Trucking Industry Likes Higher Fuel Prices — When They Help Truckers

To hear American Trucking Association (ATA) vice chairman Barbara Windsor tell the Senate environment panel today, truckers would face a grim economic future if the price of diesel fuel rises, as the ATA predicts would happen if Congress passes climate change legislation.

windsor1.jpgBarbara Windsor of the ATA, at right, with Sen. Kit Bond (R-MO). (Photo: ATA)

"If we have to add costs for diesel, I think we’d have a decline in jobs," Windsor told Sen. Jim Inhofe (R-OK), the senior Republican on the environment committee.

But for the ATA, more expensive diesel fuel isn’t always a bad thing — only when it results from putting a price on carbon.

The truckers’ group supports increasing the federal diesel fuel tax, which has remained static for 16 years at 24 cents per gallon, but only "so long as the revenue is not diverted to other causes," as ATA’s chairman explained this month.

So the ATA is in favor of putting a price on high-emissions diesel fuel, but only when the resulting revenue is used to advance transportation policies that meet with the trucking industry’s approval. What makes the truckers different, then, from any other D.C. interest group that lobbies tooth and nail for its own bottom line?

For one, the ATA-endorsed claim that the climate bill amounts to a "$3.6 trillion gas tax" uses inflated estimates that differ markedly from those used by the independent Congressional Budget Office (CBO) and the Environmental Protection Agency (EPA).

Both the CBO and EPA have found that acting on climate change would lead to fuel price increases of around 25 cents per gallon by 2030. Meanwhile, diesel prices rose by 56 cents per gallon over a span of just three months this spring, a phenomenon the ATA chalked up to oil speculators. (The ATA has yet to endorse Rep. Pete DeFazio’s [D-OR] proposal to tax oil speculators to pay for infrastructure improvements.)

Secondly, Windsor told the Senate today that as an alternative to passing the climate bill, the ATA would support continued use of SmartWay, a voluntary emissions reduction incentive program created by the trucking industry and the EPA. In fact, SmartWay is expanded in the Senate climate bill, with a competitive financing program established for the EPA to reward commercial shippers that use cleaner transportation methods.

Of course, such SmartWay financing would likely benefit electrified freight rail as a workable alternative to trucking, which now carries more than 80 percent of the nation’s freight, according to Windsor. Freight rail also stands to gain from the climate bill’s set-aside of nearly 3 percent of emissions "allowance revenue" for greener transport.

Perhaps, then, the prospect of competing with freight rail is driving the trucking industry’s climate stance as much as any anticipated increase in diesel prices.

  • Elana Schor has a warped view of truck vs. rail competition. First, the trucking industry is the rail industry’s biggest customer. When a trucking company has a load that can go by rail cheaper and better, the trucking company puts that load on the rails through its railroad or intermodal company partners. Second, trucking does not fear competition from railroads. Railroads do not go to 80 percent of the communities in the U.S.

    And the cost of land and construction, not to mention community opposition, will keep the rail network from being expanded to handle a large increase in freight. Rail expansion is limited to short connectors, multi-tracking of existing lines, and raising clearance heights to allow stacking of containers. In fact, the only way that railroads could expand in a big way would be to tear up all the walking and bicycling trails that have been created out of abandoned railroad lines and put ties and rails back down. Who is in favor of eliminating these bicycling routes?

    For the 20 percent of the U.S. communities that railroads do go to, trucking is rated much higher in quality, speed, performance and reliability than railroads. The trucking industry sees railroads as a vital part of the intermodal network and predicts that both trucking and rail will continue to increase the amount of freight they haul. Railroads will however remain the mode of choice for heavy, bulk freight such as grain, sand, coal and gravel, while trucking is the mode of choice for everything else.

    Ms. Schor promotes electrified freight railroads as a panacea but any rail expert or railroad executive will tell you that electrifying freight railroads across the country is a financial impossibility.

    Ms. Schor’s criticism of the trucking industry for offering to pay more taxes is nonsensical. The trucking industry is volunteering to give the federal government more money to support public infrastructure that is used by and benefits all Americans. It is fair for the trucking industry to set limits so that the money is not spent on museums and other non-highway projects. Compare that to what the railroads are doing. Railroads are spending tens of millions of dollars lobbying Congress to get it to give rails a tax benefit worth 25 percent of what railroads spend to improve their own property. Those are your tax dollars being used to improve corporate property that you cannot use unless you pay the railroads for the pleasure.

    In the real world, trucks and railroads work together to bring you what you need to live. Theoretically trucking could exist without railroads, but railroads could not exist without trucking.

  • Larry Roloston

    Thanks for the share. Recently however, many trucking companies have had the luxury of lower fuel prices which in return has lowered the price of shipping for many businesses. I know the

    Fleet Company

    that my business uses has been able to give my company some great rates on shipping.

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