Noting infrastructure funding’s widespread impact on trucking issues, ATA touts its fuel tax plan

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Updated Nov 1, 2018

Representatives from the American Trucking Associations and its research arm, the American Transportation Research Institute, on Sunday lamented lagging action on infrastructure funding as one that touches almost all of fleets’ biggest pain points.

Fleets’ struggles with driver recruiting and retention, climbing operational costs, the need for quicker deliveries in the age of e-commerce and the industry’s pressing parking shortage are all impacted by a lack of proper infrastructure funding, particularly from the federal government, they said.

Bob Costello, ATA’s chief economist, and Rebecca Brewster, president of ATRI, spoke in a panel titled “The Cost of Doing Nothing: Why we need infrastructure investment now” on Sunday at the American Trucking Associations’ 2018 Management Conference & Exhibition in Austin, Texas. The panel was moderated by Tonn Ostergard, chairman and CEO of Crete Carrier Corporation.

In addition to spelling out how waning infrastructure funding has compounded industry pain points, the panel touted ATA’s Build America Fund plan, which would add 20 cents to the per-mile tax on gas and diesel over the course of four years, as a way to stabilize the U.S. Highway Trust Fund.

“The fuel tax is the best way” to fund infrastructure projects, said Ostergard. “It puts the burden of cost to where the miles are being run. It works efficiently, but it needs to be” increased, he said.

Since 1993, federal fuel tax rates have been stuck at 18.4 cents on a gallon of gasoline and 24.4 cents a gallon on diesel. In that 25-year span, more fuel-efficient vehicles and inflation have severely undercut those rates’ funding power, Ostergard said, noting that 90 cents of every dollar spent on highway funding is used to maintain existing roadways. Just 10 cents of every dollar spent, he said, goes to building new highway capacity. “We need to maintain an aging structure, but we also need to grow it,” he said.

Federal lawmakers have been reluctant to raise fuel taxes, he said, instead opting for public-private partnerships that rely on tolls as their funding mechanism. Ostergard said tolls are inefficient and ineffective, calling them “a tax in disguise.”

The average motorist pays about $1,600 a year in lost time and vehicle maintenance due to road conditions, said Brewster. ATA’s plan to bump up fuel tax rates would only add about $100 a year to the average person’s fuel spending — a much cheaper rate than $1,600, she noted.

She also cited recently updated ATRI data that shows congestion costs the trucking industry $74.5 billion a year and lost productivity to the tune of 425,533 trucks sitting idle every year. That lost productivity exacerbates the driver shortage and drives up carriers’ operational costs, she said. “When you say how many drivers we need and then look at how many are [effectively] sitting idle, it punctuates” the issue of congestion, she said.

Added Costello, “This absolutely has an impact on your drivers,” he said. “Nobody likes sitting in traffic, let alone when that’s your job and you’re making money doing that.”

Drivers are hauling more loads but driving fewer miles, he noted, due to congestion and detention time. “All this builds up on the driver and makes it even more difficult to recruit people.”

When drivers encounter congestion, it also hampers their earning ability, said Ostergard. If a driver is driving at 25 mph through a crowded urban area like Atlanta, “their earning rate is cut in half,” Ostergard said.

Congestion also cuts into industry capacity, he said. “It’s systemic in terms of the impact it has,” worsening the driver shortage and limiting capacity, he said.