TransporTaTion Companies GaininG TraCTion wiTh eConomiC DevelopmenT offiCials
By Tim Cook, CEO, KSM Location Advisors
Katie Culp, President, KSM Location Advisors
S
tate and local governments throughout the United States offer a variety of tax credits, training
grants, and other negotiated incentives to growing companies. These programs are tied to the relocation or expansion of a business based on various factors, including job growth, job retention, the wages of these jobs, and capital investment.
Once upon a time these negotiated incentives were geared toward very narrow industries and projects. Examples of targeted candidates used to be restricted to large manufacturers, big headquarter projects, and life science companies. Transportation and logistics companies were not previously part of this “elite” group, but that has changed.
There are a number of reasons for this evolution. As government officials began to dig deeper, they realized these companies employ individuals who require specialized certifications, thus making for good-paying jobs. Additionally, a lot of these companies employ brokers who are also in demand and thus command strong compensation.
Prior to expanding their incentive programs to include transportation, many states believed that their incentive tool box was ill-equipped to serve such a specialized niche industry. However, even though many incentive programs were originally developed for industries other than transportation and logistics, in practice these programs are versatile and therefore relevant.
For example, many states provide tax credits that can be used to offset tax liabilities generated by the net income of these growing businesses. As transportation companies grow in profitability, tax credits can have a dollar-for-dollar impact on the company’s bottom line. Property tax abatement can also play an important part in driving down a company’s annual operating costs. Discretionary programs available at the
local level, such as discounted or free land, infrastructure
grants, low interest loans, or even upfront funding can reduce the
significant project costs associated with building or expanding a terminal, warehouse, headquarters, or training center. Speaking of training, grants either in the form of reimbursements for out-of-pocket training expenses or subsidized CDL certifications can provide critical funding to credentialing new hires.
Regardless of the industry, any time state and local government officials consider a project for incentives, they routinely seek to apply the competitive “but for” test: But for the offering of incentives, would the company still locate its project in the city and state in question? In this regard, incentives are particularly effective in helping to win projects. Because of the transience of the workforce, transportation jobs are extremely portable. Drivers are often located throughout the country, meaning hiring incentives can entice transportation companies to hire local employees.
(continued on page 9) 5
CARRIERS & BROKERS
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40