The trucking industry is likely to be paying more fuel taxes or shelling out more for tolls in the not-so-distant future, so it needs to be much more engaged in highway and infrastructure planning,
said American Trucking Assn’s President and CEO Bill Graves.
“We need to be at the table offering solutions to problems as opposed to just saying ‘no,’ which is historically what the industry has done.”
During a recent teleconference with the trade media, Graves and other ATA executives outlined some of the legislative, regulatory and business issues they’ll be dealing with this year, including infrastructure planning, safety, emissions, image and the driver shortage.
Last year’s highway bill contained a number of specific projects that may be revisited this year, but ATA’s primary focus will be on long-term infrastructure planning and funding. The highway bill sets up commissions to review the infrastructure and highway financing. ATA will work closely with both, said Tim Lynch, senior vice president of federation relations and strategic planning. The bill also gives the states more leeway for tolling, which ATA will monitor through its state associations.
Graves said he has genuine concerns about tolls, mainly because shifting the funding burden from taxes to tolls tends to benefit some states while penalizing others. But before methods of funding can be debated, highway congestion and capacity requirements need to be addressed.
“We know there has to be a multimodal response to freight demand in this country, that’s what the economy is asking for,” he noted. “The shipper and receiver probably don’t care if it’s a train, a truck, a barge or a pack mule. They just have specific supply chain demands and, in that regard, trucking needs to be a big part of what the future looks like.”
Stricter emissions rules for 2007 and 2010 seem to come with more questions than answers right now. Rich Moskowitz, ATA regulatory counsel, said they’re confident that refiners can produce ultra-low sulfur fuel, mandated for 2007, but they’re less confident that it can be moved through the distribution supply chain without becoming contaminated. “As you get further and further away from the refinery, there is a greater chance that the fuel will no longer meet the EPA thresholds,” he explained. Cost of the fuel may be a problem and there is some concern ultra-low sulfur may act as a solvent that could mean higher maintenance costs for truck owners.
ATA Chief Economist Bob Costello said pre-buying to avoid 2007 engines will be one reason for strong new truck sales this year, but not the only reason. The economy and freight demand are expected to be relatively strong. At the same time, fleet owners who stretched trade cycles in 2002 are still replacing those older vehicles.
ATA hasn’t thrown in the towel on tax incentives for buyers of the new engines, but in the current budget environment, “it’s pretty hard right now to get yourself on top of the list for favorable treatment on an issue like this,” Graves explained.
ATA has endorsed a 5 percent biodiesel blend and is “interested and eager” to support alternative fuel options, but he cautioned against moving too quickly. “If folks get into a big rush, all kinds of issues can arise. Because we run on every highway across the country, we must have consistency in quality of product in terms of the way it’s delivered and how it performs.”
ATA this year will also be working on improving the industry’s image. “I’m a strong believer in the old adage that public perception drives public opinion, which ultimately drives public policy,” said Graves, “and clearly we have to work on conveying the essentiality of trucking along with our strong passion for trying to be as safe as possible.”
One key area where ATA will focus its image efforts is driver recruiting. Bringing in drivers from other countries has potential, but also challenges. On the other hand, there are several more traditional sources for drivers that warrant additional attention, like people completing their first hitch in the military, Hispanics, younger people interested in apprentice programs before they’re old enough to get behind the wheel, and early retirees looking for a second career.
“The No. 1 issue is safety,” said Graves. ATA is aggressively promoting laws regarding the use of seat belts and getting truck drivers to buckle up. The organization also supports enforcement targeting problem truck and automobile drivers, particularly those who speed.
ATA last year announced conditional support for mandating electronic on-board recorders – if there is proof that they actually improve safety. Graves said many carriers look at the devices as part of a larger data gathering package related to the protection of driver and equipment. “I think there will be quite a bit of industry development on EOBRs,” he noted.
As for hours of service regulations, Graves noted that the industry and regulators continue to look for that “sweet spot” where the right amount of rest is balanced with driver productivity. Some have chosen to pursue HOS issues in the courts. ATA has elected to work closely with the Federal Motor Carrier Safety Administration and to pursue data that might back a general industry belief that more flexibility regarding sleeper berth time can provide a safe or safer scenario for drivers.
The good news is that all of this is happening at a time when the business outlook is good. ATA’s freight tonnage index dipped 3 percent in December and fourth quarter GDP growth was a disappointing 1.1 percent. Costello said both were surprises, driven largely by slowing production in the automotive sector. Nevertheless, “we don’t think it’s time to panic,” he said. “I think the economy is solid. It may not be as strong as we’ve seen in the past, but it’s certainly not weak. And that’s what we like to see. When the economy is growing too fast that’s usually unsustainable. We like to see slower, more sustainable growth.”
He forecasts GDP growth this year in the 3 percent to 3.5 percent range. Truck tonnage grew about 2 percent in 2005 and will likely repeat that performance this year. “That may not seem strong, but it was quite strong because capacity was so limited,” he noted.
said American Trucking Assn’s President and CEO Bill Graves.
“We need to be at the table offering solutions to problems as opposed to just saying ‘no,’ which is historically what the industry has done.”
During a recent teleconference with the trade media, Graves and other ATA executives outlined some of the legislative, regulatory and business issues they’ll be dealing with this year, including infrastructure planning, safety, emissions, image and the driver shortage.
Last year’s highway bill contained a number of specific projects that may be revisited this year, but ATA’s primary focus will be on long-term infrastructure planning and funding. The highway bill sets up commissions to review the infrastructure and highway financing. ATA will work closely with both, said Tim Lynch, senior vice president of federation relations and strategic planning. The bill also gives the states more leeway for tolling, which ATA will monitor through its state associations.
Graves said he has genuine concerns about tolls, mainly because shifting the funding burden from taxes to tolls tends to benefit some states while penalizing others. But before methods of funding can be debated, highway congestion and capacity requirements need to be addressed.
“We know there has to be a multimodal response to freight demand in this country, that’s what the economy is asking for,” he noted. “The shipper and receiver probably don’t care if it’s a train, a truck, a barge or a pack mule. They just have specific supply chain demands and, in that regard, trucking needs to be a big part of what the future looks like.”
Stricter emissions rules for 2007 and 2010 seem to come with more questions than answers right now. Rich Moskowitz, ATA regulatory counsel, said they’re confident that refiners can produce ultra-low sulfur fuel, mandated for 2007, but they’re less confident that it can be moved through the distribution supply chain without becoming contaminated. “As you get further and further away from the refinery, there is a greater chance that the fuel will no longer meet the EPA thresholds,” he explained. Cost of the fuel may be a problem and there is some concern ultra-low sulfur may act as a solvent that could mean higher maintenance costs for truck owners.
ATA Chief Economist Bob Costello said pre-buying to avoid 2007 engines will be one reason for strong new truck sales this year, but not the only reason. The economy and freight demand are expected to be relatively strong. At the same time, fleet owners who stretched trade cycles in 2002 are still replacing those older vehicles.
ATA hasn’t thrown in the towel on tax incentives for buyers of the new engines, but in the current budget environment, “it’s pretty hard right now to get yourself on top of the list for favorable treatment on an issue like this,” Graves explained.
ATA has endorsed a 5 percent biodiesel blend and is “interested and eager” to support alternative fuel options, but he cautioned against moving too quickly. “If folks get into a big rush, all kinds of issues can arise. Because we run on every highway across the country, we must have consistency in quality of product in terms of the way it’s delivered and how it performs.”
ATA this year will also be working on improving the industry’s image. “I’m a strong believer in the old adage that public perception drives public opinion, which ultimately drives public policy,” said Graves, “and clearly we have to work on conveying the essentiality of trucking along with our strong passion for trying to be as safe as possible.”
One key area where ATA will focus its image efforts is driver recruiting. Bringing in drivers from other countries has potential, but also challenges. On the other hand, there are several more traditional sources for drivers that warrant additional attention, like people completing their first hitch in the military, Hispanics, younger people interested in apprentice programs before they’re old enough to get behind the wheel, and early retirees looking for a second career.
“The No. 1 issue is safety,” said Graves. ATA is aggressively promoting laws regarding the use of seat belts and getting truck drivers to buckle up. The organization also supports enforcement targeting problem truck and automobile drivers, particularly those who speed.
ATA last year announced conditional support for mandating electronic on-board recorders – if there is proof that they actually improve safety. Graves said many carriers look at the devices as part of a larger data gathering package related to the protection of driver and equipment. “I think there will be quite a bit of industry development on EOBRs,” he noted.
As for hours of service regulations, Graves noted that the industry and regulators continue to look for that “sweet spot” where the right amount of rest is balanced with driver productivity. Some have chosen to pursue HOS issues in the courts. ATA has elected to work closely with the Federal Motor Carrier Safety Administration and to pursue data that might back a general industry belief that more flexibility regarding sleeper berth time can provide a safe or safer scenario for drivers.
The good news is that all of this is happening at a time when the business outlook is good. ATA’s freight tonnage index dipped 3 percent in December and fourth quarter GDP growth was a disappointing 1.1 percent. Costello said both were surprises, driven largely by slowing production in the automotive sector. Nevertheless, “we don’t think it’s time to panic,” he said. “I think the economy is solid. It may not be as strong as we’ve seen in the past, but it’s certainly not weak. And that’s what we like to see. When the economy is growing too fast that’s usually unsustainable. We like to see slower, more sustainable growth.”
He forecasts GDP growth this year in the 3 percent to 3.5 percent range. Truck tonnage grew about 2 percent in 2005 and will likely repeat that performance this year. “That may not seem strong, but it was quite strong because capacity was so limited,” he noted.
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