Page 16 - ATR 4 2021 digital

BIPARTISAN BILL WOULD ronment, highway safety, manufactur- to existing customers. AAA Cooper
REPEAL EXCISE TAX ON NEW ing jobs and supply-chain efficiency. will make LTL the company’s second-
TRUCKS We thank Sens. Young and Cardin for largest segment, representing 14% of
Sens. Ben Cardin (D-Md.) and their bipartisan leadership in advancing the Knight-Swift’s revenue, behind only
Todd Young (R-Ind.) introduced legisla- a common-sense solution to the benefit truckload revenue at 63%.
tion that would undo a 12% tax on new of American truckers and the motoring “We targeted LTL because the
truck and trailer purchases in an effort public.” market is growing due to e-commerce
to modernize the freight industry. and supply chain trends,” Jackson said.
The bipartisan Modern, Clean and AAA COOPER LATEST IN “Driver retention is more favorable and
Safe Trucks Act of 2021 would repeal the GROWING LIST OF TRUCKING even though volumes can be cyclical,
federal excise tax, which is considered MERGERS the rate structure has less volatility.
among the highest percentage excise tax The first half of the year brought Additionally, the equipment has longer
levied on any product and has been in a slew of mergers and buyouts to lives, which can improve the free cash
place for more than a century. the trucking industry. Among them flow profile compared to full truckload
Critics of the tax say it deters were the sale of UPS Freight to TFI at similar operating margins. For these
investment in new technologies that International, CSX Corporation’s acqui- reasons, we believe LTL offers a strong
aim to modernize domestic truck fleets sition of Quality Carriers from Quality line of business to leverage as a growth
with cleaner power sources. Distribution and Hirschbach Motor platform.”
“Our tax policy is one of the most Lines acquisition of Lessors, Inc., a FTR Vice President of Trucking Avery
effective ways Congress can encourage nearly 300-truck reefer fleet. Vise said the transaction reflects a truck-
cleaner and greener technology. The The second half of 2021 is proving ing evolution wherein carriers are able
current federal excise tax has become an equally robust climate for merg- to offer diverse portfolios rather than
a barrier to the progress,” Cardin said ers with Werner Enterprises acquir- dominating single industry segments.
in a joint statement. “Our legislation ing an 80% equity ownership stake “We expect more transactions
will spur growth and competitiveness in Pennsylvania-based regional hauler where large truckload carriers pur-
while making our roads safer and less ECM Transport Group, and Knight- chase major regional LTL carriers and,
polluted.” Swift acquiring Dothan, Alabama-based perhaps, where large LTL carriers pur-
“The federal excise tax on heavy less-than-truckload carrier AAA Cooper chase major regional and even national
trucks is a relic from the First World Transportation. truckload carriers,” he said. “Trucking
War that’s now serving to keep cleaner, Knight-Swift CEO Dave Jackson remains far less concentrated than just
safer trucks off of our nation’s roads said on the investors call announc- about any other industry, so we could
today,” said Chris Spear, president and ing the acquisition that many of his see numerous such transactions with-
CEO, American Trucking Associations. company’s existing customers also ship out any real change in the industry’s
“By repealing this antiquated tax, LTL freight, so bringing in AAA Cooper overall competitiveness.” ATR
Congress can deliver a win for the envi- will allow them to offer more services

16 Issue 4 2021 | ARKANSAS TRUCKING REPORT