MTMC's fuel surcharge gives truckers relief

Translog: Journal of Military Transportation Management, July-August, 2001 by Leesha Saunders Galery

The brightly colored truck cabs and trailers of Roadway Express roll up and down the road at their Hagerstown, Md., distribution terminal.

They run at all hours--day and night.

In fact, nighttime is one of the busiest periods. Trucks come into one loading dock and their cargoes are redistributed, based on destinations, to other trailers for quick reshipment.

It is a cross-dock operation, said Steve Garth, surveying a constant din and motion of trucks and cargoes. Garth is the Senior Account Representative for Government Sales, Roadway Express, Inc.,

It is very efficient.

One reason for the positive energy and bustle at the Hagerstown terminal is the Military Traffic Management Command's new automatic fuel adjustment surcharge.

With the price of diesel fuel up, the surcharge is at work.

In late May, truckers hauling freight for MTMC are getting a 2-percent boost in their fees. In other words, a $1,000 shipment rates a $20 fuel surcharge.

"The fuel surcharge really helps," said Garth.

MTMC implemented the policy last January to help shoulder the burden faced by many Department of Defense freight and household goods carriers over the rising cost of fossil fuels.

Retired Col. Clark Hall, former MTMC Chief of Staff, who headed the effort, said the reasons were simple.

"Of course, we want to help carriers meet the added costs," said Hall. "At the same time, we want MTMC to be a shipper of choice for motor carriers."

That is something Garth understands.

Recently, Garth confided, he did some rough calculations on fuel costs.

Each one-cent increase in the price of fuel, said Garth, increased the total costs for Roadway's nationwide effort by $1 million.

These days, said Garth, fuel surcharges are a way of life in the business.

"If a company does not have a fuel surcharge policy, it is covered in the contract," said Garth.

Garth echoed the one word many carriers feel about the MTMC policy: Consistency. No longer do carriers have to react to fuel price spikes.

"It used to be that the surcharges changed from one installation to another," said Garth. "Now it's one cost for the military, and that translated into consistency for us.

"This also helps us improve accuracy and greatly reduces our billing times."

Before the amendment, carriers would calculate fuel costs based on, or separate from, the tender rates. Now, they file less-than-truckload charges without the worry of covering their increased fuel cost.

This allows carriers to remain competitive.

"We don't have the concern of repeatedly updating our fuel rates," said Garth.

For Roadway, fuel surcharges do not stop with the military.

"We pay fuel surcharges to our air and rail providers, too."

Such help for the industry is timely.

"It's fair, very fair," said Garth. "Everybody is on an even playing field."

With Roadway using more than 100 million gallons of diesel fuel per year, said Ron Johns, Human Resources Manager, the automatic surcharge is essential.

"Our goal is to meet the needs of our customers and deliver the shipment on time," said Johns, a longtime Roadway veteran.

"The costs of fuel undoubtedly affect that."

MTMC has received a very positive response from industry on the new fuel surcharge policy, said the coordinator of the MTMC Fuel Board, Ruth Tetreault.

"The carriers are pleased with the surcharge--and the standardization is a plus," said Tetreault.

"The (trucking industry) is satisfied with the new automatic policy--no more writing letters to receive fuel surcharges."

Tetreault reports virtually no complaints from industry.

"Everything is running smoothly."

In the near future, Tetreault said that meetings will be held with commercial and government transportation representatives to discuss any concerns resulting from the new policy.