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How the Election Year Will Impact Your Trucking Company

September 18, 2012 By Sozo Staff

From policies to regulations, the trucking business has always been influenced by politics. Whoever is elected this November, there is no question that the trucking industry will feel the heat. The good news is that, either way, it will take a while for the changes to take effect.

In a recent issue of Fleet Owner, former Federal Motor Carrier Safety Administration official Annette Sandberg observed that election years are usually accompanied by a break in federal regulatory activity. Incumbents are cautious about taking on any new causes that may shake up their campaign, so new regulations are put on hold. If the opposing party is elected, regulatory activity will be stalled while a new cabinet is formed. While it may sound counter intuitive, an election year can provide a relatively stable atmosphere in a highly regulated industry.

Limited Legislation

Two of the most anticipated trucking industry regulations – the Highway Reauthorization Bill and the legal requirement of electronic onboard recorders – likely won’t make an appearance any time soon. Sandberg noted that reauthorization probably wouldn’t occur for 1-2 more years, while EOBR regulation could be put on the back burner for as long as 5 years.

Changes in Demand

While regulation takes the backseat during election years, the election process puts many entrepreneurs on the fence about major business decisions. Because owners and investors can’t accurately predict future taxes and policies, they may wait after the election to make their plans. As a result, the number of companies changing hands will likely decline. With buyers hesitant to pull the trigger on trucking companies for sale, the supply of businesses may rise while prices fall. If you’ve been waiting to grow your existing trucking company through an acquisition or by merging with a competitor, the time before and just after a presidential election may offer the deals you’ve been waiting for.

New Incentives

From the role employers will play in employee retirement savings to the possible adjustment of the federal business tax rate, there are many election-year issues that stand to impact the owners of medium and small trucking businesses. However, it will be impossible to know how your company or investment plans will be affected until after the dust settles in November. If you’re considering making a significant change such as exiting the market or making a major reinvestment, don’t wait until the end of the year to do your planning. Instead, flesh out several scenarios based on different outcomes. Remember, while business value fluctuates with the economic climate, it is ultimately based on assets, earnings, and a particular buyer. With help from the right truck business brokers, it’s possible to maximize value – and your sale price – no matter who is in the White House.

Filed Under: Transportation

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