How the election could impact trucking

Jason Cannon:
CCJ's 10 44 is brought to you by Chevron Delo, heavy duty diesel engine oil. Now there's even more reasons to choose Delo.

Matt Cole:
The presidential election is in less than 50 days, what could be its impact on the supply chain and trucking?

Jason Cannon:
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Hey everybody, welcome back. I'm Jason Cannon and my co-host on the other side is Matt Cole. Uncertainty's been a theme in the trucking community for the better part of the last four years dating back to at least as far as the Covid pandemic during an election year. Uncertainty always seems to ramp up until a winner's declared.

Matt Cole:
This year's election is different from most in that both sides are mostly known quantities. We've had a Donald Trump administration before and Kamala Harris, of course, is part of the current Biden administration. Despite that familiarity, there's still plenty of uncertainty about the economy and freight market and what a winner from either side would look like. Joining us this week to help parse through some of that is supply chain expert Don Hicks.

Don Hicks:
Those of us who are in the business, and we've been in this business for quite a while of thinking about future supply chain. When do we not have uncertainty? We're always surrounded by uncertainty. Election years are unique in that it really crystallizes the moment there's going to be a change coming and you just don't know if it's left or if it's right or to use the politic political side this way or that way, and that's what's got everybody thinking about it. But uncertainty is happening all the time. Here. You've got the stress that you have the date when it's going to happen, and then you will resolve, are you going this way or that way? So in terms of the election year, it focuses everybody's attention on, you can see two paths going forward and it's really a question of this one or that one.

Now the nature of uncertainty is it's surprising. So I actually think in many ways an election year, and we could say this is certainly an unusual election year because it's been so weird and crazy, but the paths that are being laid out, you've got on the Democrat side, you've got a fairly standard approach of an emphasis on tighter regulation, more government involvement and emphasis on things like equity, which ends up resolving into redistribution potentially. Is this good for business in general? It tends to, in the short term, dampen a little of that activity and in the long term, it actually can produce things like protections for the labor market. On the Republican side, historically republican administrations like to give business a little bit of a looser hand. They tend to try to pull back and both of the parties are sticking with their sort of traditional approaches. But here's the thing, nobody knows what the heck either of these candidates is really going to do in office. I mean, if you want to know for sure what they're not going to do, just assume that they're not going to do whatever it is that they said.

Jason Cannon:
Contrary to popular belief, Don says he thinks the two parties really aren't as far apart as what they seem when it comes to business

Don Hicks:
For people trying to say, well, how is the election going to affect things? The two parties do not have radically different agendas. I believe for the business environment, both parties are pushing on an anti-globalization approach, and this is something we're seeing across the board, making it harder to do international trade. Both parties seem to be pretty supportive of trade barriers and tariffs, and those will have a negative effect on overall business activity, but mostly it's just going to shift it, and you're seeing this with a lot of heightened activity and focus on things like nearshoring and on bringing supplier, introducing redundancy into the supply base. These are good things and that's going to happen regardless of who's in office actually. So I think, well, we're focused on this. The smart companies are actually saying, well, I've got a plan for this. I've got a plan for this, but where are the real sources of uncertainty out there? And start thinking about what happens next year and the year after and systematically proofing out where are the pinch points in my global supply chain because the election's going to come and it's going to go and either in November or in the next six months after it, we'll figure out who actually is going to be president. But after that, you've got a whole global environment full of surprises for us.

Matt Cole:
After a quick word from 10-44 sponsor Chevron lubricants, we'll hear Don's thoughts on what a second Trump administration would mean for trucking.

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Don Hicks:
Trying to pick what a President Trump would do is like the only thing harder is trying to predict what a president Trump would say, and these are, they're just not even related. It's a wild guessing game, and my money is actually betting on. There will certainly not be a focus on increasing regulation and driving towards the electric vehicle and the sort of carbon emissions direction. And I think about when I think about the effects on the trucking industry in the United States, which is the trucking industry is the lifeblood. This is the circulatory system that underpins everything we do. So there are few industries as critical as the trucking and the freight industry in the us It's just critical, but then split it out into the two parts. If the economy is going poorly, the industry has less demand, less need for it, and you see prices fall and it's bad for business. So the freight industry thrives when businesses thriving, which means good consumption, consumer confidence and optimism. Okay, and again, that's not a Republican or Democrat thing. If business is going well in the United States, it's great for the freight industry, it's great for truckers.

Jason Cannon:
Don mentioned a Trump administration likely would not continue the push toward EVs that we've seen under Biden, but he says some sort of push in that direction is likely a good thing.

Don Hicks:
But I got to ask, are we actually against reducing CO2 emissions and do we think that moving towards electric vehicles is bad for the country? It's not. And the long term it is where we're going. So sometimes the government does things to give us a shove in a direction we probably ought to go. Have we gone too far too fast? That to me is the right question to ask. Some people say that the government should have no role pushing us in these directions. Again, on a personal level, I believe that government spending can play an important role helping grease the wheels, so to speak, catalyzing r and d. But I also think that when we try to pick winners and losers, the government tends to be pretty bad at that kind of thing. And one of the most unusual parts about a Trump administration would be they tend to go out and pick their favorites. They're not objective and they don't claim to be. If you're their friend, they're going to give you the money. If not, then screw you. And that's a bit unusual in the sort of perspective of historical Republican administrations who say, we should stay out. To me, that contributes to the uncertainty of the whole thing. You really don't know what you're going to get out of all of that.

Matt Cole:
As expected, Don believes the strong push we've seen toward EVs will continue with the Harris administration.

Don Hicks:
I think in a Harris administration, they've been pretty open about their drive, no pun intended, to push people and push the industry more quickly in the electric vehicles direction that will produce winners and losers. One of the concerns I have is right now the United States has become the largest producer of fossil fuels. We're not dependent on what's happening in the Middle East as much. I mean, we all are in an interdependent world, but I think pulling back on the us, anything that was going to hold back, the US energy industry has these trickle on effects. We are wildly dependent on fossil fuels and we will be for decades. It doesn't matter what any one of these program is. Fossil fuels are so critical to almost every industry in the United States we're married to it. So a big shove from a Harris administration I think will help get a lot of projects going, but will it actually move the needle? No, because nothing will move the needle in the next 20 to 30 years, quite honestly,

Jason Cannon:
For the economy and the freight market, Don says, who wins the election isn't going to be the biggest factor in where they go.

Don Hicks:Markets and decision makers have trouble with uncertainty because what we're trying to do is make our best decisions and optimize the use of resources, and we can't do it when we're saying, I don't know about this and I don't know about that. Either way, resolving the election and having a peaceful transition in this country, which we didn't have four years ago, if we can have a peaceful transition to a next administration, I think that matters more than which administration takes place. And so for me, the greatest worry is if we again, have a non peaceful transition for the first time since the country's founding, we didn't have a peaceful transition in the last election. In this next transition, if it's a peaceful transition, things will get resolved, and either way, the resolution of uncertainty is going to lift people's optimism. I'm really, really bullish on where we're going this year and the next year, and I think this is probably quite contrarian.

It matters less which administration shows up than how they show up and how they take power. If we have a repeat of what happened in 2020, it could be disastrous and it could set the stage for hurting us for years or decades to come. So personally, I'm hoping whoever loses is honorable and does the right thing for the country, that will set us on a good path. And if there they're a sore loser boy that could cause more damage than either bad administration could. If we manage to pull that off, I think it's going to be a great couple of years for the trucking industry and for freight and for global supply chains, honestly,

Matt Cole:
While there's not much trucking companies can do about the election and what happens in its aftermath. Don says there are things fleets can do to guard against any disruptions.

Don Hicks:
The trucking industry tends to be actually really out there on the edge in terms of pulling in new technologies and trying to push to be more efficient. The idea that the trucking industry is somehow sort of old fashioned is it's just inconsistent with what we've seen. The trucking industry is out there testing new technologies constantly. I think the lifeblood of the trucking and freight industry in the United States is the people. It is the labor force, and we know that there's been driver shortages for decades. We've been talking about this, thinking about your labor force and your drivers especially, but even the support and the maintenance guys thinking about those folks as your most critical resource. If you treat those guys as important as you treat capital in your equipment, you're thinking about them as a long-term investment. We tend to, in many industries, view our labor force as a more of a short-term issue to be managed rather than a partner to be invested in and developed, and I think that is the biggest thing to deal with over the next 10, 20 years.

The health of this is a career. What can we do to make it not only safer, but more sustainable for the people who are in these businesses? I myself worked at Swing Shift before. I know what it does to your health and to try to get a family life if your schedule can't be predicted and it's just all over the place. These are things that it sounds like a regulatory issue, but it's not. It's really businesses figuring out how do we treat our drivers more like we might treat airline pilots as a critical resource that is going to get us, because we're going to be even more dependent. The freight industry in the United States is a long-term critical growth area, so we've got to be treating the people as the most critical resources opposed to the capital and the equipment. That's what the best companies are going to do.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.