In recent news, the Secretary of Transportation announced a potential increase in federal fuel taxes to help fund infrastructure – raising gas and diesel taxes, affecting expedited freight forwarders and all in freight transportation.
The federal fuel tax rate is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel. The tax is not indexed for inflation and has not been raised since 1993. And despite increased costs, representatives of the railroad and trucking industries appear to be supportive of the suggestion, according to Transport Topics.
As a user-based funding source, the increased fuel tax could benefit the transportation industry over the long-term. Freight transportation did not have its own budget until the 2015 FAST Act, though many industry leaders in freight would argue it’s not enough to work through the current list of projects and fund needed infrastructure in the future. This user-based system will provide a more sustainable funding stream outside of the federal highway funding.
Better infrastructure, provided by industries working together to fund projects for the common good, allows for a more incentivized community. Well-maintained infrastructure allows for our expedited freight forwarder company to deliver safely and on-time. We are seeing long overdue highway improvement projects causing traffic delays and congestions on major highways. We know that these improvements will eventually mean safer and better roads. A raise in the fuel taxes will affect the short-term but the long-term benefits will be exponential. We will continue to watch as Congress works to gain support for this tax increase.