Tax reform has led trucking companies across the nation to give pay increases to employees and invest into equipment, and recently, trade organization American Trucking Associations and its members promoted the impact of tax reform on the industry in front of President Donald Trump and Congress.
The reform allowed TCW Inc. of Nashville, Tenn., to give its drivers an average raise of nearly $3,000 per driver and increased their benefits. The company’s average salary for drivers rose to nearly $62,000 annually.
“These investments have had immediate impact,” said Dave Manning, president of TCW and chairman of the American Trucking Associations. “In the first quarter, we had our lowest rate of driver turnover in 30 years, all while growing our company by 15 drivers.”
Manning recently spoke in a Congressional roundtable about the positive impact of tax reform. TCW also was able to invest $20 million in new trucks, trailers and intermodal chassis.
“Our story is not unique in trucking,” Manning said. “Because of tax reform, fleets across the country are making new capital expenditures, re-investing in our people and putting more money in their pockets. This historic package has been a win not just for my company and my industry, but for businesses and workers across the country. Congress and President Trump should be commended for their leadership in getting it done.”
When asked about the impact of tax reform on carrier FedEx Freight, the company provided a link to a statement from Memphis-based FedEx Corp., the parent company of FedEx Freight. Following approval of the Tax Cuts and Jobs Act, FedEx announced it had committed to more than $3.2 billion in pay increases, bonuses, pension funding and increased capital investment. More than $200 million will go toward pay increases, and two-thirds of the amount will go to hourly employees by advancing annual raises for 2018 by six months to April 1, from the usual date in October. The remainder will go toward performance-based incentive plans for salaried employees. Also, FedEx will put $1.5 billion in its pension plan and invest $1.5 billion to expand the FedEx Express Indianapolis hub and renovate the Memphis SuperHub.
Several of the largest publicly-traded trucking companies in Arkansas declined to comment on the impact of tax reform. In December, Trump signed the Tax Cuts and Job Act, lowering the corporate tax to 21%, from 35%, and recently, several ATA members promoted the benefits of tax reform in a White House event. Executives and employees from Werner Enterprises Inc. of Omaha, Neb., Crete Carrier Corp., of Lincoln, Neb., and TCW attended the event to share how tax reform has allowed the carriers increase employee wages, equipment and improve operations.
“Putting truckers in a position to have their voices heard on important issues is a critical part of what we do at ATA,” said Chris Spear, president and CEO for the ATA. “Our industry could not ask for better representatives than these to talk about the benefits of the president’s tax reform package.”
As a supporter of tax reform, ATA hosted an October event to rally support for it, and Trump attended it. A January 2018 survey showed half of ATA member companies planned to increase pay or offer bonuses as a result of tax reform, and 47% were looking to invest into new equipment, such as trucks, trailers and safety technology. Over the past three months, Crete driver Jeff Tetzloff said he’s received over $4,000 in raises. Werner driver Quinton Ward said as a result of recent pay increases, he and his sister were planning a family cruise.
“The extra money in my check provides me an my family freedom and flexibility,” Tetzloff said. “Also, the significant increase in my company-provided profit sharing and 401K plan provides me additional retirement security, lessening my dependence on Social Security.”
“To fully understand the true size and scale of this law’s impact on our company, I point to some concrete numbers: We have increased our capital expenditures for 2018 by $127 million, or 64%, over the previous year — 90% of which was for newer and safer trucks,” said Derek Leathers, president and CEO for Werner. “For our employees, we are increasing driver pay by more than $24 million — an average increase of $2,400 per driver.”