Increased Diesel Taxes & 10-Year Low Truck Orders | Weekly News Update

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Higher Diesel Taxes Take Effect In 13 States

As we enter July, multiple states elected to adjust their state diesel taxes with twelve of the thirteen states increasing the tax.  The biggest movers lie in Illinois and Ohio as they included large tax hikes in their state budget plans.  Illinois rose its diesel excise tax by 21.5¢ per gallon, to 65.5¢ per gallon, which makes the state now the third highest taxed state.  Ohio increased its diesel tax 19¢ per gallon bringing the total tax value to 48¢.  Virginia also made changes in its state budget plan by increasing taxes in the counties around Interstate-81 by 7.7¢ to help fund improvements to the interstate.

Ten other states made changes that were previously established from multi-year plans or percentage based mechanisms that are adjusted every 6 to 12 months.  Tennessee, South Carolina, and Montana all followed through with their multi-year plans that were put into place in the past.  Minnesota implemented its Petroleum Tax Tank Cleanup Fee, which increases diesel taxes by 2¢ per gallon.  The remaining states – CT, SC, MD, IN, RI, NE, and GA – all have percentage based taxes that are determined by fuel prices in the state, inflation, and personal income.  All states saw increasing taxes besides Georgia who decreased their tax due to their state-specific percentage-based calculations.

Truck Orders Off to Weakest Start in Nearly a Decade

North American class 8 truck orders climbed roughly 24 percent from May reaching 13,000 units, according to the preliminary data released by FTR.  Despite the month-over-month increase, the first half of 2019 is the worst start to a year since 2010.  Some Original Equipment Manufacturers (OEMs) are taking orders for 2020, but others are holding off due to the risky nature of the trade war with China.  With the limited orders being placed, it is expected that OEMs will reduce their backlog to its lowest points since May 2018.

In Other News


WSJ: Hyundai Merchant Marine Joins Shipping Alliance, Securing More Ocean Trade

Hyundai Merchant Marine Co. is joining THE Alliance, a cooperating group of major container shipping lines that will give the South Korean flag carrier access to significant new business as it seeks to gain financial stability.

Fleet Owner: Senators Introduce Bill to Limit Trucks To 65 MPH

Legislation introduced in the Senate would require all new commercial trucks to be equipped with speed-limiting devices set to a maximum speed of 65 mph.

Reuters: Russia Resumes Oil Flows Via Druzhba Pipeline in Full After Contamination

Russian pipeline monopoly Transneft (TRNF_p.MM) said on Monday it had fully resumed oil supplies via the Druzhba pipeline following a major oil contamination episode earlier this year, RIA news agency reported.

Transport Topics: July 31 Is FMCSA’s New Target for Unveiling HOS Proposed Rule Change

Those anticipating the Department of Transportation’s proposal on hours-of-service policy changes will have to wait a little longer.  DOT’s most recent Significant Rulemaking Report has been updated to reflect July 31 as the projected publication date for the Notice of Proposed Rulemaking regarding HOS changes. A public comment period on the proposal is slated to end Sept. 16.

Oil Trade Truce Sends Oil Prices Higher

On the sidelines of the G20 summit, Trump and Xi met privately and agreed to work towards a deal. As a result, Trump agreed to hold off on new tariffs for the “time being.” Markets rejoiced that the standoff was not set to escalate at a time when the global economy appears to be weakening. U.S. stocks rallied to an all-time high.

Bloomberg: U.S. Proposes More Tariffs on EU Goods in Airbus-Boeing Dispute

The U.S. added more European Union products to a list of goods it could hit with retaliatory tariffs in a long-running trans-Atlantic subsidy dispute between Boeing Co. and Airbus SE.


CCJ: Higher Diesel Taxes Take Effect In 12 States

With the turn of the calendar to July, truck drivers will see increased diesel fuel prices in 12 states due to rising fuel taxes. While some states’ increases are less than a cent, some states’ taxes on diesel will be immediately noticeable.

WSJ: OPEC, Russia Formalize Cooperation Pact

OPEC sealed a long-term cooperation pact with Russia on Tuesday, extending a partnership set up two years ago to fight a surge of U.S. oil that has upset the cartel’s pricing power, OPEC officials said.

Reuters: Venezuela’s June Oil Exports Recover to Over 1 Million Bpd

Venezuela’s oil exports recovered in June from a sharp drop the month before, helped by increased deliveries to China, which is now state-run oil firm PDVSA’s primary destination for its crude, according to company records and Refinitiv Eikon data.

JOC: Rising US-Mexico trade squeezes Laredo truck capacity

A lack of available capacity is making it more difficult for Mexican exporters to find trucks to bring shipments across the US border.  Moving freight through the border crossing in Laredo, Texas, may not be as difficult as it was in May, but it is no less complicated.


Bloomberg: China Raises Security Warning on Ships Plying Malacca Strait

China raised the security level for its vessels heading through the Strait of Malacca, a key Asian trade route and major oil choke point.

WSJ: Maritime Operators Set Full Speed Ahead for Cleaner Ships

Oceangoing vessels have burned heavy oil, the world’s dirtiest propulsion fuel, since they switched from coal in the early 20th century, and operators since then have sailed around unclear rules over who enforces climate protection.

Reuters: U.S. Trade Deficit Surges to Five-Month High as Imports Soar

The U.S. trade deficit jumped to a five-month high in May as imports of goods increased, likely as businesses restocked ahead of an increase in tariffs on Chinese merchandise, eclipsing a broad rise in exports.

Transport Topics: Class 8 Orders Come In at 13,000 for June as Freight Movement Slows

June orders for North American Class 8 trucks were down 69% from last June, not a totally surprising plunge given the tough comparison to the sales environment created by the 2018 freight boom, one analyst said.  Also see, Truck orders off to weakest start in nearly a decade.


WSJ: Squeezed by U.S. Sanctions, Iran Shifts From Patience to Confrontation

Tighter new U.S. sanctions have proved more punishing than Iran’s leaders expected, driving Tehran to hit back militarily and breach limits it had agreed to put on its nuclear program.


WSJ: U.S. Hiring Bounces Back, Easing Fears of a Jobs Slowdown

U.S. employers added jobs at a robust pace in June, easing fears of a hiring slowdown and showing a strong labor market could propel a domestic economy facing threats from abroad.

Reuters: OPEC output hits new low on Trump’s sanctions, supply pact

OPEC oil output sank to a new five-year low in June as a rise in Saudi supply did not offset losses in Iran and Venezuela due to U.S. sanctions and other outages elsewhere in the group, a Reuters survey found.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at

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