American Trucking Associations President & CEO Chris Spear took to Medium on Thursday to tout the benefits the trucking industry will see from passage of the new tax law.
“Thanks to the effort of so many, from the president down, that package has given the trucking industry a boost that will be felt for the months and years to come,” Spear wrote.
Spear noted that the tax cuts will “unlock the investment potential of carriers that historically operate on razor thin margins.” This will include the ability for fleets to financially compete for drivers, mechanics and dispatchers.
A recent ATA survey cited by Spear found that 50% of carriers plan to increase wages or offer a one-time bonus.
“Those investments also include accelerated purchases of new trucks, as orders for new vehicles surged 15% in December — hitting the highest total for the final month of a year in three years,” he said.
The survey found that 47% of fleets plan to use some of the tax windfall to invest in new equipment.
“Similarly, trailer orders have been on the upswing. The increased flexibility to invest has pushed trucking companies to pull the trigger on buying newer, safer, cleaner, more efficient vehicles — a win for the companies that make these trucks and trailers and for the environment in addition to our industry.”
Did you know?
According to the U.S. Department of Agriculture, truck rates in January from California’s Imperial Valley to New York are running as high as $10,000. In January 2017, the rate was about $6,000.
“We are seeing pressure for wage increases bonuses at unprecedented levels for teams and other drivers.”
– Avery Vise, vice president of research for FTR
In other news:
Housing starts drop in December
New housing construction fell 8.2% in December and residential permits also dropped, falling 0.1%, the Commerce Department said. (Wall Street Journal)
Ag rates have shippers rethinking expectations
Rising shipping rates have caused agricultural shippers to adjust expectations for freight costs in 2018. (AG Web)
Driver pay expected to be largest cost driver for fleets
Increasing driver pay to both attract and retain drivers is expected to be the largest cost pressure for fleets in 2018. (CCJ)
Old Dominion granted ELD delay to integrate system
LTL carrier Old Dominion has been granted a 90-day exemption from ELD compliance as it works through software compatibility issues in transitioning from a PeopleNet AOBRD to a PeopleNet ELD. (Transport Topics)
Rail, intermodal volumes mixed
Rail carloads fells 4.1% for the first week of January, led by decreases in coal and grain, but intermodal containers increased 5%. (Logistics Management)
ATA President Chris Spear touted the new tax law as a boon for trucking. Among his points is an ATA survey that found 50% of fleets plan to increase pay or issue one-time bonuses. Both are a boon to truck drivers, who have seen pay increase in the past year. How much higher pay goes remains to be seen, but it will be interesting to see whether that affects retention rates, which many believe is the real problem.
Hammer down everyone!
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