Truck freight generates more negative costs on society than are captured through taxes on tires, diesel, license fees, etc. I understand the reluctance to raise taxes on an important piece of the supply chain that moves almost everything we buy and use every day but has the government ever tried to subsidize rail freight instead?
And before I get jumped on for promoting government intervention in the markets; you could make a case that the government is already interfering by allowing trucks to externalize a lot of their costs onto the taxpayer (pavement damage, congestion, pollution, etc). I believe the government sees moving freight off the roads onto rail (and reducing the external costs of trucking) as a net societal benefit, but have they ever put their money with their mouth is? Or has it been more of a “well that’d be great if the markets worked towards moving freight via rail but we’re not going to get involved directly”.
Trucking pays its way through state fuel tax, federal excise tax, tolls, ton/weight mile taxes, municpal tax levies. Also income tax… trucking is far more labor intensive than rail, and each wage of course involves income tax as well as source deductions. Tack on the Heavy Vehicle Use Tax… the annual Unified Carrier Registration which is relatively new… and on and on it goes…
Both modes are heavily subsidized by the public, either directly or indirectly.
I suspect it is a much lower rate than on-road fuel is taxed, but the tax revenue most certainly does not go toward maintaining railroad infrastructure.
Toll roads are rare in Canada, and I believe a small minority (around 5000 miles) of major highways in the U.S. are tolled. 5000 miles sounds like a lot until you realize that the Interstates alone add up to over 48,000 miles.
What are the on-road vehicle weight tax rates in Canada? I have long believed that a weight tax would be a fairer regime (as heavy trucks/buses do a disproportionate amount of road damage per trip, compared to automobiles) but did not realize we already had one.
Income tax is not related to road maintenance or trucking costs, and those individual truckers or contractors who own their own companies (quite common out here) are able to write off a number of business expenses against their taxes, greatly lessening their final tax bill.
But just for fun, how does the total number of trucking employees compare to the total number of railroad employees, once you include track maintenance, signals, dispatchers and clerical or other office staff. Maybe even throw management into that total. I am sure that trucking still employs more people, but it is surprising just how many folks are needed to operate and maintain a railroad.
Road maintenance and construction employees are not to be included in the trucking total, as their wages come FROM tax revenue.
Trucking (in the US) employs roughly 8 million people directly… railroads employ about 250,000. Trucking is a much much larger industry… it generates some 750 billion a year in sales verses about 70 billion for rail…
Road tolls account for few miles indeed… but they’re on stretches of road that are generally most heavily used… the Jersey turnpike… the NY Thruway… alot of the bridges in the NE… check out just one bridge… truck tolls alone are about 75 million a year for the Ambassador Bridge… and that’s just one bridge. Overall tax revenue collected corresponds quite well to the size of the industry… best way to gauge it by feel is to get a room for a night alongside the I95… truck after truck after truck after truck… nonstop 24/7!
Part of the difficulty (going back to the OP) of converting truck to rail is that at present the two modes operate in different markets. Trucking is predominantly shorthaul door to door while rail is bulk longhaul. And on hauls of under 350 miles trucking becomes more efficient than rail, when taking into account first/last mile. It would take more than a tax restructuring to swing these short hop/regional loads over to rail… there would have to be a real business incentive in terms of lower cost or better service for it to happen.
The only taxes in Canada on inter-provincial / international trucks are fuel taxes based on where the fuel is consummed, pro-rated PRP and IRP license plates based on the % of total distance distance travelled in each jurisdiction in North America for the fleet. With regards to fuel in Ontario railways pay 4.5 cents/litre while motorists and trucking companies pay 14.3 cents/litre. Some of the jurisdictions like Quebec base their rate on the number of axles ( including the trailer) while others are based on the gross vehicle weights they are authorized to haul without being overweight on the axles of the tractor trailer combination. No licenses in Canada are calculated on the basis of ton-miles.
If a Canadian company operates in the US it is subject to the same rules as the US companies including paying the Form 2290 Heavy Vehicle Use Tax and the US Customs decal. Canadian companies have to file fuel taxes with all US jurisdictions just as they do to Canadian jurisdictions and the same is true for US companies operating in Canada.
Canadian inter-jurisdictional vehicles are allowed to purchase equipment repairs tax exempt and then pro-rate the tax due to each province based on the prior year’s distance travelled in each province. As a result the US miles become tax exempt for repairs on Canadian owned vehicles and trailers. Canadian companies must pay US sales taxes on repairs based on the taxes charged by the vendor on each invoice.
If you ignore income taxes, sales taxes, value added taxs like GST and HST, and payroll taxes in both the US and Canada there is not enough money left over to cover the cost of building and maintaing roads. This is especially true in Canada as a whole where we have longer winters, more snow and more frost damage and a longer distance between major centres of population with less traffic.
No trucking company or motorist pays the full cost of building and maintaining the full cost of highways in Canada and the same is probably tr
I don’t know (and probably no one knows) just exactly what portion of trucking taxes cover trucking use of the highways… some say its only a small fraction while others claim one could rebuild the interstate highway system every ten years if all trucking tax dollars were put back into highways. The truth is probably somewhere in the middle… Trucking has been the beneficiary of the public purse just as the railroad industry has. Enormous sums were invested to build the railways initially, and substantial sums are still invested into class 1 as well as shorline infrastructure improvements… dido for highways.
In any event those subsidies or investments (or whatever you want to call it) come back 'round to benefit the taxpayer in the form of lower rates and access to junk that we couldn’t otherwise buy without mortgaging our homes to the hilt. Arguably we all subsidize our transportation network, and in return we all get more affordable transportation. And cheap government subsidized transportation makes international trade possible… all those cheap items we like so much at Walmart and Target are courtesy of cheap transportation and cheap overseas labor… you can pay more at Walmart… or… you can pay more tax (some of which goes to prop up our transportation network) and less at Walmart… can’t have both.
You’re welcome to pay my bosses fuel tax bills anytime you want. Last year’s total was just over 1.6 million dollars. Plus 800000 to register all the equipment to run then throwing in tolls that we put out 2 million more for. This doesn’t include 5 million going out the door for insurance for the fleet 2 million more for employee health benefits plus 18 million dollars for fuel. We pay more than our fair share. The OTR industry is less than 10 percent of all vechiles on the road yet we pay on average 55 grand each year in highway taxes and fees of all types. The average car is less than 1 grand a year. Last year OTR trucks paid in 52 percent of all money into the highway trust fund. If you’re wanting to scream at someone start screaming at your state and federal government that by the time that money is disbursed for use on the highway less than 20 percent actually is used to repai
One could probably argue that one great disparity between railroads and trucking is that the railroads own and maintain their own ROW, and, in fact, pay property taxes on that land. In some areas, that property tax is seen as a gold mine, with assessed valuations in notable excess of neighboring lands.
It was noted that highway maintenance is on the backs of the taxpayers. That’s not always based on use - which means that I pay for that traffic control device whether I drive or not.
If trucking companies had to build and maintain their own ROW, things would get interesting.
The same can be said for the airlines, which often benefit from a local desire to have access to air travel, resulting in those local taxpayers footing the bill for much of the facility.
And that’s not much different from malls, where the “anchor stores” often get away with little or no rent, while the smaller stores make up the difference.
While it’s true that trucks are only a small percentage of the vehicles on the road they cause a truly outlandish percentage of the damage. An old government report found that an 80,000 pound truck caused as much pavement damage as 9,600 average passenger cars. I’ve seen that number disputed - saying that the multiple depends on the pavement type - but everyone agrees that a truck does thousands of times more damage per mile than a car. As a result, that 10% of vehicles is responsible for as much as 99% of pavement damage caused by vehicles.
So to use your example, if your trucks pay 55x more in taxes of fees while doing 9,600x more damage (and that’s per mile, so a big rig doing 80,000 miles a year is doing almost 77,000x more damage than a car driving 10,000 miles) then they’re getting off easy.
I agree with the sentiment that we’re either going to pay for the damage done by trucks through taxes or higher prices on just about everything we buy. But if we were to subsidize a shift off the highways and onto the rails we could save on congestion, green house gasses, and infrastructure costs. Obviously most shipments couldn’t make the shift but I’m sure there’s a reasonable amount of tonnage right there on the bubble.
So unless trucks are running on gasoline (are they? I thought they were almost all diesel?) I don’t think trucks are contributing nearly half of the highway trust fund revenue.
The per gallon fuel tax on both gasoline and diesel hasn’t budged since 1993…26 years! The American Society of Civil Engineers says a) road congestion costs Americans $160 billion a year in time and wasted fuel (3.1 billion gallons!) and b) we have a $836 billion backlog in road and bridge deferred maintenace.
500k OTR trucks paying an average 55 grand in highway taxes state and federal level comes to 27.5 billion a year to everyone. That chart you showing doesn’t have the state fuel taxes on them that in some states are double what they are on gasoline and we are required to pay them for every mile we rolled in that state regards of if we bought fuel or not. Pennsylvania charges 74 cents a gallon even if my bosses trucks don’t buy a gallon in there . We do 40 percent of our business with states that connect with Pennsylvania. Well let’s just say Harrisburg better like the check each quarter.
Roads cost money and somebody pays the cost. Everybody involved in this writes reports that promote their interest in the transaction. A person could spend their entire lifetime researching to find an objective truth in the matter.
It is a well-worn, but never convincing premise that if government subsidizes trucking; it is unfair that they don’t subsidize railroads.
If you really want to see more freight carried by rail instead of truck, figure out a way for rail to do that at enough profit to be worthwhile to them.
Let me ask you this: Do you think the railroad ind
Statistics are wonderful, and can be (ab)used to prove nearly every point of view. This debate is a case in point. Another approach might be to figure out how much private and commercial vehicles are paying by ton-miles, a common metric in railroading. This could also capture the heavy motor homes. And add in the lost opportunity cost for the property tax waived for the roadways.
Rail transportation is MUCH more efficient thant trucks. You can put a couple ofhundred containers or trailsrs on one train with a few diesel engines and run it crosscountry for far less per ton mile than you can with a truck. Each trailer needs on tractor to pull it vs rais 2 to 4 diesels/
With Trump in the whitwhosue you will NEVER see any government support for railriads.of any kind. Trucks are important , but they pollute a lot more than locomotives and trump won’t drop the tier 4 regulations for locomotives.
Every time I see a truck go by me on the interstee at 80+ miles perour smoking like crazy in a 65 mile per hour zone, I yell “PUT IT ON A TRAIN”.
Is that because the benefits of rail have an environmental component and he doesn’t want to be seen as bowing to climate change concerns? Or becausing trucking employs so many more people?
Trump talks about the need to fix our failing infrastructure and the left talks about the need to combat climate change. A more optimistic person might see shifting freight to rail as a bi-partisan goal (or as close to bi-partisan as anyone in Washington gets these days). Unless you’re a truck driver it’s a rare win-win in terms of economics and carbon reduction.
My boss strives to have the smallest carbon footprint he can possibly do that makes economic sense for his business. The new tank wash we just finished 90 percent off all the water is recovered and reused in the next wash cycle of a tank trailer. That’s after it’s filtered and deinionized first. All of the fleet has Apu units plus bunk heaters that lower our idle time. We run as much lighter material in our equipment as possible. Our bulk fuel in the yard is now a 50/50 biodiesel blend.
Backshop I can answer 1 for you really easy with a 3 part answer. First off is Customer SERVICE something the Class 1 Railroads have forgotten all about anymore. Unless your shipping trainloads of freight with them a day or weekly its like talking to the freaking moon to get a customer service rep on the phone. Not in the trucking industry. 2nd is Speed of service anything under 1000 miles door to door I am going to slaughter a train with speed of service and if I have a team I can beat even the fastest IM trains coast to coast without breaking a sweat on any city pair in the nation that is served by the railroads. My boss offers 30 hour service between Chicago and Salt Lake City with a team Truck. You think the UP can make it in that timeframe. 3. Last for us is ease of access no need for extensive capital outlays for switches trackwork and equipment to move cars around. All we
Interesting stuff, Shadow. It’s sad the railroads are so disinterested in customer service.
Regarding speed, do you think UP has to beat 30 hours for the Chicago to SLC run in order to be competitive? What if they could do it in three days with a high degree of reliablity? I always thought the bigger issue with rail wasn’t that it couldn’t deliver as quickly as truck (although that’s a problem when the difference is 30 hours vs 10 days) but that the window for rail was maybe +/- several days while truck’s window is +/- several hours. In other words, rail can’t be 5x slower and compete - but if it were within a day or two and had truck-like predictability of service they could do OK.
And finally, I think of trucks as having a ~500 mile per day range with the ELD mandates. Is that about right in your experience? A team of drivers can get a delivery to SLC 1,400 miles away but a single driver would take ~3 days. Does a team delivery cost twice as much? or more like 1.5x as much since only the labor piece of the cost puzzle is doubled?
And regarding the emissions restrictions: in 2016 Class 1 railroads used 3,385 million gallons of diesel while combination trucks used 29,555 million gallons. When you’re trying to reduce GHG emissions it makes sense to give extra scrutiny to the industry burning 9x more fuel.
