On March 31st the office of Joe Biden released the details for the American Jobs Plan. The entire press release clocks in at aabout 12,000 words. Reading it is a time-consuming project, but you can view it on the fact sheet webpage. For those who have better things to do (such as drive), here is a summary of things that may impact the trucking industry.
Bridge and Road Investment
The plan totals at approximately $2 trillion, and 115 billion is earmarked for this necessary work. The plan hopes to repair the most economically critical bridges in the nation, but also 10,000 other bridges that are in more need of repair.
Assuming this proposal gets off the ground it is a good start, but even by Joe Biden’s metrics, it is lacking. The section starts by mentioning 173,000 miles and 45,000 bridges that need repair, and even that is a low estimate when the American Society of Civil Engineers (ASCE) considers 4 million miles of road in need of repair. The Fact Sheet even cites the ASCE when referring to schools, so it could not be as though they were not aware of the opinion on roads.
The journey of a thousand miles begins with one step, but depending on just how long it takes to use the $20 billion, it might not even be enough to prevent buildup of the backlog.
Demand for Flatbed May Skyrocket
The key word in Joe Biden’s plan is investment: he hopes to spend money to make life easier for constituents. Such ideas include:
- Replacing lead piping with safer alternatives (potentially copper or PVC).
- Construction of more houses to lower the prices in the housing market.
- Clean energy, which does not directly elaborate but is implied to include water and wind.
- Retrofitting some buildings, but not to the extent of the Green New Deal.
- Increase broadband coverage nationwide.
- Upgrade/repair roadways, both for public transportation and cargo goods.
All of these, in one way or another, will require construction materials, and flatbed trailers are the standard way to haul them!
Much like the coronavirus vaccines increasing the demand for reefer trailers and raising rates, the increased demand for construction hauling should increase the price of all flatbed transportation. With broadband construction potentially also needing dry vans and reefers for more sensitive equipment, their rates may also increase slightly.
Corporate Tax Increases
If you are an owner-operator, this section might not affect you, but if you own a corporation or lease under the Authority of a larger entity, this almost certainly will.
Part of Biden’s plan to pay for all of this is to raise the corporate tax rate from 21 percent to 28 percent. Corporations may just take this hit to their bottom line, but more likely they will try to recoup some or all of the expense by raising prices on customers or demand lower prices on work such as truck hauling.
Joe Biden’s plan is simply a proposal to Congress, which needs to deliberate and vote on whether or not to move parts of or all of a bill that contains the proposals. With the Senate having a 50-50 split between Republicans and Democrats, it only takes one more democrat to defect from party lines than a republican for a bill to die.
We predicted for 2021 that increased infrastructure investment would be delayed for yet another year, and that is where we are keeping our chips for now. Still, we would love to be proven wrong.