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Timing of trucking industry rebirth remains elusive: Graves

PHOENIX, Az. -- Phoenix proved an apt setting for the American Trucking Associations' annual conference.  The town's name signifies a rebirth from the ruins of the past, in much the same way that the large gathering of trucking executives...


PHOENIX, Az. — Phoenix proved an apt setting for the American Trucking Associations’ annual conference.  The town’s name signifies a rebirth from the ruins of the past, in much the same way that the large gathering of trucking executives who descended on the sun drenched city are hoping to see a resurrection of their industry.

The industry is poised for a turnaround after two years of hardship but as ATA president Bill Graves reminded everyone in his opening address, the timing of that rebirth remains a question mark.

“The timing of that rise back to profitability, back to robust freight volumes, back to the need for new trucks and trailers, back to having headaches over where to find drivers – the timing of that anticipated recovery keeps eluding us,” Graves said. “The timing of that moment has been speculated about for a good portion of the year, and now seems destined to be sometime in 2011.”

When the industry does re-emerge from its economic funk, it will be doing so during one of the most significant periods of transition since the deregulation days of the early 80s. Graves rhymed off a number of challenges ahead, including: CSA 2010, hours-of-service legislation, electronic logging, fuel efficiency standards, a yet to be determined new way to pay for infrastructure improvements, a transitional time of shifting to alternative power and fuel for trucks, continued assault on the independent contractor model, pressures to change the manner in which drivers are paid, and adapting to the nation’s growing need for capacity.

Improving the road infrastructure has long been a key driver of ATA lobbying efforts and Graves warned that although the US president is saying all the right words, the political will may still not be there to push through the required investment. He pointed to president Barack Obama’s recent push to spend $50 billion on infrastructure projects and his statement that “all that is needed is the political will.”

Graves said he couldn’t disagree more.

“There is a reason why you can’t do it, and it’s called political expediency,” Graves said. “The political will that’s needed to get this done is stuck in a bottleneck, an old fashioned political bottleneck that is the result of both political parties pandering shamelessly to voters – pandering the notion that one of the nation’s most pressing problems, one of the key elements of our nation’s ability to be economically competitive with the rest of the world can be solved by thinking outside the box or by using creative financing. That’s really their way of saying that making a tough vote to raise taxes in support of infrastructure investment is less important than their own re-election.”

World-class infrastructure costs money, Graves said, adding that anyone who claims privatization, securitization or monetization is the solution is missing out on the reality that all those strategies involve the collection of tolls and tolling is nowhere close to being as economically efficient as the raising infrastructure funds through the fuel tax.

And the former Republican Kansas senator had a warning for his Republican friends: “Tolling is not the Conservative solution for building roads and bridges.”

Another issue worth watching, according to Graves, is legislation aimed at encouraging fleets to convert to natural gas. There is to a vote in the US Senate this Nov. 17 on a bill that would provide financial incentives as a means to increase the number of natural gas-powered trucks on the road and to promote the build-out of natural gas refueling stations.

In his own address to the media later the same day, Daimler executive Martin Daum said financial incentives to encourage a shift to alternative fuels “is the only way to go.”

“You see significant savings with alternative fuels. However, the downside is that the savings do not allow for the recovery of the high investment costs,” Daum said, pointing out that government support would create the demand necessary to drive economies of scale that would eventually reduce production costs.


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