Assessing tax: 2010 Tax rate benchmarking study for the Transportation & Logistics industry

Over the past year, PwC has engaged senior tax executives in the industrial products and services industries in regard to the key issues they are facing in the midst of the changing tax and accounting environment. Because of record United States (US) budget deficits coupled with high unemployment and slow economic recovery, the administration's tax legislative proposals could have a meaningful impact on US inbound and outbound companies, individuals, and small businesses. The discussions held with clients and other tax/industry influencers have helped us identify recurring trends regarding the administration's tax proposals and other critical matters.

We have reviewed key tax ratios and their drivers for some of the world’s largest companies in the Transportation & Logistics industry. The report reflects the start of the worldwide financial crisis that affected so many companies in the fourth quarter of 2008, when a sudden decline in global demand led to a severe recession. Companies responded in different ways, some by withdrawing from unprofitable businesses, merging with other operations, restructuring obligations, lowering output, or reducing workforces. The focus of this activity was to enhance cash flow. As companies now increase their focus on managing tax, many are benchmarking their tax ratios against their peer groups to identify areas for savings. These studies provide our clients insight into average key tax ratios for the different industries, trends in these ratios over the last three years, and drivers of the ratios.

Analysis highlights include:

  • Noteworthy trends influencing the study results
  • Charts and graphs depicting effective tax rate, total contribution made by the industry, and cash tax rate
  • Drivers of the effective tax rate
  • PwC’s point of view of the industry trends and analysis