TIA, though its management of the American International Freight Association (AIFA), serves as the US member of the International Federation of Freight Forwarders Associations (FIATA). FIATA regular members include the national trade associations of transportation intermediaries in more than 100 countries representing more than 40,000 transportation intermediaries worldwide.
The TIA membership, made up of small businesses who move over $5 billion in freight annually, have suffered due to the rapid increase in diesel fuel. In some situations, this fuel increase jumped over 50% of its original cost in a one-month period. This rapid increase provides little time for these costs to be passed through to the consumer and in many situations is swallowed up by the TIA member company.
At our association’s recent convention in Orlando, the fuel crisis was the number one issue of concern to our membership. The TIA Board of Directors expressed its support for owner-operators and other motor carriers during this difficult period. TIA has strongly urged its property broker members to work with both shippers and carriers to work out private sector solutions in dealing with the increased costs.
TIA realizes that any short-term effort to repeal the federal diesel tax would have a long-term effect on highway construction and should be considered with caution. While it is tempting to recoup some lost revenue with a tax repeal, ultimately it would hurt the transportation industry in the long run as well as set much needed transportation improvements backward after we have won a hard fought battle to increase highway funding in TEA-21.
Some elements of the motor carrier industry have called on Congress to implement a fuel surcharge on property brokers and shippers. TIA believes this would be an ill-advised course of action for a variety of reasons. First, Congress has deregulated the motor carrier industry and we have seen great success because of it. Over 87% of all freight in this country is now moved by truck. This is no accident. This occurs because of a competitive, deregulated market environment.
Second, even with our private sector meetings with the trucking industry, it has become apparent that it is almost impossible to come up with a “one-size fits all” formula. Fuel prices vary greatly throughout the country and can change on a daily basis.
Third, TIA believes that the federal government should not impose their will on pricing in a private sector market. While the federal government should always have an oversight role when it comes to safety in the transportation industry, if a true open marketplace is to function, it must do so without the threat of government intervention.
If government intervention in the marketplace is not the solution, what can be done to alleviate this fuel crisis? First, TIA believes that the White House should immediately release oil from the nation’s strategic petroleum reserve. The reserve currently contains 600 million barrels of oil set aside by a 1975 law for use in a fuel emergency.
If the Administration only releases two to three million gallons of oil a week for three weeks, the OPEC nations will take notice. The action would show the world the United States is prepared to take a hard stand against the OPEC pricing scheme. The time is now for the Administration to show leadership by taking this important action.
The Administration has recognized the need for such action with regard to home heating oil in New England with the support of a specialized fuel reserve. As this committee well knows, trucking is the heart of the American transportation system and diesel is its lifeblood. Our economy cannot continue without trucks. The administration needs to recognize the role trucking has played in our economic success, and do what it takes to keep the rigs rolling.
The administration can take other action as well. Secretary of State Madeline Albright just last week resumed some trade with Iran. Unfortunately, oil sales to the US were excluded from that trade.