Mr. KERRY. Mr. President, today I am pleased to introduce the Motor Carrier Fuel Cost Equity Act, which is much-needed legislation. My bill is designed to improve the ability of independent truck drivers to recoup losses from high fuel costs by requiring that motor carriers charge a fuel surcharge when the price of diesel fuel rises above $1.15 and pass-through this surcharge to the payer of the fuel costs. My bill will level the playing field for small operators, which comprise nearly 80 percent of the motor carrier industry, without any cost or regulatory requirement for the Federal Government.

There are approximately 350,000 independent truck drivers, known as owner-operators, who haul freight either on a per-load contractual basis or by leasing their truck and driving services to a motor carrier, freight forwarder or other shipping broker. Owner-operators essentially are independent contractors. Sometimes they provide their services directly to a shipper, but more often owner-operators contract out their services to a motor carrier company which negotiates its own contract with a shipper and then pays the owner-operator to provide the transport service.

Fuel surcharges are a long-established method of permitting motor carriers, airlines and even taxis to recover high fuel costs. But because of intense competition in the industry, owner-operators have little ability to negotiate terms of transport with a motor carrier, and in virtually no circumstance are they able to pass along the increased costs of fuel to the shipper. The inability of independent truck drivers to pass along the higher fuel costs of the last two years has resulted in the bankruptcy of 7,000 trucking companies, nearly all small businesses, and the repossession of nearly 200,000 trucks.

I'd like to make clear a couple of additional points about the legislation: First, the bill would not affect less-than-truckload carriers, such as package delivery services. Many of these services are already imposing surcharges and they don't face the same unique situation that confronts the independent trucker. Second, my bill allows the parties to set their own surcharge formulas, but the surcharge must be sufficient to fully compensate the person who pays for the fuel. That's only fair, but it allows the motor carriers and truckers the greatest degree of flexibility in negotiating the terms of transport.

While national diesel fuel costs have recently fallen below the $1.15 threshold, we know well that fuel costs can increase suddenly. America's independent truckers, which form the backbone of truck transportation in this country, deserve the ability to protect themselves during these periods of high diesel fuel prices.

I am proud to be joined by Senator Bond in introducing this bill today. I am also pleased that Congressman Rahall has introduced similar legislation on the House side. He has worked hard on this bill for several years now, and I look forward to working closely with him as we move forward on this legislation.