said Hall. "We want to ensure they will be here in time of an emergency."

MTMC has literally thousands of truck cargo movements each year. As an example, the organization directs the personal property moves of over 613,000 Department of Defense service members annually.

The automatic fuel surcharge idea originated during 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 Frank Galluzzo, director, Distribution Analysis Center, which developed the automatic fuel surcharge policy.

Fuel board members included Joe Harrison, of the American Moving & Storage Association; Paul Bomgardner, of the American Trucking Association; Gail Snodgrass, of Union Pacific Railroad; Head; and Larson. (FROM MILITARY TRAFFIC MANAGEMENT COMMAND PUBLIC AFFAIRS).