2009 Stimulus Bill and Highway Bill

Although the economy continues to be mired in deep recession, one silver lining has come through the federal government's nearly $800 billion stimulus package: $100 billion has been appropriated for transportation

infrastructure. Even though this includes funding for projects as diverse as port expansion and public transportation, railroads and especially truckers stand to be the big commercial winners. This is because the largest portion of dollars are targeted for highway and bridge improvements as well as shovel-ready projects with the intent of alleviating urban congestion.

In fact, according to the Texas Transportation Institute, 4.2 billion hours and 2.9 billion gallons of fuel are lost to idling in congested traffic. And then there is the simple fact that all of these infrastructure projects create additional freight that will need to be hauled, another benefit for railroads and truckers.

In addition to the infrastructure enhancements, there are several accounting allowances included in the stimulus bill that will benefit a broad variety of businesses -- including trucking companies. It also contains other tax breaks that specifically target capital-intensive companies, such as asset-based carriers.

Even before the stimulus package became an economic reality, 2009 was shaping up to be an important year for the transportation industry due to the renewal of the multi-year highway authorization bill. There is strong sentiment in Washington DC for a long-term, comprehensive, truly national plan.

With estimates of up to $500 billion dollars -- more than double the expiring bill -- the American Trucking Association (ATA) has been lobbying for changes to federal weight and length limitations in exchange for an increase in tax revenue levied on the industry.

The seven proposals the ATA recommended in testimony before Congress in the summer of 2008 are:

1. Allow western states to harmonize longer combination vehicle (LCV) laws and regulations.

2. Allow states to authorize 6-axle, 97,000-pound tractor semi-trailers.

3. Remove gross weight limit on 5-axle combination vehicles.

4. Allow limited expansion of LCVs beyond western scenario states.

5. Standardize 53-foot trailer length.

6. Allow states to authorize double 33-foot trailers.

7. Allow a 10% axle and gross weight tolerance for auto transporters.

Implementation of even a few of these proposals would represent a productivity boon for both the trucking industry and shippers alike, particularly those with heavier loads.

And the proposals have been gaining momentum since President Obama has taken office. In his first address to Congress, the president singled out investing in national infrastructure, reducing dependence on foreign oil, and aggressively addressing environmental issues -- such as CO2 emissions -- among his top priorities. The ATA's weight and length proposals have the potential to favorably impact each of these initiatives.

So despite the current bleak outlook, there may be ample reason for the industry to have a positive outlook in the long term. However, the magnitude of the economy's problems in the short term means there are likely to be fewer carriers around to reap the benefits.

More Transportation Resources

Blog post: Truck Transportation Transformation: Brief Thoughts on a Weighty (and Lengthy) Subject

Podcast: Transportation Cost Reduction
Find out how how to reduce transportation costs by developing near-term goals while also planning for the long term. In this podcast, Don Anderson, VP of Transportation Services at Tompkins Associates, shares a case study where a multi-million dollar cost savings was found. See listening options and text transcript.

Read the article, Three Key Ways to Reduce Transportation Costs