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American Truck Dealers calls on Congress to repeal federal excise tax on HD trucks

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American truck dealers calls on congress to repeal federal excise tax on hd trucks

WASHINGTON — As America has just celebrated the 100-year anniversary of the end of World War I, the American Truck Dealers (ATD) is calling on Congress to repeal the 101-year-old federal excise tax (FET) on heavy-duty trucks.

Initially imposed in 1917, the FET was meant to be a temporary measure to help pay for World War I. Although the tax was briefly repealed after the Great War ended, it was reinstituted and today is the highest percentage tax that Congress levies on a product. The FET routinely adds between $12,000-$22,000 to the cost of a new truck.

“The FET is as outdated as biplanes and trench warfare,” said Jodie Teuton, vice president of Kenworth of Louisiana and Hino of Baton Rouge. “This tax discourages deployment of today’s cleaner, safer and more fuel-efficient heavy-duty trucks.”

Two bills, H.R. 2946 and S. 3052, have been introduced which would repeal the antiquated FET. ATD and a coalition of trucking industry stakeholders are urging Congress to revisit this tax and consider the FET repeal as part of a likely infrastructure bill coming next year.

Sen. Cory Gardner, R-Colo., introduced S 3052, which is similar to the “Heavy Truck, Tractor and Trailer Retail Federal Excise Tax Repeal Act” introduced by Rep. Doug LaMalfa, R-Calif., in June 2017.

Gardner’s bill was referred to the Senate Finance Committee. LaMalfa’s bill was referred to the House Ways and Means Committee.

There has been no committee action on either of the bills.

Both Gardner and LaMalfa will be members of the new Congress that begins in January 2019 and would have to reintroduce their bills if no action is taken by the end of the current Congress.

“This burdensome tax creates excessive costs that are passed on to truckers, who play an essential role in maintaining our nation’s economy,” Gardner said. “I was happy to introduce legislation to repeal it.”

“The FET is not simply a barrier to selling more vehicles – it is a barrier to the public being able to drive alongside the cleanest, safest and most technologically advanced trucks built today,” said Jake Jacoby, president and CEO of the Truck Renting and Leasing Association. “To have a tax that literally discourages businesses from purchasing the newest available equipment hurts all involved – from the manufacturer, to the dealer, to the purchaser and ultimately the end user.”

Mike Kastner, managing director of NTEA-The Association for the Work Truck Industry, said, “The 12-percent federal excise tax on trucks and truck equipment primarily manufactured in the U.S. is antiquated, overly complex, and counterproductive to safety and environmental concerns. We advocate that this tax be repealed for the betterment of the work truck industry and the economy at large.”

“Now is the time to repeal the FET and replace it with a 21st century policy and revenue structure that meets the needs of our economy,” Teuton said.

ATD, a division of the National Automobile Dealers Association, represents more than 1,800 medium- and heavy-duty truck dealerships in the U.S.

CAPTION FOR PHOTO

The American Truck Dealers are using World War I era posters to encourage Congress to end the federal excise tax on heavy-duty trucks. (Courtesy: AMERICAN TRUCK DEALERS)

 

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Georgia seaports set new record cargo volumes in 2019

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Georgia seaports set new record cargo volumes in 2019
Georgia's seaports are reporting record cargo volumes that moved across their docks in the 2019 calendar year. (Courtesy: Georgia Port Authority)

SAVANNAH, Ga. — The amount of cargo moving through Georgia’s seaports reached record levels in the past year, in part because of continued growth fueled by larger ships traversing the expanded Panama Canal, the Georgia Ports Authority’s top executive said Jan. 28.

The state-operated ports in Savannah and Brunswick handled a total of 38.5 million tons of imports and exports in calendar 2019, the agency reported. That’s an increase of 4.3% compared to last year.

The number of cargo containers, large metal boxes used to ship goods from consumer electronics to frozen chickens, moving across the docks at the Port of Savannah also reached record highs last year. The port handled 4.6 million container units through December, up 5.6% from 2018.

Griff Lynch, the port authority’s executive director, attributed much of the 2019 growth to the expansion of the Panama Canal that opened nearly four years ago. He said shippers are still increasing the size of the vessels using the route, funneling more cargo to the East Coast.

“On the container side, I think it still comes down to the expansion of the canal,” Lynch said. “We’re still enjoying the fruits of that.”

Savannah is the fourth-busiest U.S. port for shipping containerized cargo, behind only the Port of New York and New Jersey, and the ports of Los Angeles and Long Beach, California.

The Army Corps of Engineers is overseeing a $973 million deepening of the shipping channel that connects Savannah’s port to the Atlantic Ocean to make room for the larger ships. Work on the projects second half began in September and is expected to be complete by the end of 2021.

A boost in automobile exports also helped to grow Georgia’s cargo volumes last year. GM and Volvo began exporting vehicles through Savannah last year, with Volvo also shipping cars through Brunswick. Overall, the ports moved more than 657,000 cars, trucks and tractors, up 2 percent from 2018.

Lynch said tariff increases last year during the U.S. trade war with China likely slowed the Georgia ports’ 2019 growth.

Now he expects Georgia to benefit after President Donald Trump signed the first part of a new U.S.-China trade agreement in which China has pledged to buy more U.S. agricultural products.

“We think that’s going to be a big deal for us,” Lynch said. “We’re already seeing it. Poultry is starting to move again, and that has been flat for several years.”

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ATA Truck Tonnage Index increased 3.3% in 2019

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Ata truck tonnage index increased 3.3% in 2019
After falling 3.4% in November 2019, the Truck Tonnage Index recovered in December, posting a 4% monthly increase. (courtesy: ATA)

ARLINGTON, Vir. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 3.3% in 2019, about half the annual gain in 2018 (6.7%). The increase was the tenth consecutive year in which the tonnage index has risen above the previous year.
The advanced SA For-Hire Truck Tonnage Index rose 4% in December after falling 3.4% in November. In December, the index equaled 118.2 (2015=100) compared with 113.6 in November.
“Last year was not a terrible year for for-hire truck tonnage, and despite the increase at the end of the year, 2019 was very uneven for the industry,” said ATA Chief Economist Bob Costello. “The overall annual gain masks the very choppy freight environment throughout the year, which made the market feel worse for many fleets. In December, strong housing starts helped advance the index forward.” It is important to note that ATA’s tonnage data is dominated by contract freight.
November’s reading was revised down slightly compared with the December 2019 data. In December 2018, the SA index rose 3%, which was preceded by a 2% year-over-year drop in November.
The not seasonally adjusted index, which represents the change in tonnage hauled by the fleets before seasonal adjustment, equaled 112.7 in December, 2% below the November level (115.1). In calculating the index, 100 represents the index from 2015.
Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

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ACT Research For-Hire Trucking Index: Rates slip amid strong holiday freight

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Act research for-hire trucking index: rates slip amid strong holiday freight
For-hire index rates slip, but signs of freight recovery in 2020 "encouraging" (©2020 FOTOSEARCH)

COLUMBUS, Ind. – The latest release of ACT’s For-Hire Trucking Index showed improvement in for-hire freight volumes and utilization. The data used in the Index included December. Respectively, the data indicated 55.5 and 52.3 diffusion index readings, both up four points from November on a seasonally adjusted basis. But even as for-hire capacity contracted again, the Freight Rates Index slid to 48.7 in December.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat level is 50.
Tim Denoyer, ACT Research’s Vice President and Senior Analyst commented, “We see encouraging signs that the freight downturn is in its late stages and the market will rebalance in 2020. However, the ongoing rate pressure, even as volumes ramped into the holidays, is symptomatic of ongoing excess industry capacity. Our survey respondents clearly get it, and reduced capacity for a sixth straight month, so we can pretty easily deduce that private fleet capacity additions through year-end 2019 are the main factor continuing to pressure for-hire rates.”
The ACT Freight Forecast provides forecasts for the direction of truck volumes and contract rates quarterly through 2020, with three years of annual forecasts for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months.
In 2019, the average accuracy of ACT’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide anticipated freight rates, helping businesses in transportation and logistics management plan with confidence.

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