Surcharges should be mandatory

U.S. Court of Appeals for the Ninth Circuit ordered a lower court to determine whether a UPS driver’s asserted problems with breathing and functioning in temperatures of 90 degrees or higher constituted a disability that had to be reasonably accommodated under the Americans with Disabilities Act by provision of an air-conditioned tractor. The ruling overturned the summary judgment granted to UPS by the district court.

USF Holland’s defense against a racial discrimination lawsuit on the grounds that it had a policy against harassment was insufficient because the policy was not enforced consistently, the U.S. Court of Appeals for the Sixth Circuit ruled in May. The appeals court upheld a district court’s decision to award $350,000 in damages each to two African-American employees who had sued after several years of harassment from co-workers.

Department of Transportation’s Office of Drug and Alcohol Policy and Compliance has made available online materials designed to offer best practices and clear instructions for maintaining a DOT-compliant program. To access the document, go to

California Air Resources Board fined Apria Health Care $14,000 for violations of the state’s clean air laws requiring diesel fleet owners to maintain the exhaust systems of their truck engines. A CARB investigation revealed that the Lake Forest-based company failed to properly inspect and document their diesel trucks as required by law.

Q We are a small carrier, and we have been following the legislative efforts by the Owner-Operator Independent Drivers Association at mandating a “truth in contracting” statute that would require the pass-through of any fuel surcharge to the ultimate purchaser of the fuel. We have a broker affiliate, and such legislation does not threaten us because we disclose and pass through any fuel surcharge we get. We think it is only ethical to do so. Unfortunately, the fuel surcharges paid by shippers are all over the lot, and there is no consistency for long-term pricing. Today’s flat rate is not compensatory for tomorrow’s freight. Back in the 1970s, the Interstate Commerce Commission imposed a mandatory fuel surcharge that applied across the board. Has anyone suggested reimposition of this concept?

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A I think you have an excellent idea. Few of us remember the ICC, and even fewer remember it fondly. But the old mandatory fuel surcharge you mention was based upon the Department of Energy average and established a benchmark for pricing that seems sorely needed in today’s marketplace. With more perceived capacity than available freight, many shippers have moved the traditional set point of $1.16 or $1.20 per gallon, are trying to insist on fuel formulas in excess of 6 miles per gallon, or otherwise are wringing additional compensation out of the increasing cost of fuel. One novel plan even insists on lane-by-lane pricing free from the published DOE matrix with compensation predicated on rack plus 2 cents per gallon.

A small carrier or owner-operator cannot even buy fuel at this rate, much less be compensated for idling and deadhead costs. When brokers buy into these confusing and noncompensatory fuel surcharge schemes, deduct their margin and then flat-rate the small carriers and independents, the resulting call for congressional action should come as no surprise. Most small carriers do not have the 12 to 15 percent profit margin enjoyed by some large brokers. Monkeying around with the customary fuel surcharge when fuel costs approach 80 cents per mile quickly becomes a life-or-death issue to the small carrier.

Recent truck reports show that dry van brokers are increasing market shares at the expense of large and mid-sized asset-based carriers, as shippers increasingly engage brokers to look for ways to lower their overall transportation costs in the expensive fuel environment. Clearly, shipper and broker lobbyists oppose litigation and claim on the Hill that free market principles are self-correcting and that no legislation is needed. This laissez-faire attitude may be shortsighted if failure to address the fuel surcharge issue with standard pricing runs small carriers out of business.

At the end of the day, tinkering with the fuel surcharge should not be used by design or deception as a way to negotiate freight rates. Likewise, carriers must avoid colluding to set surcharges at specific levels. But a standard reasonable fuel surcharge, whether arrived at by consensus or by legislative imposition, certainly seems needed and fair.

Owners sentenced in log fraud case
The president and co-owner of Madera, Calif.-based Nijjar Brothers Trucking were sentenced for false statements and aiding and abetting in connection with routine falsification of driver logbooks. President Surinder Nijjar will receive 12 months in prison and 36 months of supervised release, while co-owner Amritpal Singh was sentenced to 12 months probation.

An investigation by the Department of Transportation’s Office of Inspector General followed an accident in which a Nijjar Brothers driver caused a four-vehicle collision that killed two people and injured six. The Nijjar Brothers driver had been driving for at least 19 hours; he subsequently was convicted and sentenced for falsifying logbook entries and served time in jail.

As part of the sentencing agreement, the two owners also are required to inactivate their DOT numbers, dissolve the companies, not have any ownership or interest in a trucking company during the periods of their probations, and each pay a fine of $50,000 to the U.S. Treasury on behalf of their companies.