The trucking industry was one of the stronger proponents of the tax overhaul that President Donald Trump signed into law in December.
The American Trucking Associations joined Trump at an event in Harrisburg, Pennsylvania, in October to call for a new tax plan before the end of the year. On Dec. 20, the day the Tax Cuts & Jobs Act was passed by Congress and sent to the president, the ATA issued a celebratory news release.
“America’s economic engine has been ignited,” ATA President and CEO Chris Spear said in the statement. “President Trump has said that ‘when trucks are moving, America is growing.’ With his signing of this bill into law, there will be more trucks on our roads, making the deliveries fueled by an expanding economy.”
At least two Arkansas trucking companies already have responded to the tax reform plan.
The executive compensation committee of USA Truck Inc. of Van Buren voted Dec. 29 to guarantee bonuses for its executives. The company’s award of what are, in essence, 2018 bonuses before the end of the year helped USA Truck by allowing it to claim deductions in 2017, before a reduction in corporate tax rates.
The beneficiaries of the early bonuses were CEO and President James Reed, Chief Commercial Officer Jim Craig and CFO Jason Bates. USA Truck said Reed would receive $200,588, Craig would get $131,636 and Bates would get $84,623.
USA Truck reported third-quarter profits of $409,000 in November, which snapped a string of six consecutive losing quarters. Reed said he expects the company’s performance to continue to improve.
The company created a bonus pool that it said would allow it to deduct the amount in the pool for the 2017 tax year. By March 15, the company said, it will award the bonuses — provided that certain performance standards are met.
If any of the executives’ performances exceed the standards, the executive will be paid more than the bonus already set aside; if any of the executives fail to achieve the performance standard, they will receive the guaranteed amount regardless.
If any executive leaves the company and forfeits a bonus, the amount forfeited will be distributed to the remaining executives.
PAM Transport Inc. of Tontitown announced last week that it will bump up its pay per mile for company-employed drivers and independent drivers. The increase could be as much as 40 percent but will be weighted according to the driver’s experience and route, the company said.
PAM CEO Dan Cushman said the company has wanted to raise pay for a while, but tough market conditions stood in the way.
“We anticipate the strengthening customer demand will drive rate improvement in 2018 and, coupled with benefits from recent tax law reform, allow us to give this long-overdue increase,” Cushman said.
Coincidently, of course, Spear appeared in front of a Senate subcommittee on Dec. 20 — the same day the tax bill passed — to call for more highway infrastructure investment. Any regular reader of this space or anyone who has ever driven anywhere should be familiar with the massive and expensive problems bedeviling the country’s infrastructure.
“ATA’s proposed solution is the Build America Fund,” Spear told the Transportation & Infrastructure Subcommittee of the Senate Environment & Public Works Committee. “The fund would be supported with a new, indexed 20-cent per gallon fee built into the price of transportation fuels collected at the terminal rack, which will generate nearly $340 billion over the first 10 years. This proposal will stabilize the trust fund for many years and provide the resources necessary to reduce the project backlog.”
The federal fuel tax hasn’t been raised since 1993, and the Highway Trust Fund spent more than $9 billion more than it raised in 2016. The American Transportation Research Institute, which collects and analyzes data for the trucking industry, released a 63-page report on Nov. 8, “A Framework for Infrastructure Funding,” which said a 20-cent fuel tax increase would still leave the Highway Fund short by $730 billion by 2026.
Trump spoke of a massive infrastructure program while campaigning, but the idea has since lost steam as a White House priority. For trucking companies, an improved infrastructure could result in drastic expense savings on fuel, maintenance and delays.
