Dedicated Revenue Mechanisms for Freight Transportation Investment (2012)

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B-1 Which Vehicles Do We Tax? It is common to divide transport activities into “freight” and “passenger.” For purposes of this analysis, “freight,” or “goods movement,” is defined as trips undertaken to move goods that are or could be routinely accomplished by a for-hire carrier. “Goods” in this sense is broadly defined to include waste products, recyclables, empty containers and pallets, returned merchandise, equipment, by-products, and similar commodities being transported. Vehicle movements that do not involve loading or unloading goods would not be freight trips. This definition leaves some unavoidable ambiguity, especially in agriculture, construction, and related services. As shown in Table B-1, a large portion of the medium and heavy trucks in use do not haul either freight or passengers, but are used in the provision of services. The majority of the U.S. fleet, about 60%, is in mixed-use sectors, notably construc- tion. Not only is there a mix of freight and service vehicles in these uses, but there are many multipurpose vehicles, such as flatbed trucks, whose use can vary from day to day. The Greyhound Bus Company, whose vehicles are not classified as trucks, offers package service on some of its routes and thus could be considered a freight carrier. For the fuel tax and VMT fee alternatives, a substantial part of the implementation, compliance, and collection costs would be incurred in identifying freight vehicles. Most highway projects that would benefit freight-hauling trucks, however, would likely also benefit service and mixed-use trucks that may actually constitute the majority of medium- and heavy-duty vehicles. Examples include bypass or climbing lanes for trucks, rail grade crossing separations, and truck rest stops. Non-highway modes do not entail the same level of com- plexity. On inland and coastal waterways, some ferries carry both passengers and their vehicles. There are also a very few coastal vessels that routinely carry both passengers and cargo, but their impact is likely to be negligible. On the railroads, the only significant operations that mix passengers and freight are Amtrak trains. Some long-distance Amtrak trains carry express shipments, and the Auto Train carries both passengers and their automobiles. Although a large portion of air cargo moves on passenger planes, there is already an air cargo excise tax that is independent of aircraft type. Freight Truck Types There are a number of vehicle classification systems in use. The most universal is the GVW system shown in Table B-2. Commercial truck use and the working definition of “truck” for planning and policy purposes usually begins with Class 3 vehicles, which are those with gross (vehicle plus load) weights of 10,001 to 14,000 lb (see Figure B-1). Class 1 and 2 vehicles are primarily pickups, vans, and SUVs used for personal transportation or the very lightest service and delivery purposes (e.g., a landscaper’s pickup or a flo- rist delivery van). Many light-duty “step vans” used for local delivery are actually Class 2 vehicles. Class 3 vehicles include the largest pickups and vans ordinarily used for personal transportation and the smallest trucks routinely used to carry goods, supplies, and equipment. Classes 4–6 are considered medium-duty trucks and, while predominantly used to pro- vide services, also encompass step vans, flat beds, small dump trucks, and other trucks used to move freight. Classes 7 and 8 are heavy-duty trucks predominantly used to move freight, but these classes also include concrete pumpers, well-drilling units, and other large service vehicles. Classes 4–5 are typically considered light- and medium-duty trucks and encompass larger “step van” delivery vehicles and a wide variety of other applications. In particular, Classes 4–5 include a very large proportion of trade, construction, and service vehicles that do not ordinarily haul freight in significant quantities, but which use the same infrastructure. Discussions of freight user fees and freight infrastructure tend to ignore A p p e n d i x B Defining Freight Vehicles

B-2 the very large population of medium-duty trucks and service vehicles. Class 6 is an overlap category, encompassing large trade and service vehicles, many straight truck freight vehicles, and the smallest tractors routinely used to haul freight in semi- trailers. In most states, Class 6 vehicles are the largest that can be driven without a CDL, making them popular for local trucking. Properly configured Class 6 vehicles can accomplish many of the tasks assigned to Class 7 and 8 vehicles. Where trailers are partially loaded or loaded with very light goods, the full gross vehicle weight rating of Classes 7 and 8 may not be required. Classes 6 and 7 include heavy-duty service vehicles as well as freight trucks, a fact often ignored in discussions of “freight” infrastructure needs. Class 8 trucks (33,000 lb and over) are heavy-duty vehicles by any definition. Class 8 includes both straight trucks, and tractors for use with semi-trailers. Although primarily popu- lated by freight vehicles, Class 8 also includes very heavy ser- vice vehicles, such as concrete pumpers, cranes, and drilling equipment. Table B-3 displays the distribution of annual VMT for trucks other than pickups, vans, and SUVs from the 2002 Vehicle Inventory and Use Survey (VIUS) database. These data suggest that freight and goods movement activities account for about 61% of the total medium-duty and heavy-duty truck VMT, with service sector activities accounting for 39%. The division is not precise, as sectors such as retail trade and agriculture likely have an unknown mixture of freight and service uses. The split may have changed somewhat since 2002, but there is no more recent data of this type and any overall changes are probably not dramatic. State truck registrations typically include body type infor- mation, which could be used to distinguish trucks whose intended use or capability is transporting freight from those whose intended use is providing a service of some kind. As an illustration, Table B-4 displays body type data from the 2002 VIUS sorted into freight, mixed freight/service, and service categories. Among these medium- and heavy-duty trucks, 75% are identifiable as being freight haulers. Another 12%, mostly smaller vans, could be used in either freight or service appli- cations. It is likely that these trucks could be further sorted into freight and service types by weight class. As Table B-5 shows, freight transportation dominates the uses of tractor-trailer combinations. Table B-6 confirms that essentially all tractor-trailer com- binations are used in moving freight of some type. Table B-1. Uses of medium- and heavy-duty trucks. erahSlatoTrotceS 033,4thgierF 34% 082,1gnisuoheraW & .psnarT erih-roF 18% 135,1edarT liateR 7% 637edarT elaselohW 5% 387gnirutcafunaM 4% Mixed Freight/Service 12,526 60% 145,4noitcurtsnoC 19% 042,2.cte ,yrtserof ,erutlucirgA 14% 682,3elbacilppA toN/detropeR toN 11% 958latneR ro gnisaeL elciheV 6% Waste hauling, landscape, admin/support 743 5% 976seitilitU 3% 871gniniM 2% Service & Personal Transport 68,318 6% 721,2secivreS rehtO 3% 482secivreS dooF & noitadomoccA 1% 773secivreS ofnI 1% 343,56noitatropsnarT lanosreP 1% 781.ceR ,tnE ,strA 0% 471,58latoT 100% Source: U.S. Bureau of the Census, "Vehicle Inventory and Use Survey", 2002 . Weight Class Minimum GVW (lb) Maximum GVW (lb) VIUS Category Common Category Class 1 6,000 Light-Duty Light-Duty Class 2 6,001 10,000 Light-Duty Light-Duty Class 3 10,001 14,000 Medium-Duty Light-Duty Class 4 14,001 16,000 Medium-Duty Medium-Duty Class 5 16,001 19,500 Medium-Duty Medium-Duty Class 6 19,501 26,000 Light-Heavy Medium-Duty Class 7 26,001 33,000 Heavy-Duty Heavy-Duty Class 8 33,001 80,000 Heavy-Duty Heavy-Duty Table B-2. Truck classifications.

B-3 CLASS 7 26,001 – 33,000 lb CLASS 8 33,000 lb & Over Minivan Pickup V an SUV Stepvan Pickup V an SUV CLASS 1 6,000 lb & less Large W alk-in City Delivery Rental V an W alk-in Delivery T ow T ruck W recker Bucket T ruck Maintenance Pole T ruck Fuel Oil T ruck Equipment Mover Moving V an Refuse Day Cab T ractor HD Dump Cement Straight T ruck HD T ractor CLASS 2 6,001 – 10,000 lb CLASS 3 10,001 – 14,000 lb CLASS 4 14,001 – 16,000 lb CLASS 5 16,001 – 19,500 lb CLASS 6 19,501 – 26,000 lb Figure B-1. GVW truck classes. Sector Miles (000) Share Freight/Goods Movement 88,129 61% For-hire Transportation or Warehousing 65,350 45% Manufacturing 5,509 4% Wholesale Trade 7,784 5% Retail Trade 9,486 7% Services & Other 57,043 39% Vehicle Leasing or Rental 10,693 7% Agriculture, forestry, fishing, or hunting 7,797 5% Mining 1,981 1% Utilities 2,498 2% Construction 14,998 10% Information Services 560 0% Waste management, landscaping, or administrative/support services 5,101 4% Arts, entertainment, or recreation services 201 0% Accommodation or food services 2,402 2% Other services 2,208 2% Personal transportation 311 0% Not reported 8,143 6% Not applicable 150 0% Total 145,172 100% Source: VIUS 2002, Table 3a Millions of Annual Truck Miles Excluding Pickups, etc. Table B-3. Freight versus services share of truck miles.

B-4 Within the mixed freight/service sector, the use of tractor- trailer combinations is most common in construction and in agriculture, forestry, and so forth, where it is reasonable to assume that those combination vehicles are primarily used to move goods or equipment in freight service. The majority (77%) of trucks in freight service, however, are single-unit vehicles, as are the majority of service and mixed-use vehicles. These data, therefore, suggest that a higher VMT fee on tractor- trailer combinations would indeed be incurred primarily by freight haulers. However, it would cover only a small portion of all freight trucks. The distinction between freight and service trucks can be complicated by the use of service trucks to pull trailers loaded with goods. Examples include the following: • Utility company service trucks pulling trailers loaded with cables, poles, or other supplies. • Heavy-duty pickups with bed-mounted fifth wheels used to pull commercial vehicle or livestock trailers. • Construction vehicles used to tow other equipment to a work site. These practices would likely increase if “freight” vehicles paid higher taxes than “service” vehicles. Type Trucks (000) Share Single-unit trucks 4,110 100% Freight 3,087 75% Beverage 42 1% Concrete mixer 77 2% Curtainside 4 0% Dump 727 18% Flatbed, stake, or platform 948 23% Low boy 4 0% Pole, logging, pulpwood, or pipe 18 0% Tank, dry bulk 26 1% Tank, liquids or gases 178 4% Tow/Wrecker 128 3% Trash, garbage, or recycling 96 2% Van, basic enclosed 583 14% Van, insulated nonrefrigerated 19 0% Van, insulated refrigerated 86 2% Van, open top 152 4% Mixed Freight/Service 483 12% Van, step, walk-in, or multistop 413 10% Van, other 69 2% Other 0% Service 540 13% Armored 11 0% Concrete pumper 6 0% Crane 18 0% Service, utility 262 6% Service, other 222 5% Street sweeper 6 0% Vacuum 15 0% 1 Table B-4. Medium- and heavy-duty single-unit truck body types. Sector Single-Unit Trucks and Tractors w/o Trailers Single - Unit with Trailer Tractor with Single Trailer Tractor with Double Trailers Tractor with Triple Trailers Total Sector Composition Freight 77% 2% 19% 1% 0% 100% Mixed Freight/Service 91% 6% 4% 0% 0% 100% Service & Personal Transport 99% 1% 0% 0% 0% 100% Total 96% 2% 2% 0% 0% 100% Sector Share Freight 4% 6% 63% 73% 100% 5% Mixed Freight/Service 14% 42% 35% 25% 0% 15% Service & Personal Transport 82% 52% 3% 1% 0% 80% Total 100% 100% 100% 100% 100% 100% Source: 2002 VIUS, Table 5 Table B-5. Truck types and sectors. Type Trucks (000) Share Truck-tractors 1,422 100% Automobile carrier 13 1% Beverage 34 2% Curtainside 4 0% Dump 129 9% Flatbed, stake, or platform 194 14% Livestock 15 1% Low boy 58 4% Mobile home toter 5 0% Open top 64 5% Pole, logging, pulpwood, or pipe 22 2% Tank, dry bulk 28 2% Tank, liquids or gases 81 6% Van, basic enclosed 593 42% Van, drop-frame 14 1% Van, insulated nonrefrigerated 15 1% Van, insulated refrigerated 120 8% Other 10% Not applicable 34 2% 1 Table B-6. Medium- and heavy-duty tractor-trailer types.

B-5 Diesel versus Other Fuels In many instances, the use of diesel fuel is implicitly equated with freight transportation. As Table B-7 shows, however, even in the heaviest classes of trucks, other fuels account for about 9% of the vehicles. In medium and light- heavy vehicle classes, which together account for about the same number of vehicles as the heavy-heavy class, only about half of the vehicles use diesel fuel. A diesel fuel tax, therefore, would cover only part of the freight trucking industry. Moreover, a tax that raised the price of diesel rel- ative to the price of gasoline or other fuels would encour- age the use of gasoline-powered vehicles to avoid the tax burden. The connection between fuel type and truck type is also complex. As data from the 2002 VIUS (see Table B-8) show, tractor-trailer combinations use diesel almost exclusively. Single-unit trucks with or without trailers, however, mostly use gasoline. Moreover, most diesel trucks (77.5%) are in the single-unit categories. Table B-7. Truck classes and fuels used. Table B-8. VIUS data on truck type and fuel used.