Editorial: Incentives Matter

This Editorial appears in the Oct. 22 print edition of Transport Topics. Click here to subscribe today.

The dependably agreeable weather of Florida this time of year is an incentive for the industry to meet again in Orlando for American Trucking Associations’ annual Management Conference & Exhibition.

In another way of looking at it, central Florida’s attractions and the hotel’s marketing efforts form a package of inducements that motivate trucking people to gather at this particular place.

Incentives are a fundamental factor of economics, politics and personal behavior. In academic terms, an incentive provides a reason, often compelling, for preferring one choice to all the alternatives.

That incentives can be powerful probably can’t be better illustrated than what is going on with European trucking, as reported in a front page news article in the Sept. 24 Transport Topics: While U.S. sales of heavy trucks continue to sink because many American fleets are avoiding the latest emissions technology as long as they can, in Europe, sales are booming as truckers snap up similar technology so they can cash in on incentives, including tax breaks and reduced tolls.

European truck suppliers told TT various government-sponsored financial incentives, designed to help offset costs and encourage early adoption, will contribute significantly to what is expected to be a record sales year on the other side of the Atlantic.

In this country, the federal government prefers to nudge the market into a response. A very small number of Capitol Hill politicians have expressed interest in legislating financial incentives that would induce truckers to buy the latest emission-reduction technology, but the idea has failed to gather momentum.

Indeed, more attention at the federal level has been given to incentives for the purchase of safety rather than environmental technology — and even there, nothing concrete has been established.

The Environmental Protection Agency has pieced together a modest loan program under its voluntary SmartWay Transport Partnership. Also, several states have created varying incentives targeting new and retrofit truck equipment.

Not surprisingly, California has led the way, and recently Oregon — the state truckers love to hate for its tax and enforcement policies — sweetened its tax credits. Oregon also is home to Daimler Trucks North America.

But the resulting effect is not in the same league as what the Europeans have achieved.

Here, there are plenty of reasons to ask leadership at the highest level of government to study the European success.