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Public Service Commission Won’t Bow To Pressure From Rogue Truck Drivers

Trucking industry study will help determine what tariff hikes are needed


November 14, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

It may be a matter of semantics whether Public Service Commission (PSC) tariffs for the trucking industry in 1998 and 2001 were meant to be temporary.

Regardless, PSC President Jose Hernandez says he is determined to come up with a fair tariff structure for local truck drivers, and he won’t be pressured by extremist measures such as traffic strikes or threats of legal action.

Last week, Truck Drivers Confederation President Victor Rodriguez paraded 130 trucks about the Hato Rey banking sector during peak morning traffic to protest the Department of Transportation & Public Works’ Vehicle Size & Weight Regulation (VSWR) and to demand rate increases based on the PSC’s 2001 schedule.

"Several issues have been used to confuse what the PSC is doing to review truckers’ tariffs," Hernandez said. "The PSC has steadfastly sustained that the approval of a Vehicle Size & Weight Regulation corresponds to the Department of Transportation & Public Works [DTOP by its Spanish acronym]. This regulation is out of my jurisdiction and out of my hands.

"What we are doing at the PSC is a much-needed revision of truckers’ tariffs and looking out for the best interests of the various sectors we serve," continued Hernandez. "In the trucking industry, not only truckers must be considered but also contractors. The latter group has bids worth millions of dollars and stands to lose money if extreme tariff increases are implemented in a short time."

Established in 1962, one of the primary functions of the PSC is to set tariffs for cargo transport. It wasn’t until 1988 that the agency approved its first—and only permanent—rate increase, of 24%. By 1995, dump-truck drivers had been granted a temporary fuel subsidy that was dependent on the kind of aggregates carried (asphalt, rocks, sand, or landfill).

When Hurricane Georges hit Puerto Rico in 1998, new temporary rates for truck drivers removing debris were established, but never rescinded. Last, but not least important, was a temporary fuel subsidy approved in October 2001 of 5% on top of 1995’s also-temporary fuel subsidy.

"The problem is the PSC has been using the term temporary to describe rate hikes that are revised yearly according to increases in cost of living, fuel costs, etc.," said Luis Falcon, president of the Brotherhood of Truck Drivers, which represents more than 40 trucking organizations. "The PSC has always used this term when speaking about its rates."

CARIBBEAN BUSINESS inspected several documents of the PSC. Several did in fact refer to truckers’ rates as temporary, meaning they were revised annually. Most recently, DTOP Secretary Jose Izquierdo’s told CARIBBEAN BUSINESS he favors a 20%, two-year rate increase that doesn’t include the 12% in temporary fuel subsidies previously approved, for a net 8% increase.

Hernandez admitted some of the procedures at the PSC need to be corrected, including the use of the term temporary rate. Since becoming president just a couple of months ago, he has had to deal with several controversies, including spying equipment found in his office and throughout the building, unprofessional behavior by employees during working hours, and last week’s truck strike.

"We are waiting for a market study of the trucking industry that was commissioned in May which should help determine how much the rates will be affected. I am committed to doing whatever needs to be done to protect the interests of all the parties involved and to reach a happy medium," said Hernandez.

In the meantime, the Brotherhood’s Falcon said he refuses to resort to the Confederation’s disruptive antics without a clear picture from the PSC about the study’s results.

"Our organization has spent more than $300,000 on publications, leaflets, and meetings to get the message out about the regulation’s implementation, which we wholly approve, and about the rate hike we are asking," Falcon said. "Since the 1980s, the Brotherhood has filed at least 89 claims against contractors and trucking companies who accept lower tariffs. Some contractors even admit they only pay 1995 tariffs [CB Sept. 12]."

"If the PSC approves new tariffs based on the 1995 rates, most of the complaints will become academic and will be dismissed, with millions of dollars in retroactive rate payments lost. We cannot allow this to happen, but we are willing to wait for the PSC’s market study to verify what the industry’s real costs involve," Falcon said.

This Caribbean Business article appears courtesy of Casiano Communications.
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