Month: October 2018

If you’ve been on the road for long, you may remember that the driving age for interstate commercial transportation is 21 years old. According to the Department of Motor Vehicles, a potential driver can obtain their commercial driver’s license (CDL) at 18 today, but only to drive within a given state’s lines. To haul across the country or handle hazardous materials, 21 is the minimum age. But lawmakers are now considering a bill proposed that would allow 18-year-olds to legally drive 18 wheelers nationally. Truck driving is a lucrative opportunity for young people and the industry is vying for new drivers. While lawmakers argue that this bill would ease the driver shortage, truckers around the country raise concerns over safety on the road.

Why Do We Need to Change Driving Age Laws?

Senator Duncan D. Hunter, a Republican from California, proposed the bill in March of 2018. Younger drivers have always been on the lower end of age demographics in the trucking industry. According to this chart supplied by the American Transportation Research Institute, drivers aged 20 to 24 made up less than 10% of the force in 1994, 2003 and 2013. In 2013 specifically, that percentage fell below 5%.

It’s no secret that the commercial transportation industry is undergoing a driver shortage. For example, the American Trucking Association reported in October of 2017 that the national trucking shortage reached 50,000 drivers—and this number could rise to 174,000 by 2026. Companies have increased pay and benefits in an attempt to incentivize potential drivers. In fact, some economists argue that wages in the trucking industry are still far below the necessary threshold to attract workers. If companies continue to raise wages in order to attract or keep drivers, this is likely to greatly ease the shortage.

But what happens when these measures aren’t enough? Senator Hunter argues that lowering the interstate driving age would positively impact young people with high school degrees who want stable, well paying careers. After all, the average income for a truck driver is still around $60,000 per year. Because many truckers are now retiring, it’s crucial that enough new drivers are hired within the next 10 years.

The Bill and Safety Concerns

On top of this, young people age 18 to 20 have the highest unemployment rate of any age group. This makes sense: industry opportunities aside from the military or higher education are scarce. Truck driving is a stable career with opportunity for upward mobility and pay raises. Compared to the limited similar opportunities in the retail, food service or construction industries, commercial transportation and commercial truck driving is worth diving into young.

The trucking community largely argues that bestowing drivers so young with this much responsibility is risky. This concerned is founded: In 2016, the Center for Disease Control actually reports that teenagers aged 15-19 years old were responsible for 8.4% of the total costs of motor vehicle injuries relative to their 6.5% of the U.S. population. Similarly, commercial vehicle drivers between 19 and 20 years old are six times more likely to be involved in fatal accidents. Younger drivers simply have less driving experience overall, not just with semi truck driving. Not only is preventing dangerous accidents a priority for truck drivers, semi truck accidents could lead to costly damages to loaded goods. Many believe that the industry would benefit more from direct improvement strategies than throwing cheap labor at the problem.

The Upside of Younger Drivers Nationwide

On the other hand, proponents of the bill argue that the drivers under 21 would be required to jump through preventative safety hoops. This includes an apprenticeship program requiring 400 total hours on-duty with 240 of those hours under supervision of an experienced driver. It gets better: all training trucks will have cameras and a maximum set speed of 65mph.  Senator Hunter also points out that there are already 18 and 19 year old drivers on the road anyway and that this change wouldn’t have a significant impact on road safety. But opportunities for work and advancement are more scarce within a single state’s lines as a driver, especially if your state is particularly small.

Providing extra incentive to young people considering a commercial driving career could promote relief from the driver shortage. Although there are safety concerns to consider, many believe that this law change would do more good than harm. A pilot program by the Federal Motor Carrier Safety Administration is set to launch at the end of this year, allowing 18 to 20 year-olds with a military commercial driving license to drive interstate in the U.S. As for other young drivers, the legislation is still out.

To learn more about your options to finance a commercial vehicle as a first time buyer, visit https://www.missionfinancialservices.net or read about how to obtain your commercial driver’s license.

You don’t often hear about high profile trucking cases gracing the supreme court. But that changed this fall with New Prime v. Oliveira, which could influence hundreds of thousands of American truck drivers and even consumers. Why is this case important, and what do truck drivers all over the country need to know about this case? Learn more about the scope and impact of New Prime v. Oliveira.

Dominic Oliveira filed suit three years ago against New Prime trucking company, a commercial transportation company that specializes in flatbed, refrigerated, tanker and intermodal divisions. Dominic Oliveira claimed that the company neglected to pay him even minimum wage and charged him for working. An incomplete panel of Supreme Court justices heard the case on Wednesday, October 3rd and considered the arguments.

Oliveira claimed that New Prime violated the Fair Labor Standards Act (FLSA) and that the company did not treat him as an owner-operator but rather as an employee. Oliveira claimed in the suit that New Prime controlled his work schedule and dictated him as an employee. According to the United States Department of Labor, the consequences of independent contractor misclassification include missing benefits like overtime, medical leave, unemployment insurance and a safe workplace.

If you’re new or unfamiliar with the trucking industry, there are two types of drivers on the road. Company drivers are usually employed by a company and paid cents on the mile. This might vary depending on the type of route you drive, as well as the division. Independent contractors, also known as owner-operators, usually make a percentage of their bill for each freight load. Independent contracting has several coveted advantages. As an independent contractor, drivers get to choose and finance their own semi truck or commercial vehicle. Owner operators are also posited for tax advantages and get to be their own boss. This means choosing your own hours, choosing your own holidays, and potentially building your own business.

Driving as an independent contractor has higher earning potential that employment as a company driver, but that doesn’t always ensure it will deliver that potential. The arrangement between owner operator and businesses should be mutually beneficial because companies can shell out less for labor while drivers take a percentage for their work. Independent contractors can cost companies up to 20% less than other employees according to CNBC. Trouble arises when it’s unclear if a driver is properly categorized as an independent contractor. Were Dominic Oliveira an employee of the company rather than an independent contractor, he would be owed compensation for any miles or hours spent driving.

This widely publicized case holds companies accountable for dodging lawsuits. According to the National Employment Law Project, the risk in these cases is that companies will lean on the Federal Arbitration Act to sidestep responsibility for underpaying workers. While it’s true that some trucking companies offer higher wages, bonuses and benefits to incentivize workers to sign up amongst a driver shortage, this isn’t universal. This case could be a breakthrough for American commercial vehicle drivers by forcing higher wages. This debate isn’t new, either: Fedex, Uber, and Amazon have all been in the hot seat for independent contractor related misclassification.

Higher Wages Mean Higher Prices for Consumers 

Thanks to external concerns like capacity shortage and a looming trade war, some experts are concerned about the effect of this supreme court decision on consumer prices. According to CNBC, consumers could wind up seeing an increase in prices between 10 and 20 percent. This could have lasting effects on the commercial transportation industry and semi truck drivers everywhere.

Case Outcome 

Oliveira’s case rested on the claim that his job, schedule and responsibilities were dictated by New Prime just as any other company employee. This would defeat the purpose and entire benefit associated with working as an owner-operator. Some state reforms have taken on this debacle, and the federal department of labor is intended to prevent unfair treatment of workers. Incorrect worker classification even impacts the government’s revenue due to taxes, workers compensation funds and unemployment insurance. Ultimately, the district called for further investigation to determine if Oliveira should rightfully be classified an employee or an independent contractor.

Positives On the Horizon For Truckers

Ultimately, pursuing your CDL and managing your own LLC as an owner operator is an empowering and lucrative opportunity. Cases like New Prime vs. Oliveira encourage companies to value the needs and rights of their employees. This case could be a turning point for semi truck owner operators everywhere by driving wages. New Prime vs. Oliveira has the potential to strengthen the integrity of the bond between commercial vehicle drivers and trucking companies. To learn more your options for financing your commercial vehicle directly or through a dealership, visit https://www.missionfinancialservices.net today.