PMTA Association Updates

Megan Magensky, Pennsylvania Motor Truck Association, Director of Communications
March 2024

The State of Freight: 2024 Freight Shortage

The trucking industry has been overcoming significant challenges over the last several years, and it already appears 2024 will be no exception.

Early reports predict a freight shortage in 2024 created by economic demands that may impact job stability and consumer prices.

According to the American Transportation Research Institute (ATRI), the economy was the trucking industry’s top concern in 2023. From rising interest rates, high diesel prices and falling freight demand, the economy beat out the driver shortage and lawsuit abuse for the number one spot.

This economic uncertainty is affecting both freight demand and operational costs.

The industry is still dealing with effects of the COVID-19 pandemic. Disruptions to the supply chain led to increased demand for freight transportation services and backup at the ports. As a result, shipping costs have increased, and some businesses are passing this cost increase to their consumers. A significant driver shortage remains as the industry grapples with an aging workforce, barriers for young people and underrepresentation of women aiding in the potential for significant gaps in freight capacity.

Carriers are also dealing with a part shortage. When demand for parts goes up, costs often follow, leading to even thinner profit margins.

The good news… Ultimately, ATA predicts an increase in the trucking industry by 6% in 2030. It is not predicted that drivers will lose their jobs. There is significant demand for qualified drivers. As we saw when the Yellow Corporation closed their doors in 2023, trucking associations and companies rallied around the drivers laid off to find them quick employment. And, as the world continues to recover from the COVID-19 pandemic, there will be increased demand for freight movement, which will require drivers.

In addition, transportation and warehousing are predicted to be among the fastest-growing sectors for the decade, according to the U.S. Bureau of Labor Statistics. This is predicted to fuel solid job growth in industries tied to the field of logistics.

In Pennsylvania, the Department of Revenue decreased diesel tax rates for 2024 from $0.785 per gallon to $0.741 per gallon. This will result in a cost savings for carriers.

ATRI has identified solutions to help trucking companies during this time of economic uncertainty.

First, identify and promote reforming or repealing burdensome regulations that increase industry costs without providing benefits. For example, research has proven the California Air Resources Board (CARB) Advanced Clean Truck rule would decrease the amount of weight a truck could haul to make room for the battery meaning more trucks would be needed to haul the same amount of freight. This would raise costs for carriers while reducing environmental benefits.

Next, quantify the impact of increasing trucking operational costs on the supply chain and nation’s economy. As trucking industry costs increase this impacts the entire supply chain ultimately getting passed to the consumer.

Third, advocate for reshoring and near-shoring of equipment and parts manufacturing to reduce reliance on international supply chains. Bringing manufacturing back to the U.S. through targeted federal investment would reduce the potential for cost increases and delays along the supply chain.

America is heavily reliant on trucks, and that will not change anytime soon. If trucking companies can remain flexible, as they have always been, the industry will navigate these challenges and ensure a resilient and adaptable future for trucking in the future. 

Shapiro’s 2024-2025 budget addresses infrastructure, education and marijuana

Pennsylvania Governor Josh Shapiro presented his 2024-2025 budget proposal to the general assembly February 6.

He says he hopes the Commonwealth will prioritize economic opportunity, access to higher education, public education and law enforcement all without raising taxes and maintaining a surplus of $11 billion.

At the beginning of his address, Shapiro noted that Pennsylvania is the only state in the country with a divided legislature calling on both parties to compromise to get something done.

Shapiro called attention to Pennsylvania’s “rainy day fund” saying while it’s important to prepare for an emergency, ratings agencies have said there is too much money sitting in surpluses around the country instead of being driven out into communities. He said he wants to use that money as an investment.

Shapiro said that investment should begin in the classroom and lead to a life of opportunity and a retirement with dignity.

He referred to the 2023 Commonwealth Court decision that ruled Pennsylvania’s education funding unconstitutional. Shapiro said the new budget will give $1.1 billion increase in funding to schools, ensuring no school gets less than they did last year, and that the money is distributed in a more equitable manner. $900 million of that will be distributed through a new adequacy formula.

Shapiro also addressed an “elitist attitude” towards post-high school decisions he’s noticed in the Commonwealth. He said we should treat trade careers with the same level of respect as someone who chooses to go to college.

The budget calls for a $2.4 million increase in Career and Technical Education.

Another $2 million will go to help businesses transition to skills-based hiring practices to ensure those without college degrees aren’t overlooked and can still find family-sustaining jobs.

Shapiro announced plans to create a new “Career Connect” program that would create thousands of internships and connect employers with young people.

$2 million will build a digital location for career, education and training resources.

He also announced a three-part plan for higher education uniting Pennsylvania State System of Higher Education schools with Pennsylvania’s 15 community colleges. Shapiro said he hopes colleges will create pathways to get affordable credentials and degrees that meet the needs of the workforce. $975 million (a 15 percent increase) will go to this new system.

He plans to increase the Department of Labor and Industry’s investment in Industry Partnerships by $2.2 million to support workforce development and workforce needs of Pennsylvania’s workers and businesses.

$1.2 million will support labor law compliance to protect law-abiding businesses from unscrupulous competitors. 

In terms of economic development, Shapiro created an economic development strategy that focuses on five sectors: agriculture, energy, life sciences, manufacturing and robotics and technology.

He proposed a $500 million bond to develop sites for plants to bring businesses to Pennsylvania. He says the added revenues from the companies will pay back the bond.

$20 million will go to large-scale innovation and leverage Pennsylvania’s research and development assets.

$3.5 million will go towards creating the Pennsylvania Regional Economic Competitiveness Challenge to provide different regions with the resources they need to plan and implement economic development strategies.

$25 million will establish a new Main Street Matters initiative, supporting small businesses and downtowns in PA.

Shapiro stressed the importance of agriculture to Pennsylvania’s economy and said he wants to help farmers take advantage of the latest equipment through Ag innovation funding and protect livestock with $5 million for state animal testing labs to prevent disease outbreaks.

The budget proposal invests $10.3 million in agriculture innovation to support and attract new agriculture businesses, including energy and conservation endeavors.

$5.6 million will reform the Dairy Margin Coverage Protections offered to dairy farmers and dedicate a new Dairy Development Specialist to advocate for and help promote the Pennsylvania dairy industry.

$125 million will go to infrastructure and Shapiro plans to continue to decouple state police funding with infrastructure funding. He says this will put both parties on stronger financial footing.

This budget proposes to decrease overall State Police reliance on the Motor License Fund to $250 million and further reduce the reliance on the Motor License Fund by $125 million annually until the support is eliminated in 2026-27.

The budget allocates $48.5 million for Pennsylvania State Police (PSP) to maintain fleets and helicopters, train new cadets and combat gun violence.

Shapiro plans to increase spending on public transportation by $283 million. $161 million will go to SEPTA, bringing the total amount of state funding to $1 billion.

Under Shapiro’s proposal, new funding would be dedicated to support historically disadvantaged (small, diverse) businesses.

Shapiro also announced plans to raise the minimum wage to $15 and legalize marijuana. He says in both cases we’re losing out to neighboring states.

He said legalizing marijuana would bring in more than $250 million in annual revenue. He plans to expunge the records of those convicted for nonviolent possession of small amounts of marijuana and allocate $5 million in restorative justice initiatives from adult use cannabis proceeds.