ATA chief Spear makes the case for infrastructure bill and trade agreements in NASSTRAC keynote

In a wide-ranging opening keynote at last week’s National Shippers Strategic Transportation Council (NASSTRAC) annual meeting in Orlando, Fla., American Trucking Associations (ATA) President and CEO Chris Spear laid out a compelling case for what is working in trucking, what needs to be worked on, and what needs to happen in order to overcome a heightened state of acrimony in Washington, D.C.

Addressing the latter, Spear said that in today’s political climate, advocacy in the trucking industry matters and is needed as the level of dysfunction and toxicity inside the Beltway could be viewed as unchartered waters, or a new low.

“What we find ourselves in right now is pretty unchartered waters,” he told the audience comprised of shippers and carriers. “We have not seen anything this bad in my 25 years in Washington. I say every year that it cannot get any worse and then it does. We need to look back to see what has led to this, what’s happened and what’s changed. It does not mean you have to agree with the environment we are in, but the need to understand is important.”

Going back 15-to-20 years ago, he explained it was possible for political parties to reach across the aisle and compromise on things to move legislation forward, something that is not nearly as attainable today.

“We need to find ways to make a consensus, things are very divided now,” he said. “Congress needs to be accountable to voters. The willingness to compromise has completely evaporated. We need to hold Congress accountable and let them know we expect them to do their job as we do ours,” he said. “Our members roll up our sleeves each and every day and go to work. This is not about holding dinners, raising money, or putting political points on the board. It is our responsibility as an industry to hold them accountable. Our voice matters and collectively it is very powerful.”

Looking at the current state of trucking as it relates to trucking, Spear said there are various ways in which President Trump’s agenda has helped to shape some of the ATA’s chief objectives.

One way in which this occurred is the White House’s infrastructure plan, which President Trump heavily campaigned on leading up to the November 2016 election.

“We have been working closely with the President and his staff on [infrastructure-related] things that align with our position,” he said. “But that does not mean that we should leave all infrastructure-related matters up to the states. That would be unconstitutional. Infrastructure could be a good centerpiece for our industry if we can get it done. This requires real money.”

But what the White House and Congress have offered up to date for infrastructure funding needs some fine-tuning, according to Spear.

“I don’t think the public-private partnerships and tolling schemes are going to fund a $1 trillion infrastructure bill,” noted Spear. “It requires throughput and a lot of people to make that profitable. Any business is not going to invest in a scheme like that if they cannot on the front end [gauge] if it is going to be profitable or not. We have sound data that states tolling is only profitable on less than 1% of the nation’s roads and bridges…and cost upwards of 35 cents on the dollar to administer.”

This further reinforces the need for a functional Congress and a strong federal partnership and leadership, with the ability to administer, as more than half of U.S states lack the administrative ability to oversee their own infrastructure efforts, he said.

As for viable alternatives for funding infrastructure, ATA is advocating for a $0.20 per gallon gasoline tax increase at the rate of $0.5 per year over four years, equating to a savings of $340 billion over ten years.

“This is real money and it can immediately go into the Highway Trust Fund and does not add 1 cent to U.S. debt,” Spears noted. “If you can point out one other proposal that does all those things, I am all ears. The fact is there isn’t one.”

Spear also dismissed VMT, or vehicle miles traveled, as a way to bridge the infrastructure funding gap, noting that in states where it has been tested, like Oregon, admit it is not ready for widespread usage and it is at least ten years out from successful deployment.

“We believe our proposal is sound policy and resonates with the President, and he has signaled he is open to the user fee [gasoline tax] increase against the recommendations of his own staff,” said Spear. “It is one thing to Tweet it. He needs to get on the Hill and push for this. Meanwhile, I am confident we can get a robust infrastructure bill funded in 2019. If this were to occur, it would be a tremendous boost to our economy. Trucking alone loses $63.4 billion a year to congestion, which equates to 362,000 sitting idly for an entire year.”

This, again, leads to the challenge of alleviating this situation and moving freight.

“When we are moving 71% of domestic freight in this country, our ability to grow really depends on sound infrastructure,” explained Spear. “We have taken a lot of time to educate people on the Hill about this….but we really need to turn up the volume and amplify this story. I guarantee the benefits of that alone will be tremendous.”

As of an example of how this can work, Spear cited the recently passed tax reform law, which took one year to complete from start to finish. And that bill has seen $3.8 billion reinvested back into the trucking industry in the form of wages, benefits, and new, safer, and more environmentally friendly equipment, Spear pointed out.

Looking ahead, Spear said another key issue needing attention is trade. He made it clear that the White House’s position on NAFTA does not align with the trucking industry’s position.

“Our industry [handles] 76% of NAFTA surface freight, with 82% of border crossings from Mexico and 71% from Canada,” he said. “Any change in pulling out of NAFTA would be catastrophic for our industry…and for the U.S. economy. I don’t like the rhetoric that has come out on this and don’t disagree that NAFTA is dated. It does not have a lot of the labor and environmental agreements we have enjoyed over the last ten years, so it does need some changes. We concede that, but don’t threaten to walk away from your largest partnerships with Mexico and Canada. I am hoping that we will be able to reach an agreement in principle by the end of the year and put the matter behind us. Having certainty in our environment matters. The longer these negotiations drag out, the more rhetoric that is tossed around results in more stability we will find ourselves in. My members are feeling it. A lot of business models really depend on the free flow of goods between Canada and Mexico.”