Two U.S. senators have introduced legislation that would automatically impose fuel surcharges when diesel costs hit $1.15 per gallon. The proposal also would require that the surcharges compensate whoever is paying for the fuel.

Owner-operators and truckload carriers had sought similar legislation when diesel-fuel prices jumped sharply beginning in mid-2000. The House of Representatives passed a fuel-surcharge bill, but it died in the Senate.

Now, with fuel prices climbing again, senators John Kerry (D-Mass.) and Kit Bond (R-Mo.) have introduced S. 1914, the Motor Carrier Fuel Cost Equity Act of 2002. The bill, which has the support of both the Owner-Operator Independent Drivers Association and the Truckload Carriers Association, has been assigned to the Senate Committee on Commerce, Science and Transportation.

S. 1914 would require any contract or agreement for truckload transportation to assess a fuel surcharge when diesel prices exceed a benchmark price of $1.10 a gallon by five cents or more. (The bill that passed the House in the previous Congress would have set a floating benchmark based on the price of fuel 12 months earlier.) The legislation would direct carriers, brokers or forwarders to pass along the surcharges to the person or company paying for the fuel. It also would prohibit reducing other payments to avoid the pass-through.

Were the law in place now, the surcharges would already have taken effect. National diesel fuel costs in mid-March averaged $1.25 a gallon, according the Energy Information Agency of the U.S. Department of Energy. In California, prices averaged $1.42 a gallon. Just two months earlier, national prices had reached a recent low of $1.14 per gallon before climbing sharply. (See chart, below.)

During the last runup in fuel prices, national average prices peaked at $1.67 per gallon in October 2000. In the past year, the highest average price was $1.53 per gallon, reached late last May.