Truckers: Carbon tax will raise prices everywhere

Truckers: Carbon tax will raise prices everywhere
Although Initiative 1631 would place a $15 per-ton fee on many carbon emitters in the state, Washington trucking members say it would ultimately raise prices on anything transported by their vehicles or reduce profitability in an industry that already has low margins. Photo: educateddriver.org

The proposed $15 per-ton carbon tax via Initiative 1631 is portrayed by supporters as a way to reduce pollution in Washington state by placing the financial burden on the biggest polluters. However, trucking industry members say the state-level tax would ultimately raise the cost of any product transported at some point by their vehicles; practically everything.

“Somewhere along the line, a truck has touched it,” Washington Trucking Associations President Frank Riordan said. He is also the owner of Tukwila-based Becker Trucking Inc. “Look at anything in your office right now. I can point to where a truck brought it in somewhere. A truck brings it to the train and a truck brings it off the train. When it comes off a ship, it goes onto a truck.”

WTA Executive Vice President Sheri Call told Lens that “everything you touch, everything you see at some point or another spent time on a truck.”

In Washington, 16,670 trucking companies directly employ 138,770 people. But their full impact on the state economy is reflected in their role in the transportation sector. They move 80 percent of the total manufactured tonnage in the state, and an equal percentage of Washington communities “depend exclusively” on those truckers to move their goods.

However, I-1631 would put Washington-based trucking companies at a competitive disadvantage with out-of-state carriers who don’t have to pay the higher fuel costs, Call said. That’s because vehicles can fuel up in states as far away as Utah, drive into Washington to deliver freight and then leave without having to refuel. Also exempt from the carbon tax would be fuel sold on Washington tribal lands, though the initiative states “the fee may be included” on that fuel in new agreements between the state and tribes.

It’s a similar problem between the U.S. Canada that the International Fuel Tax Agreement aims to rectify, in which carriers file a quarterly fuel tax report that determine how to redistribute taxes from collecting jurisdictions. However, I-1631 would not create that agreement between bordering states like Oregon and Idaho.

“There will be companies unable to pass those costs along strictly due to competition from out of state,” Call said.

That creates a serious dilemma for companies with low profit margins, though it has increased in recent years. “Trucking has always been a tight industry,” Roirdan said. “What most people don’t realize is even a good operating modern fleet like ours, we’re at six-miles-per-gallon (fuel efficiency). We buy many thousands of gallons. Adding 14 cents a gallon (increase) when you’re at a six-miles-a-gallon (fuel efficiency), and you can see what that breaks down to per mile.

“If you don’t recoup, your profitability is down and with tight as margins are, what do you do to a business?” he added.

For the companies that can pass on the costs, Call says “think about every single potential way that a truck touches your life whether you realize it or not. It will raise consumer prices, and I don’t think consumers necessarily see that.”

Like the position held by the Association of Washington Business, Riordan says the only way to make a carbon tax fair is by applying it throughout the whole country. “It’s just kind of an unjust tax in that you hit one group of people in one state. If we had it at a federal level…. then it’s a level playing field.”

Riordan also points to efforts within the industry to reduce emissions. A 2017 guide by the National Cooperative Highway Research Program notes that “freight trucks have become significantly cleaner and more fuel efficient in recent years,” with emission rates at least 10 times lower than a truck from 2005, and 20 times lower than a truck from late 1990s.

The guide further notes that “while gains in fuel economy and GHG (greenhouse gas) emission rates have been more modest, today’s long-haul trucks are at least 20 percent more fuel efficient than their predecessors in the 1990s and earlier.”

“The air coming into most of them (trucks) are dirtier than what comes out,” Riordan said. “We’ve had all these improvements in technology. We’re already such a clean state.”

3 COMMENTS

  1. Initiative 1631 will reduce pollution, put a fee on the largest polluters, and invest the funds in clean energy projects such as solar panels on schools and electric buses for schools.

  2. How does the trucking industry currently cope with the regular volatility of diesel price swings which are a lot higher than this pollution fee would be, even if it were passed onto them? How would this be any different?

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