“One misconception is that entrepreneurs love risk. Actually, we all want things to go as we expect. What you need is a blind optimism and a tolerance for uncertainty.”
Entrepreneur Drew Houston, best known as the founder of Dropbox, a file-sharing service, uttered those words. But his words perfectly explain the environment trucking executives find themselves in 2017.
Putting aside profitability for a moment, my father used to tell me that businesses are less concerned about the rules they operate under, and more concerned that they know what those rules are. Certainly, those rules may price some companies out of business—the public will only pay so much for goods—but when there is rule uncertainty, businesses become reactionary and that is not a long-term model for success.
The election of Donald Trump as president with Republican control of both houses of Congress has thrust much of the country into an era of uncertainty. Many people voted for Trump believing in his message of change. But with change comes uncertainty.
How will Trump govern? Will he follow through on his promise to crack down on outsourcing of jobs and place tariffs on foreign goods? What impact will that have on freight movement in this country? Those are just a couple of the questions. Until we know, we really don’t know anything.
Domestically, there are questions about what regulations may be rolled back. According to The Hill and New York Magazine , these could include the federal overtime rule, Obamacare, and rules related to climate emissions.
If Obamacare is repealed, what impact will that have? Under the law, businesses with more than 50 full-time equivalent employees are required to provide healthcare plans. But how many know that businesses with fewer than 25 full-time equivalent employees (according to some estimates, as much as 96% of all American businesses, including thousands of trucking companies that fall into this category) could receive tax credits if they provide insurance to their employees?
If your business offsets a healthcare offering with that tax credit, and if the plan the Republicans and Trump come up with doesn’t include this option, you may see a sudden, dramatic rise in your employee healthcare costs. Do you just eliminate the benefit? Eliminating benefits is not the ideal employee retention tool.
Truck OEMs and component manufacturers are concerned about the implementation of Phase 2 greenhouse gas regulations, which are set to be fully phased in by 2027. There has been widespread speculation that Phase 2 could be dismantled before it ever gets started because of the beliefs of some Trump cabinet picks, and even Trump himself, that climate change regulations are job killers.
What about Trump’s campaign promise to revive the coal industry? Whether the coal industry can be revived has been hotly debated since the election, but when combined with Trump’s pro-drilling approach to oil, is it any wonder that some in the alternative fuel industry are worried?
While natural gas as a vehicle fuel remains a small portion of the mix, there are plenty of fleets that have bet big-time on the fuel as a cleaner and more cost-controlled choice over diesel. And even though electric trucks remain a small minority, several manufacturers, Daimler Trucks chief among them, have announced plans to bring new electric truck models to market in the next few years. Key to their adoption will be tax credits and grants, both of which could be in jeopardy under a Trump administration.
The big question now is whether all these investments in fuel efficiency will continue if the landscape changes and there is no longer a long-term price advantage over diesel? Does the industry share that blind optimism and tolerance for uncertainty that Houston spoke of? We will soon find out.
