U.S. Army changing fuel adjustment policies
The U.S. Army is proposing changes to its fuel adjustment policies on contracts. The changes, published in today’s Federal Register, would take effect in 90 days.
Known as the Surface Deployment and Distribution Command Policy TR-12, Fuel Related Rate Adjustment Policy the changes are as follows:
* 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.
* SDDC will no longer pay an FRA for any type of rail shipment.
* SDDC will pay an FRA based on an updated baseline of $2.50 rather than a baseline of $1.30 where the rate is increased 1 percent for each 10-cent increase in the national average of diesel fuel price as determined by they Department of Energy’s Energy Information Administration.
For example, if EIA national average diesel fuel price is $3.15, the carrier would be entitled to an FRA of 7 percent of the line-haul rate.