December 2016

Trump And Trucking

If early chatter is any indication, the Trump administration could follow through on some badly needed road and infrastructure projects that will benefit the trucking industry. That’s the potential good news.

The bad news is the industry likely will have to pay for any improvements, either through higher fuel taxes or tolls.

At least, that’s an early assessment by analysts at FTR Transportation Intelligence, an industry research firm.

Trump’s strong commitment to infrastructure is positive for most industries that rely on transportation. How these projects will be funded, however, might not be widely embraced by the trucking industry, according to FTR analysts.

“We have to find a way to pay for these projects,” said Noël Perry. “Trump made it clear during his campaign that he wasn’t going to increase the deficit to pay for infrastructure projects. The trucking industry shares the highway, so we have to pay our fair share.”

It’s well known that the American Trucking Associations is on record opposing tolls to fund highway building and infrastructure projects. Instead, the trucking industry’s largest trade group supports raising fuel taxes. Perry said the industry should be prepared for both.

The industry also could see a reversal in several Obama administration regulatory initiatives.

A Department of Transportation plan for trucks that weigh more than 26,000 pounds to be equipped with electronic devices that would cap their top speed might be pushed back, Perry said.

The issue has divided the industry.

Major carriers and the ATA support limiting the speed of heavy-duty trucks. But many independent drivers and small trucking firms object to the regulation. They claim it represents unwarranted interference in how they run their businesses and could create a safety hazard when trucks need to pass other trucks.

Also, industry-supported proposed changes in the so-called hours-of-service rules – regulations limiting how long truckers can drive without rest break -likely will be tabled.

“Trump is going to have bigger fish to fry than trucking and so does Congress,” Perry said. “I don’t think he’s going to spend a lot of time worrying about regulatory issues right away.”

As far as other issues that could impact trucking, Trump’s campaign promises to renegotiate or scuttle the North American Free Trade Agreement and embark on other protectionist policies could trigger a trade war.

“If he starts a trade war, we are going to have a recession, period,” Perry said.

Given the global nature of many supply chains, trade battles could become very disruptive, Witte said. Despite the many unknowns, Trump opens the possibility of several developments that could boost the economy and thus the trucking industry, according to Witte.

Trump himself has the authority to make significant changes that benefit trucking, said Perry. “The one that could have the most immediate impact would be regulatory changes since a lot can be done there by executive action without the need for Congressional legislation.”

Changes in the tax code also could be favorable to trucking, especially large family-owned carriers. Meanwhile, Trump’s energy policy could help increase oil production, which would create demand for trucking and keep fuel prices low.

Over all, the analysts are hopeful good times are ahead for the trucking industry under a new administration.

“Trucking companies may be better off in 2017,” Perry said. “As we enter 2017, expectations are low and the economy is likely to be better than expectations, as least for the first half.”

Edited version of an article by Clarissa Hawes that appeared in Trucks.com

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