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Notice

Publication of Changes to Surface Deployment and Distribution Command Policy TR-12, Fuel Related Rate Adjustment Policy

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

AGENCY:

Department of the Army, DOD.

ACTION:

Notice IAW 41 U.S.C. 418b.

SUMMARY:

SDDC intends to modify SDDC Policy TR-12. SDDC intends to implement the modified policy 90 (ninety) days from publication in the Federal Register. Modifications include the following: 1. SDDC will no longer pay a Fuel Related Adjustment (FRA) or fuel surcharge on movements based on what is known as a “Spot Bid” tender. 2. SDDC will no longer pay an FRA for any type of rail shipment. 3. SDDC will pay an FRA based on an updated baseline of $2.50 rather than a baseline of $1.30.

DATES:

SDDC intends to implement the policy change 90 (ninety) days from publication in the Federal Register, except that the effective date of the policy change for the SDDC Personal Property Program is April 1, 2007 for the domestic line haul portion of international movements and May 1, 2007 for the line haul portion of Start Printed Page 59497domestic interstate and intrastate movements including Alaska and Hawaii. Until the policy change goes into effect for Personal Property Program shipments, the policy in TR-12 dated October 5, 2005 shall continue to be used to determine payment for Personal Property Program shipments.

ADDRESSES:

Submit comments to Ms. Carol Breen, 200 Stovall St., Hoffman II, Room 11S19, Alexandria, VA 22332. Request for additional information may be sent by e-mail to: breenc@sddc.army.mil.

End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Military Surface Deployment And Distribution Command (SDDC)—Transportation and Travel

Subject: Fuel-Related Adjustment (FRA) Policy

This version of Policy No. TR-12 supersedes all previous versions of TR-12, except to the extent that a previous version is explicitly referenced as the basis for payment in an agreement with SDDC.

A. Policy

1. The following FRA or fuel surcharge policy applies to commercial carrier freight and personal property movements within the United States. SDDC will pay an FRA for certain types of domestic movements, as stated in paragraph E. SDDC will no longer pay an FRA on “Spot Bid” movements, regardless of mode. Nor will SDDC pay an FRA for any type of rail shipment. This policy provides the transportation industry, including individual carriers, economic adjustment and reasonable relief for unanticipated increases in diesel fuel prices. Carriers are urged to consider anticipated variation in fuel prices when submitting or supplementing rates during rate filing and/or bid submission periods.

2. Written provision will be made in SDDC regulations and solicited tender agreements for FRAs. At the sole discretion of the appropriate Contracting Officer this policy may be applied to Federal Acquisitions Regulation (FAR) contracts. SDDC has no obligation whatsoever to apply this policy to FAR contracts other than where the appropriate Contracting Officer determines that it shall apply.

B. Effective Date

The effective date of the policy change is 90 (ninety) days from publication in Federal Register, except that the effective date of the policy change for the SDDC Personal Property Program is April 1, 2007 for the domestic line haul portion of international movements and May 1, 2007 for the line haul portion of domestic interstate and intrastate movements including Alaska and Hawaii. Until the policy change goes into effect for Personal Property Program shipments, the policy in TR-12 dated October 5, 2005 shall continue to be used to determine payment for Personal Property Program shipments.

C. Expiration Date

This policy is in effect until superseded or withdrawn in writing.

D. Definitions

The following definitions shall apply to terms used in this regulation.

1. Fuel Cost: The national average diesel fuel price published by the Department of Energy (DOE) Energy Information Administration (EIA). The diesel fuel prices published by the EIA may be found via the following sources:

—EIA Website: http://www.eia.doe.gov/​

—EIA Weekly Petroleum Status Report

—EIA Hotline: (202) 586-6966

2. Pick up date: The date listed on the bill of lading indicating the calendar day on which the carrier takes possession of a given shipment.

3. Spot Bid: A flexible and responsive one-touch electronic resource that posts open shipments for bid by qualified carriers via the Internet. It is a viable acquisition alternative for procuring transportation services for one-time only, unique shipments of any or all modes. It supports SDDC Operations policy on overweight/over-dimensional shipments. Carriers bid on open shipments via the Internet, and bids remain sealed until the bid timeframe closes. It allows the Shipper to establish the bidding timeframe. Bids are used in place of standard tenders in the generation of a Bill of Lading. It also provides automatic open shipment notification for participating carriers. All submitted bids reflect an all-inclusive expense representing line haul, accessorial charges, and any additional expenses anticipated to support that particular shipment.

E. Application

SDDC shall pay an FRA in accordance with this policy on the following types of movements.

1. Personal Property Program: a. Pickup occurs on or after April 1, 2007 for the domestic line haul portion of international movements and on or after May 1, 2007 for the line haul portion of domestic interstate and intrastate movements including Alaska and Hawaii.

b. The transportation charges applicable on domestic and international storage-in-transit shipments when such shipments are delivered or removed from the domestic storage-in transit warehouse of the CONUS segment including Alaska and Hawaii.

2. Domestic Freight Program: a. The domestic line haul portion of the carrier rate including Alaska and Hawaii.

b. The accessorial, Commercial Security Escort Vehicles (CSEV).

F. Determination of Adjustment Amount

1. Formula: For applicable shipments, the FRA shipments shall be paid based on a percentage of the line-haul rate. The line-haul rate does not include accessorials unless specified in the policy, i.e., E.2.b, or specifically called for in the solicitation for the freight movement on which the FRA is based. Where the FRA applies, SDDC shall pay the carrier 1% (one percent) of the line-haul rate, not including accessorial charges, for every increment of $.10 (ten cents) by which the fuel cost exceeds $2.50 at the time of pickup.

2. Determination of Fuel Cost at Time of Shipment: a. For applicable personal property program shipments, SDDC shall pay the FRA based on the fuel cost published on the first Monday of the month in which the shipment subject to the FRA is picked up. If Monday is a holiday the fuel price will be determined based on the price on the next business day. The fuel adjustment will automatically apply to shipments picked up on or after the 15th day of the month through the 14th day of the following month.

b. For applicable domestic freight program shipments, SDDC shall pay the FRA based on the fuel cost published on the Monday of the week in which the shipment subject to the FRA was picked up. If Monday is a holiday the fuel price will be determined based on the price on the next business day.

G. Monitoring Diesel Fuel Prices

1. Fuel Price Source: It is the responsibility of the carrier to monitor diesel fuel prices via one of the sources identified in this policy. The National Average diesel fuel price determined by the DOE, EIA will serve as the basis for determining the entitlement to an FRA. The National Average fuel price and the actual pickup date of shipment will determine if there is an entitlement to an adjustment and the amount of the adjustment. An adjustment is not applicable to any portion of transportation in which a surcharge or Start Printed Page 59498any other additional payment for fuel is already in existence.

2. Percentage: Please see the table included to the Attachment to this policy for a demonstration of the percentage amount of the FRA for applicable shipments.

H. Billing Procedures

Carriers will clearly show fuel price adjustments on all paper and electronic commercial freight bills and Bills of Lading and invoices. The amount of any diesel fuel rate surcharge must be shown as a separate item on the carrier's invoice.

Regulatory Flexibility Act

This action is not considered rulemaking within the meaning of Regulatory Flexibility Act, 5 U.S.C. 601-612.

Paperwork Reduction Act

The Paperwork Reduction Act, 44 U.S.C. 3051 et seq., does not apply because no information collection or record keeping requirements are imposed on contractors, offerors or members of the public.

Start Signature

David R. McClean,

Colonel, U.S. Army, Deputy Chief of Staff for Strategy, Plans, Policy and Programs.

End Signature

Attachment

The table below demonstrates the percentage of the line-haul rate SDDC will pay at a given fuel cost given a $2.50 baseline. Should the baseline differ at any time, the same principle applies simply with a different starting point for calculating the percent adjustment. The table ends at $4.40, but the same principle applies to fuel costs above that dollar amount.

Cost per gallonRate adjustment (percent)
250.0 and below0
251.1—260.01
260.1—270.02
270.1—280.03
280.1—290.04
290.1—300.05
300.1—310.06
310.1—320.07
320.1—330.08
330.1—340.09
340.1—350.010
350.1—360.011
360.1—370.012
370.1—380.013
380.1—390.014
400.1—410.015
410.1—420.016
420.1—430.017
430.1—440.018

For example, if the reported DOE, EIA National Average diesel fuel price is $3.15 the carrier would be entitled to an FRA of 7% of the line-haul rate.

End Supplemental Information

[FR Doc. E6-16685 Filed 10-6-06; 8:45 am]

BILLING CODE 3710-08-P