Incentives for Deployment 

of Onboard Safety Systems 

Final Report 

 December 2007
FOREWORD 

As part of an ongoing research project evaluating onboard safety technologies, this report 

identifies potential incentives that could expedite the deployment of onboard safety systems into 

the marketplace. 

The objective of this report is to outline possible ways to “incentivize”—through either tools of 

government or private industry—the procurement and utilization of onboard safety technologies. 

This report describes the five major stakeholders highlighted in the onboard safety technology 

incentives matrix: technology manufacturers, truck original equipment manufacturers (OEMs), 

trucking companies, insurers, and government agencies. The primary sources used for the 

compilation of potential incentives were industry stakeholders who offered their insights on 

incentives and related issues. As a result, the information provided in the following sections 

about incentives does not constitute an endorsement by FMCSA. 

Although the report can be helpful to the general public in understanding the deployment of new 

safety technology for commercial motor vehicles, the report is primarily targeted toward 

commercial motor carriers and their drivers. 

This publication is considered a final report and does not supersede another publication. 

NOTICE 

This document is disseminated under the sponsorship of the Department of Transportation in the 

interest of information exchange. The United States Government assumes no liability for its 

contents or the use thereof. 

This report does not constitute a standard, specification, or regulation. 

The United States Government does not endorse products or manufacturers. Trade or 

manufacturers’ names appear herein only because they are considered essential to the object of 

this document. 
Technical Report Documentation Page (Form 1700.7) 

1. Report No. 

FMCSA RRT-07-031 

 

2. Government Accession No. 3. Recipient's Catalog No. 

4. Title and Subtitle: 

Incentives for Deployment of Onboard Safety Systems Final Report 

5. Report Date: 

December 2007 

6. Performing Organization Code 

7. Author(s): 

American Transportation Research Institute 

8. Performing Organization Report No 

9. Performing Organization Name and Address: 10. Work Unit No. 

Battelle 

505 King Avenue 

Columbus, OH 43201-2693 11. Contract or Grant No.

DTFH61-96-C-00077 

13. Type of Report and Period Covered 

Final Report July 2004 -July 2005 

Updated December 2007 

12. Sponsoring Agency Name and Address: 

Federal Motor Carrier Safety Administration 

Office of Research and Technology 

1200 New Jersey Avenue, SE 

Washington, DC 20590 14. Sponsoring Agency Code

FMCSA 

15. Supplementary Notes: 

Contracting Office Technical Representative: Amy Houser, FMCSA Technology Division 

16. Abstract: 

As part of an ongoing research project evaluating onboard safety technologies, this report provides information 

about potential incentives that could expedite the deployment of onboard safety systems into the marketplace. 

The objective of this report is to outline possible efforts to “incentivize”—through either tools of government or 

private industry—the procurement and utilization of onboard safety technologies. The report describes the five 

major stakeholders highlighted in the onboard safety technology incentives matrix: technology manufacturers, truck 

original equipment manufacturers (OEMs), trucking companies, insurers, and government agencies. 

17. Key Words: 

commercial motor vehicles, onboard safety system, onboard safety 

technology, truck original equipment manufacturers, lane departure 

warning systems, stability control systems, collision warning systems 

18. Distribution Statement 

No restrictions 

19. Security Classif. (of this report)

 Unclassified 

20. Security Classif. (of this page) 

 Unclassified 

21. No. of Pages: 

23 

22. Price
SI* (MODERN METRIC) CONVERSION FACTORS 

APPROXIMATE CONVERSIONS TO SI UNITS APPROXIMATE CONVERSIONS FRO

Symbol When You Know Multiply By To Find Symbol Symbol When You Know Multiply By 

LENGTH LENGTH 

in inches 25.4 Millimeters Mm mm millimeters 0.039 inft feet 0.305 Meters M m meters 3.28 feyd yards 0.914 Meters M m meters 1.09 Yami miles 1.61 Kilometers Km km kilometers 0.621 mi

AREA AREA 

in2 square inches 645.2 square millimeters Mm2 mm2 square millimeters 0.0016 sqft2 square feet 0.093 square meters m2 m2 square meters 10.764 sqyd2 square yards 0.836 square meters m2 m2 square meters 1.195 sqac acres 0.405 Hectares Ha ha hectares 2.47 acmi2 square miles 2.59 square kilometers km2 km2 square kilometers 0.386 sq

VOLUME VOLUME 

fl oz fluid ounces 29.57 Milliliters Ml ml milliliters 0.034 flugal gallons 3.785 Liters L l liters 0.264 gaft3 cubic feet 0.028 cubic meters m3 m3 cubic meters 35.71 cuyd3 cubic yards 0.765 cubic meters m3 m3 cubic meters 1.307 cu

MASS MASS 

oz ounces 28.35 Grams G g grams 0.035 oulb pounds 0.454 Kilograms Kg kg kilograms 2.202 poT short tons (2000 lbs) 0.907 Megagrams Mg Mg megagrams 1.103 sh

TEMPERATURE (exact) TEMPERATURE (exac

°F Fahrenheit 5(F-32)/9 Celsius °C °C Celsius 1.8 C + 32 

temperature or (F-32)/1.8 Temperature temperature 

ILLUMINATION ILLUMINATION 

fc foot-candles 10.76 Lux Lx lx lux 0.0929 fl foot-Lamberts 3.426 candela/m2 cd/m2 cd/m2 candela/m2 0.2919 

FORCE and PRESSURE or STRESS FORCE and PRESSURE or S

lbf pound-force 4.45 Newtons N N newtons 0.225 psi pound-force per square inch 6.89 Kilopascals kPa kPa kilopascals 0.145 

* SI is the symbol for the International System of Units. Appropriate rounding should be made to comply with Section 4 of ASTM E380.
TABLE OF CONTENTS 

1. INTRODUCTION.................................................................................................................1

2. METHODOLOGY ...............................................................................................................2

2.1 OVERVIEW ..................................................................................................................2 

2.2 INTERVIEW DISTRIBUTIONS ..................................................................................2 

3. INDUSTRY DESCRIPTIONS AND MOTIVATIONS.....................................................4

3.1 TRUCKING INDUSTRY..............................................................................................4 

3.2 TRUCK ORIGINAL EQUIPMENT MANUFACTURERS .........................................4 

3.3 TECHNOLOGY MANUFACTURERS........................................................................5 

3.4 INSURANCE COMPANIES.........................................................................................5 

3.5 GOVERNMENT AGENCIES.......................................................................................6 

4. INCENTIVES........................................................................................................................7

LIST OF APPENDICES 

APPENDIX A: INCENTIVE CATEGORY DESCRIPTIONS...............................................12

A-1. FEDERAL TAX EXPENDITURES............................................................................12 

A-2. PUBLIC INFORMATION ..........................................................................................13 

A-3. FEDERAL LOANS .....................................................................................................13 

A-4. INSURANCE...............................................................................................................14

A-4. CORRECTIVE TAX ...................................................................................................14 

A-5. PROJECT GRANTS....................................................................................................14 

A-6. TORT LIABILITY ......................................................................................................15 

A-7. OTHER: INCENTIVES CYCLE AND STAKEHOLDERS ......................................15 

REFERENCES.............................................................................................................................16

LITERATURE......................................................................................................................16 

INTERVIEWS......................................................................................................................16 

i 
ii 

LIST OF TABLES 

Table 1. Interview Participants....................................................................................................... 3 

Table 2. Incentives—Federal Tax Expenditures (see Appendix A-1)............................................ 7 

Table 3. Incentives—Public Information (see Appendix A-2)....................................................... 8 

Table 4. Incentives—Federal Loans (see Appendix A-3) .............................................................. 8 

Table 5. Incentives—Insurance (see Appendix A-4)...................................................................... 9 

Table 6. Incentives—Corrective Tax (see Appendix A-5)............................................................. 9 

Table 7. Incentives—Project Grants (see Appendix A-6) ............................................................ 10 

Table 8. Incentives—Tort Liability (see Appendix A-7).............................................................. 11 

Table 9. Incentives—Other (see Appendix A-8).......................................................................... 11 

LIST OF FIGURES 

Figure 1. Incentives Cycle and the Five Stakeholders.................................................................. 15 
1. INTRODUCTION 

Safety is at the heart of the Federal Motor Carrier Safety Administration's (FMCSA) mission. 

Working together with the trucking industry, FMCSA envisions a future of smart technologies 

that support the expanding role of the trucking industry to safely, securely, and efficiently 

transport the nation's goods and products. One way to save lives and reduce the number of 

injuries on the nation’s highways is through the expanded use of onboard safety systems, such as 

lane departure warning systems, stability control systems, and collision warning systems. 

Incentives have the potential to accelerate the manufacture, purchase, and use of a new safety 

technology. As a result, the purpose of this report is to outline possible efforts to “incentivize”—

through either tools of government or private industry—the procurement and utilization of 

onboard safety systems. These potential incentives include: 

• Federal Tax Expenditures 

• Public Information 

• Federal Loans 

• Insurance 

• Corrective Tax 

• Project Grants 

• Tort Liability 

The primary sources used for the compilation of potential incentives were industry 

stakeholders who offered their insights on incentives and related issues. As a result, the 

information provided in the following sections about incentives does not constitute an 

endorsement by FMCSA. 

1 
2. METHODOLOGY 

2.1 OVERVIEW 

The methodology used in this report included qualitative data collection and an integrated review 

of previously collected and analyzed quantitative data in the area of incentives. 

The sources of qualitative data were industry stakeholders who offered their insights on 

incentives and related issues, organized by the five major stakeholder categories (carriers, 

original equipment manufacturers [OEMs], technology manufacturers, insurers, and government 

agencies). To manage the complexity of interview data, qualitative analysis software (QSR 

NVivo) was used to create data nodes for the eight incentive categories (tax expenditures, public 

information, grants, loans, insurance, tort reform, taxes, and other), and five major stakeholder 

categories. Analyzing these categories separately provided an understanding of shared versus 

disparate opinions of stakeholders. To validate inferences and statements made during the 

interview process, quantitative data from established publications were cited. 

2.2 INTERVIEW DISTRIBUTIONS 

Predicated on the assumption that onboard safety technology is both innovative and proven, the 

two concepts listed below were used to identify interview participants that would provide 

information about incentives: 

1. Product Adoption (within the trucking industry). 

Mirroring standard “product adoption” processes developed in business marketing 

research, individuals and firms go through typical stages in the process of incorporating 

new products. The stages generally include (a) becoming aware of the new product, (b) 

seeking information about it, (c) developing favorable attitudes toward it, (d) trying it out 

using some direct or indirect means, d) formulating an opinion or position, and (e) 

adopting the product into a standing usage or repurchase pattern. 

Within the target groupings, potential “adopters” often fall into different categories 

associated with their level of decision-making risk. These labels – which in the trucking 

industry are usually determined both by corporate philosophy and financial viability 

(often related to company size) – relate to a chronological labeling of willingness to adopt 

a new or innovative product. The standard marketing descriptions and ostensible number 

of total adopters include the following: 

– Innovators (first 2 to 5 percent); 

– Early adopters (next 10 to 15 percent); 

– Early majority (next 35 percent); 

– Late majority (next 35 percent); 

– Laggards (final 5 to 10 percent). 

2 
3 

2. Standard Trucking Industry Organizational Design 

The trucking industry is relatively homogenous in its organizational design (functional 

roles), but firm size dictates the number of different functional roles for any one person. 

For example, larger firms have dedicated staff in charge of functions such as 

maintenance, safety, investment, staffing, whereas smaller firms may lump these 

functions together under a single individual. 

Based on these product adoption assumptions, larger carriers were primarily selected for 

interviews, since they typically have larger capital investment budgets and greater liquidity to 

become the first adopters of onboard safety systems. If larger carriers make the initial 

investment, future lower prices will increase purchasing opportunities for smaller carriers. Yet, 

one smaller carrier was also interviewed. In a few cases, regardless of carrier size, specialized 

segments such as munitions haulers are often required to invest in certain safety technologies. 

This rationale also applies to a lesser degree to technology manufacturers, truck OEMs, and 

insurance companies. The interview participants are shown in Table 1. 

Table 1. Interview Participants 

Category Entity 

Trucking Industry Schneider National, US Xpress, Boyle Transportation, American Trucking 

Associations (ATA), legal entity

Truck OEMs Volvo, Freightliner, National Truck Equipment Association

Insurance Industry Great West Casualty, Liberty Mutual, National Accounting & Finance Council

Governmental 

Agencies 

FMCSA, Internal Revenue Service (IRS), Commercial Vehicle Safety Alliance 

(CVSA)
3. INDUSTRY DESCRIPTIONS AND MOTIVATIONS 

3.1 TRUCKING INDUSTRY 

As an integral part of freight transport in the United States, the trucking industry hauled 10.7 

billion tons, or 69.0 percent of the nation’s total freight tonnage, in 2006.1

 Due in part to the 

deregulation of the 1980s and 1990s, competition among trucking firms has become more 

intense, putting considerable pressure on operating margins. More specifically, deregulation 

lowered barriers to entry such as operating authority and financial viability, thus leading to 

growth in registered carriers from less than 20,000 to nearly 565,000. The effect of this increased 

competition has reduced typical net operating margins to between 2 and 4 percent.2 Additional 

factors that impact a carrier’s financial health include: 

• Competition among other freight transporting sectors 

• Economic recessions 

• Driver shortages 

• Volatile and increasing fuel costs 

• Skyrocketing insurance rates 

The trucking industry is primarily motivated by economic factors. Based on the pressures 

described above, capital investments are researched and scrutinized to determine fully allocated 

return on investments and opportunity costs. Fixed costs associated with the industry are found 

in fuel, labor inputs, and essential equipment such as trucks, trailers, and tires. Taxes also play a 

role, with a typical carrier paying approximately $8,959 annually in Federal taxes on a typical 5-

axle, tractor-semi trailer combination.3

 These items are, as their category implies, necessary for 

service provision. Variable inputs such as onboard safety technology are not necessary for 

operations if a lower-cost safety alternative such as training and/or hiring practices are 

available—ostensibly whether or not these alternatives are proven. A recent industry survey 

produced by the American Transportation Research Institute (ATRI) and Gartner G2 stated “few 

respondents...have deployed automated safety systems such as load stability sensors, lane 

departure warning systems, and automated collision notification systems,”4

 indicating that large 

investments in safety technology are not a top priority for the trucking industry. 

3.2 TRUCK ORIGINAL EQUIPMENT MANUFACTURERS 

Truck OEMs are highly dependent on the trucking industry to purchase their equipment and 

follow similar economic growth and recession patterns. In a month-by-month comparison of 

OEM sales between in the years 2006-2007, overall new truck sales typically fell more than 50 

 1

 American Trucking Associations, 2007. 

2

 Berry, 2004. 

3

 American Trucking Associations, 2006 figure, www.atri-online.org. 4

 Trucking Technology Survey Results Summary, p. 2 

4 
percent from the same month in the previous year, with class 8 truck sales often declining at the 

greatest rate.5

 In 2006, approximately 445,000 Class 6-8 trucks were sold in the U.S.6 

Factors influencing this decline included the economic recession and rising costs of diesel and 

insurance. Complicating matters for OEMs, future demand for new vehicles is not expected to 

keep pace with freight tonnage growth because of the existing truck surpluses. It is believed that 

staged regulations placed on diesel engine manufacturers by the Environmental Protection 

Agency in 2002, 2004, and 2005 will also play a crucial role in future sales. The result is 

increased difficulty in deploying new vehicle-installed safety systems into the marketplace. 

OEMs are primarily motivated to install onboard safety devices if it is perceived that the feature 

will enhance the value-perception of their product and increase the likelihood of a purchase. 

Barriers to installing specific onboard safety devices first include Federal excise taxes (FETs). 

The additional cost of the product is added into the final retail cost and is subject to the 12-

percent retail sales tax. Aftermarket installation does not incur this FET. Thus, OEMs would be 

motivated to include onboard safety technology if the cost were lessened through decreased 

FETs, or if carriers had other external incentives to utilize such devices. 

3.3 TECHNOLOGY MANUFACTURERS 

Technology manufacturers are motivated to develop innovative products that will be purchased 

once the learning curve is established. Often “innovations” are revisions and refinements to 

technology transfers from other applications. Thus, if incentives exist and a market for a safety 

concept is identified, more manufacturers will enter the market, and create and improve upon the 

current state of onboard safety technology knowledge. Those who already have products in the 

marketplace will also benefit from demand-creating incentives. 

3.4 INSURANCE COMPANIES 

The insurance industry has seen substantial cost increases in recent years due, in part, to damages 

and lawsuits arising from the events of September 11, 2001. While most of these costs were 

initially born by the insurance industry, they were passed on to all insurance clients, resulting in 

insurance premium increases for most policies relating to auto, home, property, and umbrella 

coverage. As a result, the trucking industry experienced an average annual insurance rate 

increase of 26.3 percent in 2002,7

 though average premium rates did decline slightly in 2005 and 

2006. Over the last several years, insurance rates have been relatively stable, allowing the 

trucking industry to better predict and incorporate insurance costs into business plans. 

By definition, insurers are risk-averse. Each company has a different formula to determine risk 

and what, if any, premium and deductible a trucking company will have as part of their policy. 

Insurance premiums will not change simply because a new input is added into the field. They 

traditionally will only lower rates as loss performance improves over a given time. Therefore, 

this risk-averse industry does not appear to be motivated to make short-term changes based on 

 5

 Transport Topics, November 19, 2007. 

6

 Ward’s Automotive Group, 2007 

7

 American Trucking Associations, 2003 and 2003 Annual Trucking Industry Insurance Survey (based on 1,000 respondents) 

5 
6 

anything other than: (1) widespread and longitudinal testing and utilization of products, and/or 

(2) documented improvements in safety records and scores. Safety technologies have to meet one 

or both of these internal requirements. 

3.5 GOVERNMENT AGENCIES 

A major objective of the United States Department of Transportation (USDOT) is to provide a 

safe transportation system to meet the needs of citizens. In accordance with the USDOT mission, 

and in response to legislative action, FMCSA was created with a purpose of reducing accidents, 

injuries, and fatalities that involve large trucks and buses. 

Improving safety is the mission of FMCSA. In doing so, it has funded research projects that 

demonstrate the effectiveness of onboard safety technology and hopes to increase the use of 

onboard safety technologies. 
4. INCENTIVES 

Incentives are defined activities that can be done to accelerate the manufacture, purchase, and 

use of a new safety technology. The primary sources used for the compilation of potential 

incentives were industry stakeholders listed in Table 1 who offered their insights on incentives 

and related issues. As a result, the information provided in these sections about incentives does 

not constitute an endorsement by the FMCSA. Table 2 through Table 9 present the incentives in 

the following categories: 

• Federal Tax Expenditures 

• Public Information 

• Federal Loans 

• Insurance 

• Corrective Tax 

• Project Grants 

• Tort Liability 

• Other 

Table 2. Incentives—Federal Tax Expenditures (see Appendix A-1) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value

Heavy Vehicle Use Tax: A tax 

credit, deduction, or reduction 

based on procurement costs of 

onboard safety technology. 

Carriers: Carriers who use 

technology would receive this 

benefit. 

Legislative/U.S. Treasury 

and Congress/FMCSA/ 

Low to Medium 

Federal Excise Tax; Retail Sales 

Tax on new Trucks: A tax credit, 

deduction, or reduction on the 

excise tax for all or part of the 

sale of technology as part of a 

new vehicle and/or the new truck 

itself. 

OEMs: OEMs would be able to 

install the technologies and not 

pass as much or any of their 

costs onto consumer. 

Carriers: Carriers would benefit 

from safety technology included 

in new truck purchase at cost 

minus tax, minimal cost, or no 

cost, depending on type of retail 

sales tax relief. 

Legislative/U.S. Treasury 

and Congress/FMCSA/ 

High for carriers; Low to 

Medium for implementers 

Federal Excise Tax; Commercial 

Truck Diesel Taxes: A tax credit, 

deduction, or reduction on fuels 

purchased by the carrier based 

on use of onboard safety 

technology. 

Carriers: Carriers would realize a 

decrease in a very costly area of 

their business. 

Legislative/U.S. Treasury 

and Congress/FMCSA/ 

Very Low 

Federal Income Tax: A tax credit 

or deduction in Federal income 

tax burdens placed on carriers or 

OEMs based on use or 

installation of onboard safety 

technology. 

OEMs: A decreased tax burden 

would be available to companies 

who install onboard safety 

technology during production. 

Carriers: A decreased tax 

burden would be available for 

using onboard safety technology.

Legislative/U.S. Treasury 

and Congress/FMCSA/ 

Medium to High 

7 
Table 3. Incentives—Public Information (see Appendix A-2) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value

Dissemination of Data and 

Research: Materials, such as 

data and research collected in 

onboard safety technology 

evaluations, which offer 

extensive information to the 

industry and, in doing so, lessen 

or remove the cost to industry 

members of researching new 

products themselves. 

Carriers: Carriers would accrue 

fewer costs in researching the 

product themselves and will be 

more likely moved toward use of 

onboard safety technology. 

Objective, positive evaluations of 

the technology will offer 

stakeholders fewer risks in 

utilization of the device and 

opportunity cost. 

Administrative/FMCSA/ 

NHTSA/High 

Expert Testimony: In addition to 

written information, the use of 

testimony to further solidify that 

the technology is viable and will 

offer the stakeholder cost-free 

information. 

Carriers: Carriers would accrue 

fewer costs in researching the 

product themselves and will be 

more likely moved toward use of 

onboard safety technology. 

Objective, positive evaluations of 

the technology will offer 

stakeholders fewer risks in 

utilization of the device and 

opportunity cost. 

Administrative/FMCSA/ 

NHTSA/High 

Table 4. Incentives—Federal Loans (see Appendix A-3) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value

Direct Loan: A direct loan to a 

carrier for the purchase of 

onboard safety technology 

equipment. This can be 

designed with various rates of 

interest and payment schedules. 

Carriers: This group would 

benefit from low interest loans for 

the purchase of new equipment. 

Administrative/U.S. 

Treasury, Small Business 

Administration (SBA), 

Department of Commerce 

(DOC)/FMCSA/High 

Loan Guarantee: A loan given 

by a private lender for the 

purchase of onboard safety 

technology equipment in which 

the loan is guaranteed by the 

government if the borrower 

defaults. 

Carriers: Carriers may receive 

lower cost loans if the lenders 

risk is lessened by government 

guarantees. 

Administrative/Banking 

Industry, U.S. Treasury, 

SBA, DOC/FMCSA/ 

Medium 

8 
Table 5. Incentives—Insurance (see Appendix A-4) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value 

Private Insurance: A decrease in 

insurance costs would be 

implemented by the insurance 

companies if this type of plan 

worked well with their business 

model. Burden is on the proven 

benefits of the technology prior 

to this incentive offering. 

Carriers: Carrier costs for 

insurance have risen 

dramatically in recent years. A 

decrease in insurance could free 

up capital. 

Administrative/Insurance 

Industry/Low to Medium 

Table 6. Incentives—Corrective Tax (see Appendix A-5) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value 

Corrective Tax or Charge: An 

increased tax rate, fine, or 

charge to one or more areas of 

cost for trucking. This would be 

placed on those who do not use 

onboard safety technology; 

would create an incentive to 

procure and install these 

devices. Disincentive effects 

could be reduced by pooling tax 

revenues for a pooled accident 

reimbursement fund. 

Carriers: Carriers who already 

use the device, or have plans to 

in the short-run, will benefit from 

this type of plan because their 

competition will face additional 

costs. This will create an 

incentive for carriers to purchase 

onboard safety technology 

before the tax is implemented, 

and will also create incentive 

once the tax is law. 

Legislative/U.S. Treasury/ 

FMCSA/Low 

9 
Table 7. Incentives—Project Grants (see Appendix A-6) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value 

Carrier Grants: Funding to help 

offset or eliminate costs of 

evaluating new onboard safety 

technology on all or part of a 

fleet. 

Carriers: This stakeholder 

benefits from low-cost or no-cost 

research and the resulting 

information derived from it; 

develops the critical base of 

knowledge and product 

validation. 

Administrative/FMCSA/ 

Medium to High 

OEM Grants: Funding to help 

offset or eliminate costs of 

evaluating new onboard safety 

technology that is tested by a 

new truck manufacturer. 

OEMs: OEMs could determine 

through research that the 

technology has value and should 

be installed in all new vehicles. 

Administrative/FMCSA/ 

Medium to High 

Technology Manufacturer 

Grants: Funding for technology 

manufacturers to give free or 

low-cost onboard safety 

technology to companies for the 

purpose of evaluation. 

Carriers and Technology 

Manufacturers: Carriers would 

benefit from low- or no-cost 

evaluation. Technology 

manufacturers could offset costs 

of evaluation for their product. 

Administrative/FMCSA/ 

Low to Medium 

Joint Grants: Evaluation grants 

given to all or some of the 

above-listed stakeholders. 

Carriers, Technology 

Manufacturers, and/or OEMs: 

These groups would benefit from 

low or no cost evaluations while 

working with other industry 

stakeholders. 

Administrative/FMCSA/ 

Medium to High 

Grants to current users of 

technology: Grant money paid to 

carriers who currently use the 

product for evaluation and 

documentation purposes. 

Carriers: Knowledge gained 

during evaluations could be used 

as evidence for additional 

carriers to purchase onboard 

safety technology. 

Administrative/FMCSA/ 

Low 

10 
11 

Table 8. Incentives—Tort Liability (see Appendix A-7) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value 

Liability: Lessening or removal 

of liability for crashes where 

onboard safety technology is 

properly installed and used. 

Carriers: Carriers would have 

less liability and, therefore, an 

incentive to use the product. 

Insurers: Insurers’ risk would 

decrease as liability for those 

who they insure decreases. 

Legislative or Judicial (as 

the result of a court case)/ 

Medium 

Use of Data by Plaintiffs’ 

Attorneys: Prevention of the use 

of the data collected by onboard 

safety technology from being 

used against carrier by plaintiff 

attorneys. 

Carriers: Carriers would have 

less liability, which would be an 

incentive to use the product. 

Insurers: Their risk would 

decrease as liability for those 

who they insure decreases. 

Legislative or Judicial (as 

the result of a court case)/ 

Medium

Table 9. Incentives—Other (see Appendix A-8) 

Incentive Description Stakeholder and Benefits Implementation Type/ 

Primary Agent/ 

Secondary Agent/ 

Incentive Success Value 

Accelerated Depreciation: 

Depreciation of the onboard 

safety technology to accelerate 

for tax purposes.

Carriers: Carriers who chose to 

purchase the technology can 

deduct a capital depreciation 

allowance.

Legislative/Medium

Mandate for Federal and/or 

State class 6 through class 8 

vehicles and/or those 

companies who use such 

vehicles to do contract work for 

the Federal government (such 

as companies who move freight 

for the USPS).

Carrier: Prices for technology 

would decrease as more devices 

are used, and they will offer 

evidence that such devices are 

useful.

Legislative/Medium to Low
APPENDIX A: INCENTIVE CATEGORY DESCRIPTIONS 

A-1. FEDERAL TAX EXPENDITURES 

Federal Excise Tax (FET): For the purposes of this project, five categories of Federal excise 

taxes were analyzed. Two of these can be considered corrective taxes (e.g., alcohol and tobacco), 

a third category is for general items such as telephone use, and a fourth is for retail. Finally, there 

is an excise tax category for those taxes imposed on manufacturers. Only six designated items 

are associated with this tax category: gasoline, firearms, bows, ammunition, fishing equipment, 

and the “gas guzzler” tax. Two other items in this final tax category are a per-pound tax on 

highway tires and a flat 12-percent rate on the sale of trucks. The charge for tires and new truck 

and trailer sales has remained the same since 1990, as have nearly all of the other excise taxes 

above. 

FETs are considered both a tool to raise revenue and change behavior. Exemptions to the Federal 

excise tax are few and targeted to specific populations. For instance, the FET exemptions for 

taxes associated with telephone communications include ambassadors, government agencies, and 

schools associated with religious organizations. This is the general indicator of exempted targets 

across the five categories, and change to these taxes does not occur with great political ease or 

frequency. 

Heavy Vehicle Use Tax: The Heavy Vehicle Use Tax (HVUT) is one collected by the IRS on 

vehicles that weigh greater than 55,000 pounds. There are currently few exemptions from this 

tax, but include a waiver for vehicles that travel less than 5,000 miles per year and one for farm 

vehicles that travel less than 7,500 miles annually. 

Federal Income Tax: Exceptions to Federal income tax laws occur more frequently in order to 

change behavior. These may be in the form of tax credits or tax deductions. 

A tax deduction reduces a tax burden by identifying an amount of money that is deductible, thus 

reducing taxable income for an individual or organization by that amount. For example, the 

Federal government encourages donations to non-profit groups. If $300 is donated and taxable 

income is $1,300 initially, the deduction leads to taxable income decreasing to $1,000. At a 33.3 

percent tax rate the savings will be around $100. 

A tax credit, on the other hand, reduces tax liability rather than taxable income. A useful 

example may be the Energy Credit given to small businesses that begin using solar or geothermal 

energy sources. They receive a tax credit for the amount spent on the purchase and installation of 

that product. Therefore, if a participating business has taxable income of $100,000, is taxed 

$25,000 and spends $5,000 within the boundaries of the Energy Credit, they will receive a credit 

and only pay $20,000 in income taxes that year, thus retaining $5,000 of their initial tax burden. 

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A-2. PUBLIC INFORMATION 

Public information campaigns are generally used to change the behavior of specific populations 

Public information can appear to its audience to be directly from a government agency. The 

th. 

Public information also can be a form of indirect government involvement. The White House 

s: 

, 

In the case of FMCSA incentivizing utilization of a safety technology, a direct government 

 its 

A-3. FEDERAL LOANS 

The Federal government has the ability to create borrowing incentives that encourage or direct 

A Federal loan program is designed and implemented as a direct service of government. In the 

f 

). The 

A less direct and more easily implemented type of program is a loan guarantee program. These 

t 

se the 

by changing the awareness, knowledge, and or opinions of a population. There are many wellknown public information programs, ranging from Stop Smoking campaigns to the recent 

introduction of a newly designed $20 bill. 

Centers for Disease Control and Prevention successfully educates the public on diseases with

pamphlets that list research findings and offer strategies for maintaining a desired level of heal

In this case, it is apparent where the information campaign originates from and for what reason it 

was published. This example of information dissemination is more scientifically centered and 

more focused on specific populations and the changing or informing of what those populations

think and how they behave. 

Office of National Drug Control Policy had an information program that developed the Parent

The Anti-Drug campaign. These campaigns are produced and shown under the name, National 

Youth Anti-Drug Media Campaign, which conceals the fact that the information source is an 

Executive office. With this type of campaign, it is uncertain where the message is coming from

but the message is still apparent. 

approach would enhance the information, through its credibility as a government agency and

expertise in the trucking industry. An indirect campaign might offer the target population the 

appeal of an apparently independent, non-governmental “peer-based” initiative. 

populations to behave in certain ways. This can be done through two forms of loan products: 

Direct Loans and Loan Guarantees. 

case of safety technology, an agency can offer low- or no-interest loans to encourage purchase o

the devices. The government is in charge of directly loaning the money and collecting on 

delinquent borrowers (with components that are sometimes subcontracted to outside firms

largest program of this kind is the Federal student loan program, where students are encouraged 

to attend colleges and universities where the cost may be too high. The tool basically encourages

a more educated population. 

allow loans to be offered through existing private resources, but are guaranteed by a governmen

entity, thus shifting the risk from the lender to the government and allowing for more riskpermissive loan programs. This type of program is much less complex for an agency becau

lending infrastructure is already in place. An example is the Housing and Urban Development 

13
(HUD) loan guarantee program, which offers loans through approved lenders to encourage 

stability among lower income Americans through home ownership. 

A-4. INSURANCE 

Private insurance incentives are not presently a tool that has been successfully and directly 

managed by government. Although it is ideal that private insurance encourage the use of safety 

devices, insurers, like those they insure, are driven by economic and safety forces. Recognizing 

this, it is clear that insurers change premiums for carriers only when economic or safety inputs 

change (i.e., reduced risk, proven safety advantages, and improved returns on investment). 

A-4. CORRECTIVE TAX 

Corrective taxes are used to change behaviors, especially those that negatively affect social 

welfare. These types of taxes are often associated with “sin taxes” such as those excise taxes on 

alcohol and tobacco. 

Although this type of tax may be effective at changing behavior through its coercive effect (with 

increasing effectiveness as penalties increase), they are politically unpopular. Nevertheless, they 

may be appropriate if it can be determined that: 

• Certain safety technologies exist and can be easily purchased and installed. 

• Those devices are effective and diminish accident potential. 

• Not using these devices is harmful behavior that negatively affects society. 

• Revenues can be used to improve safety for those carriers not involved in technology 

purchases. 

A-5. PROJECT GRANTS 

Trucking industry carriers and OEMs occasionally receive direct or indirect grants to participate 

in a project and complete a set of tasks. For example, the U.S. Department of Energy recently 

chose Schneider National and Caterpillar to test truck idling reduction technology. This money is 

used to support activities that the Federal government does not have the ability or resources to 

accomplish, or to focus on activities that would be more appropriately completed by industry. 

The result of projects such as the one described above offer insight as to whether certain products 

can support the goals and objectives of the sponsoring agency. These results can be shared with 

the larger population that the agency or office regulates in order to influence their knowledge 

base, behaviors, and activities. Thus, public information and project grants are tied closely with 

one another, because validating an objective and disseminating related information are often 

necessary in changing behavior. 

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A-6. TORT LIABILITY 

One theory holds that tort liability may reduce the burden on government agencies to “protect” 

citizens by transferring financial damages to other involved parties. It does so by allowing 

citizens who are harmed by individuals or organizations to hold those parties financially liable 

for their actions in civil courts. Another theory proposes that excessive tort liability raises risk 

and hinders product development and adoption. The resulting logic, promulgated by industry, is 

that revising tort law will increase technology utilization and data-sharing. 

Tort reform can take place through judicial acts or through an act of Congress. An example of a 

judicial act is the 2003 Supreme Court case State Farm versus Campbell with a court-set 

precedence that excessive punitive damages violated due process after Campbell was awarded 

$145 million. Legislative bodies can also play a roll in limiting liability. The Y2K Act prevented 

those who received damages due to the year 2000 computer glitch to collect on those damages. 

In the case of data or information privacy, the Health Insurance Portability and Accountability 

Act (HIPAA) has been created to protect privacy controls that individuals have over their 

medical records and has impacted use of that information in civil law. 

A-7. OTHER: INCENTIVES CYCLE AND STAKEHOLDERS 

The incentive cycle flow and the relationship among the five stakeholders are shown in Figure 1. 

Figure 1. Incentives Cycle and the Five Stakeholders 
REFERENCES 

LITERATURE 

American Transportation Research Institute (ATRI) and Gartner G2, Inc. 2003. Trucking 

Technology Survey Results Summary. 

American Trucking Associations, Inc. 2003. American Trucking Trends 2003. Alexandria, VA. 

American Trucking Associations, Inc. 2003. Annual Trucking Industry Insurance Survey, 

Alexandria, VA. 

American Trucking Associations, Inc. 2007. U.S. Freight Transportation Forecast to 2018. 

Arlington, VA. 

Annual State and Federal Highway User Taxes on a Typical 5-Axle Tractor-Semi Trailer 

Combination. December 2007. Available at: http://www.atrionline.org/state/data/highway_tax-1205.pdf. 

Berry, David. What Drives Fuel Prices? June 2004. Testimony of the American Trucking 

Associations, Inc. (ATA) Before the U.S. Senate Committee on Energy and Natural 

Resources. June 2004. 

Transport Topics. Class 8 Truck Sales Drop 53.1% In Oct. on Weak Freight Market.

November 19, 2007, p. 1. 

INTERVIEWS 

Interview with Assistant General Counsel, American Trucking Associations 

Interview with Vice President of Engineering, American Trucking Associations 

Interview with Vice President of State Laws, American Trucking Associations 

Interview with Government Liaison, Internal Revenue Service 

Interview with Minnesota State Director of FMCSA 

Interview with Executive Director, National Accounting and Finance Council 

Interview with Insurance Researcher, Liberty Mutual 

Interview with Insurance Underwriter, Great West Casualty 

Interview with Principal Engineer, Volvo Trucks of North America 

Interview with Operations Manager, Boyle Transportation 

Interview with Safety Director, Schneider National, Inc. 

Interview with Vice President of Technology, US Xpress Enterprises, Inc. 

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Interview with Policy Director, Commercial Vehicle Safety Alliance 

Interview with Government Regulations Manager, National Truck Equipment Association 

Interview with Intellectual Property Attorney