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MTMC adopts automatic fuel surcharge policy. (Military motor carriers).

Motor carriers doing business with the Military Traffic Management Command will be eligible for automatic fuel surcharges, effective April 1.

MTMC agreed Jan. 22 to an automatic fuel surcharge that will 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 prices, the fuel surcharges take effect."

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 per gallon.

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

Members agreed to use the Department of Energy's weekly fuel price as the governing 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, the fuel surcharge will kick in automatically"

Industry representatives on the board were enthusiastic.

"I think it's an excellent win-win situation," said Terry Head, President, Household Goods Forwarders Association of America, Inc., who also served on the MTMC fuel board.

"It truly is an excellent example of an industry able to partner with its No. 1 customer," said Head. "The customer saw the need to come up with a solution, viewpoints were expressed, and the outcome satisfied everyone"

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

"We did it in two months!" exclaimed Head. Landstar's Dave Larson, another fuel board member, said the policy is a good move for MTMC--and for the nation's truckers.

"We will compete on line-haul 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 don't have to worry about fuel--we know we have 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 emergency."

MTMC handles thousands of truck cargo movements each year. As just one example, the organization directs the personal property moves of more than 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 that we should have a 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.

Other fuel board members included Joe Harrison, of the American Moving & Storage Association; Paul Bomgardner, of the American Trucking Association; and Gail Snodgrass, of Union Pacific Railroad.
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Title Annotation:Military Traffic Management Command
Article Type:Brief Article
Geographic Code:1USA
Date:Mar 1, 2001
Previous Article:MTMC changes aimed at more efficient operations. (Streamlininq initiative).
Next Article:MTMC initiates big cut in cargo handling rates. (Second time in two years).

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