On November 4, the Department of Labor’s Occupational Safety and Health Administration announced that employers with 100 or more employees must either ensure the complete vaccination of their staff, or obtain negative COVID-19 test results weekly. This ETS (Emergency Temporary Standard) requires full vaccination for all employees and paid time off for those needing to get vaccinated during their workday. And while the vaccination mandate goes for all covered employers, it does offer the exception for those willing to establish and enforce weekly COVID-19 testing along with mandatory face coverings while at the workplace. However, this alternative still upset those working in the trucking industry and the supply chains, which are currently fragile, leading to several legal challenges.
So, what does this ETS mean for drivers and others in the trucking industry moving forward?
How does the vaccine mandate affect businesses?
When the Biden Administration announced their latest vaccine and testing requirements, many private businesses, including travel-dependent industries, were left worried about the effect the mandates could have on their businesses. Specifically for the trucking industry, many drivers threatened walkouts and resignations to disrupt further the strained supply chains that have been suffering since early this year. However, as previously mentioned, there are a few exceptions to the requirements.
The current ETS regarding COVID-19 requirements for workplaces with over 100 employees include:
- Businesses must ensure total vaccination for all employees come January 4, 2022.
- Employers must provide paid time off to their employees obtaining the COVID-19 vaccine(s).
- On January 5, 2022, all unvaccinated employees must wear proper face coverings while at their place of work, as well as provide weekly COVID-19 tests with negative results.
- These rulings will supersede any and all state or local laws, including “laws that ban or limit an employer’s authority to require vaccination, masks, or testing.”
Who is exempt from the vaccine mandate?
With the trucking industry facing a severe driver shortage of approximately 80,000 drivers, White House and OSHA officials knew they would need to offer some exceptions. With hopes to avoid further driver depletion and supply chain disruption, which is responsible for things like food, fuel, medicine, and even the COVID-19 vaccine, they developed a shortlist of exemptions.
These exemptions include:
- Workers who do not report to a workplace where other people, including employees, clients, and/or patrons, are present.
- Those who do not interact with persons at their point of departure or destinations.
- Workers who operate alone (aka drivers who are alone in their cabs)
- Remote employees
- Exclusively outdoor workers
To the American Trucking Association’s delight, these exemptions apply to a large portion of the commercial truck driver population and provide a sense of security to the industry as a whole. Overall, the mandate would only apply to drivers operating in teams or those required to interact with others at their loading or unloading stations.
What about international and cross-border truckers?
For drivers who cross borders to deliver goods, the mandate requirements are different. As of right now, both the U.S. and Canadian governments are requiring non-citizens to be fully vaccinated, regardless of their reasons for entry. And come January of 2022, the Department of Homeland Security will require all foreign travelers coming into the country to provide proof of total vaccination, an extension to the non-essential traveler requirement, which started in November of 2021. To meet this requirement, one must be fully vaccinated with any vaccine, including Pfizer, Moderna, Janssen/Johnson & Johnson, AstraZeneca, Covaxin, Covishield, Sinopharm, or Sinovac. However, if the vaccine requires two doses, the last dose must be administered within 14 days before entry.
Want more information like this? Check out these articles:
→ Are Truckers Included in the Third Vaccination Group?
→ How Truckers Can Prepare for the Holiday Season Amid COVID-19
→ How the Supply Chain Problem Will Affect the Holiday Season
The COVID-19 pandemic will surely go down in history as one of the most chaotic times the world has ever experienced. Essential workers sacrificed their health and stretched themselves thin for the American people, spending many hours away from their homes to meet the increasing pressure brought on by restrictions and regulations.
As people begin recovering from the effects of the pandemic and vaccines are distributed throughout communities, many industries are forced to relook at how they handle business. So, what does this mean for the trucking industry in this post-pandemic era?
Why Fleets are Experiencing 2021 Prosperity
Since the beginning of the pandemic, consumers have continuously relied on online platforms for their wants and needs. And as businesses open back up, many flock to the sight of normalcy, leaving companies in need of constant supply. This consistent demand has fallen on the backs of truckers nationwide and has many freight companies stretched thin.
In May alone, total spending on freight surged to a record 50% year over year, while shipping volumes swelled to a whopping 35%, making this year the second-highest index level ever recorded. “It’s safe to say the pandemic recovery is progressing much faster than the recovery from the Great Recession,” according to the Cass Freight Index.
However, this overwhelming need has ultimately led to an intense growth in domestic shipping rates, and in turn, a shortage in freight vehicles and drivers. With consumerism at an all-time high, the demand for technological advances, logistical adaptations, and competitive packages are needed within the trucking industry now more than ever.
->*Used Truck Prices Continue to Skyrocket
Technological and Logistical Adaptations
During COVID-19, the logistics were constantly changing, leaving fleet operators looking for the most efficient way to deliver goods. Fleet carriers, suppliers and drivers were forced to adopt new technologies in order to communicate and operate.
Support teams scrambled to set up shop from their new home offices, onboarding and training employees in tandem on complex software applications to optimize routes, and learn contactless payment systems to reduce exposure.
All the headaches and changes have to lead to a safer, happier, and more productive supply chain and delivery system. The dream of being able to bump the docks and roll onto the next load and enjoy the high tide of “The Era of Post COVID Trucking” is alive as well.
The Future Looks Bright
“We’re just in the beginning stages of this very robust recovery,” said Bob Costello, chief economist at American Trucking Associations. “Some younger people have never seen an economy grow like this before,” he said. “People in their 20s and early 30s have never seen anything like this over a sustained period of time.”
The trucking industry will continue to experience growth in the coming months as long as fleets continue to hire more drivers and balance out the supply and demand issue. Enticing workers to become professional drivers will be (and has been) the primary obstacle for the freight market.
“I’m hopeful that we’ll start seeing people come back into the job market … and we get a closer balance between supply and demand, and that holds up in ’22 so that we don’t see rates come down too substantially and put the market into another freight recession like we saw in 2019,” said Hugh Ekberg, CEO of diversified carrier CRST.
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*Improving Fulfillment Efficiency During a Pandemic
We have officially passed the grim one-year mark since the first COVID-19 case was diagnosed in the United States. Since then, the trucking industry faced massive unemployment for a period of time and now faces a shortage of drivers due to several pandemic-related factors. With the global health crisis still in full-force, long-haul drivers must still be vigilant about protecting their health while on the road. The good news is, the United States is currently distributing multiple vaccines, meaning the country is on its way to returning to some semblance of normalcy. But when will long-haul truck drivers be eligible to receive the vaccine?
What are the Vaccination Phases?
The Advisory Committee of Immunization Practices (ACIP) and the Centers for Disease Control and Prevention (CDC) established a recommended vaccination schedule detailing when specific population segments should be vaccinated. The proposed vaccination schedule was designed to find a balance between prevention of morbidity and mortality and preservation of societal functioning—in other words, preventing as many unnecessary deaths as possible while protecting the economy.
The first round of vaccinations has been broken up into three phases:
- Phase 1a – Includes residents of long-term care facilities and healthcare personnel
- Phase 1b – Includes persons 75 years of age or older and frontline essential workers
- Phase 1c – Includes persons 65-74 years of age, persons 16-64 years of age with high-risk medical conditions, and other essential workers
You may be asking yourself, “Where do truckers fit into this plan?” That’s a great question. Since early December, the American Trucking Association (ATA) has been pushing the federal government to include truckers in phase 1b as frontline essential workers due to the massive role truckers play in the distribution of vaccines. Originally, transportation industry workers were included in Phase 1b because of the risks posed to the health of unvaccinated truckers while on the road. The CDC has since updated its vaccination plan, moving the transportation and logistics sector to Phase 1c.
States Control Vaccine Distribution
Here’s where things get tricky. Neither the CDC nor ACIP has the power to enforce who receives a vaccine in each phase or the vaccination schedule; these decisions are ultimately left up to the discretion of state governments. According to data from the Kaiser Family Foundation (KFF), only 33 states have adjusted their Phase 1c groups to reflect CDC and ACIP updates; of these states, only 17 follow ACIP recommendations. Many states have expanded the age range compared to the recommendations while some states have implemented even stricter requirements for the essential worker designation.
Further complicating the issue is the fact that states are moving at very different paces to try and vaccinate all of their residents. The majority of states are in Phase 1a of the vaccination process while 10 states and the District of Columbia have moved on to Phase 1b. Very few states, like Michigan, have begun Phase 1c of vaccination. Stay up to date on Phase 1 vaccination roll-out by checking with your state and local governments for their specific vaccination schedule.
Some Drivers Need the Vaccine More Than Others
Even within the transportation industry, there are specific groups of truckers who face a much higher risk of infection than others. For example, package delivery drivers often interact with the general public in their day-to-day routine, making it important for them to get vaccinated as soon as possible.
What about long-haul truck drivers? While they may not have as much public interaction as delivery drivers, truckers do face an increased risk of infection while on the road. The average long-haul driver spends 300 days each year on the road. That means for 300 days, truckers use public facilities for bathrooms and showers, eat at public restaurants, and interact with officials at truck stops and weigh stations. The ATA has tried multiple times to get long-haul drivers designated as Phase 1b frontline essential workers, noting that more than 80% of U.S. communities rely exclusively on trucks to receive necessary goods.
As previously stated, individual states have the ability to make their own vaccination schedule, depending on their needs. For example, both Georgia and Massachusetts expanded their Phase 1b to cover all essential workers, long-haul drivers included. Navigate to your state’s website to find more information on its vaccination roll-out schedule.
Days are becoming colder and shorter, festive lights are appearing on every street, and fleets of semi-trucks are working to move holiday goods in tandem with their essential deliveries. This peak season, you can anticipate a 10-20% increase in your mileage as you travel the U.S. to transport products and meet high consumer demand. The combination of demand, winter road conditions, and the restrictions of the COVID-19 pandemic can lead to truckers feeling more pressure than usual.
Not to mention, this year, companies like Amazon and UPS plan to fill over 100,000 seasonal distribution jobs throughout the United States. As these large retailers hire seasonal workers, the demand for shipping providers will mirror the growth—which means you need to prepare yourself and your rig before starting on a busy haul during peak season. In this blog, we will discuss how you can prepare, get ahead of your competition, and reach your maximum earning potential while staying safe and enjoying the holidays.
1. Preventative Maintenance
Caring for your rig is crucial to the survival of your operations. A great way to start the caretaking process and prepare your truck for peak season is through preventative maintenance. If your truck has recently been idle for an extended period, you could be looking at rusted parts, sludge where there once were fluids, and other potentially critical issues. With the holiday season approaching, take your semi to a mechanic to perform a full inspection; they can then handle any necessary maintenance, like an oil change or hose replacement. While this may seem like a costly process, it could mean the difference between a successful season and a broken-down rig. In the long run, taking care of your truck will keep you safe and your truck running smoothly all season long—which means more jobs and greater revenue.
2. Vary Freight Sources
When COVID-19 forced America to shut down, around 88,300 drivers lost their jobs in April alone. This hit was devastating to the trucking industry, and it caused many owner/operators to reevaluate how they run their fleet. As technology progresses, mobile apps and load boards are on the rise in popularity among drivers. A source like DAT keeps up with the industry’s varying factors, like the economy or the weather. Technology can also provide real-time updates and insights to keep you in touch with your supply chains and help obtain your maximum earning potential.
On top of mobile apps and load boards, you can work with companies like Amazon, Walmart, Target, and more. As e-commerce demand sets new records year after year, the holiday season continues to see spikes in spot rates as companies meet their contract limitations but rush to keep up with shipping demands brought on by the COVID-19 shutdown. Spot rates have hit a record high of $2.37 per mile this year and will most likely surpass that number in these next few months. Keep an eye out for these job openings over the next couple of months.
3. Revisit Your Insurance
Another way to prepare for this unique holiday season is to revisit your insurance. The COVID-19 pandemic brought immeasurable amounts of uncertainty, and it’s during times like these that insurance becomes crucial. While commercial trucking insurance is one of the more expensive components of owning and operating, it reduces the majority of your expenses and covers you in the event of an accident. With the winter weather bringing harsh weather conditions, your chances of an accident increase, making peak season the perfect time to reach out to your provider and reevaluate your damage and rental coverage.
4. Practice COVID-19 Protocol
Possibly the more obvious way to prepare for the COVID-19 holiday season is to familiarize yourself with the standard protocol. As you travel, you’ll find yourself in unfamiliar locations; plan your route by keeping in mind where you can eat, sleep, and refuel. Restaurants and fast-food locations across the country have had to change their operation hours, so you’ll need to consider that when planning your route. On the bright side, some of these restaurants are providing discounts and other offers for the inconvenience. These can be found under the International Franchise Association at franchise.org.
The same restrictions and benefits go for accommodations as well. Try to limit your exposure by decreasing the number of times you interact with frequently touched objects and disinfect these objects and surfaces when you can. Stay socially distanced from others during stops or when loading and unloading, and use a proper face covering in public. Wash your hands after visiting a location or handling items like clipboards or other frequently touched objects. To keep up with state and local regulations, use government resources like the CDC, ATA, CVSA, FMCSA, FHWA, and the SBA.
Now that you know what it takes for a successful peak season, it’s time to get to work.
While this year has higher shipping demands due to COVID-19, the holidays have always come with their own set of challenges. Read our post, How the Holiday Season Impacts the Trucking Industry, to see what obstacles the holidays present and how to overcome them.
A lot of things are up in the air in light of the COVID-19 pandemic. If your business had just decided to put money down on future investments, or didn’t have much squirreled away to begin with, it can be difficult to trust the market to keep your business going steady—no matter if you’re an independent O/O or a fleet owner.
A survey Overdrive sent out in May found that their readers’ number one concern was freight pricing. Their second biggest concern? Cash flow.
These issues are pretty severely entangled with one other. Recently, we’ve seen some owner/operators in the perfect positions, geographically, start making money hand over fist, whereas other O/Os (only a couple thousand miles away) lost money every day driving half-full or even totally empty trucks. While there is some strategy available to maximize your business success during this uncertain time in freight, there are some problems that won’t budge without a heap of capital behind them.
Below, read our guide on the best ways to find financing during the pandemic.
Start with a PPP Loan If You’re Eligible
Paycheck Protection Program loans from the government’s Small Business Administration are, hands down, one of the most cost-effective ways to finance your business. These loans are designed to help small businesses pay their employees while the economy is slowed due to the coronavirus. As long as you do the proper research and only spend PPP loan funds on designated expenditures, your loan will be entirely forgiven once the term ends.
Unfortunately, these loans don’t always have the best legs. For some employers, a PPP loan will make sure you and your employees keep getting paid, but only for a time period of two to three months. But if your business hasn’t picked back up by that time, what will you do?
Research Private Lenders
If you haven’t been able to get a hold of a PPP loan, or you’re worried about what will happen once that loan runs out, it’s time to start researching and comparing private lenders. Financing is an important part of the job as an independent owner/operator, fleet manager, or truck dealership.
Most people won’t have $40,000 to $100,000 lying around to purchase a new rig for their business outright, and dealerships will always need large amounts of capital to meet the fluctuating demand for different semi tractor-trailer models. As a result, financing purchases has become the norm for O/Os and dealerships alike. While it can be more difficult to find favorable options as a dealership owner, there are plenty of options available to someone looking for private financing for a dealership.
Keep Your Eyes Open for Bad Deals
When financing a new truck, it’s crucial to take the process slowly and read all of the literature given to you by the lender. For the most part, your options as a future owner/operator include either taking an upfront traditional loan to finance your truck, or you can lease a truck for a certain period of time. Often, the comparison between these two options can be where a bad faith lender will try to take advantage of truckers new to the game—so it’s especially important to research which of those options best suits your lifestyle before you ask for cash.
Long leases will generally be more expensive in total than conventional loans, and they’ll leave you with no property to sell at the end of the deal to help recoup what you’ve paid. But if you’re worried about the market or expect to spend only a fixed amount of time in trucking, leasing your truck has the potential to be the most cost-effective option.
If You’re Buying, Save as Much as You Can Ahead of Time
The logic here is simple: Any money you can put down on your truck on Day 1 is money you don’t have to pay interest on. In addition to your credit history, having a large amount of capital on hand can act as collateral and help you get the best possible loan package. Plus, truck costs won’t quit once you’ve got your truck all to yourself. The first months with a new truck will inevitably be filled with small optimizations—technology changes, small additions, and the occasional stylistic upgrade. In order to make your truck the most comfortable and efficient it can be, you’ll need some cash set aside.
Contact a Lender You Can Trust
Always choose a lender with a long history in the business. Mission Financial has been providing truck financing for decades to owner/operators, dealership owners, and even capital to help keep your commercial fleet up and running. Contact us if you still have questions about the best ways to stay afloat throughout the coronavirus pandemic.
For over a year now, online shopping has accounted for more retail purchases than those in traditional brick and mortar stores. From even that point of dominance, there are some reports that online shopping surged as much as 248% at the end of May. That’s drastically changed supply chains around America, and it’s one of the reasons why the freight industry in general, which has been given the attention it needs to stay operational throughout the pandemic, has continued to stay so stable, and even grow during a time that other industries have languished.
Where are the Bottlenecks in America’s Supply Chain?
While it’s true that America’s been short on trucking manpower for some time, there are additional reports that overall demand for truckers has decreased, thanks to a shift in supply chain demand. As mentioned in previous articles on our site, global demand for gas and petroleum products has diminished greatly, so much so that tanker traffic is nearing an all time low in the states. This shift has in effect counteracted the global increase in online shopping. Even still, packages from some retailers and geographical locations are still slated to reply months after their expected delivery date. So what gives?
Warehouses are Still Getting Up to Speed
In some areas, truckers are effectively waiting for warehouses to increase efficiency enough to deal with the new normal level of input and output. Warehouse reconfiguration, the integration of robot technology, and always-on scanning are just some of the ways that warehouses are trying to meet the new demand, but it’s not an instantaneous adjustment.
Semi-Truck Drivers’ Routes Are Less Efficient As a Result
Empty trucks are a big problem all across North America at the moment. There have been reports of Canadian carriers driving empty trucks to the U.S. to pick up food items to transport back north, said Stephen Laskowski, president of the Canadian Trucking Alliance. Normally, they’d be full of manufactured goods from Canada to deliver to the U.S., but according to Laskowski, the demand has shifted in a way that that simply isn’t feasible. Hiccups like this have a widespread effect on the trucking industry. In one place, driving empty trucks might result in more total miles needing to be driven in one particular area, which can drive up trucker’s average pay per mile (which is an effect we’re starting to see in the majority of States.
Where Truckers Have Been Finding Help
The Federal Motor Carrier Safety Administration (FMCSA) has expanded its national emergency declaration as of the middle of last March in order to provide hours-of-service regulatory relief to commercial vehicle drivers transporting emergency relief supplies in response to the coronavirus pandemic. The “FMCSA is providing additional regulatory relief to our nation’s commercial drivers to get critically important medical supplies, food, and household goods to Americans in need,” FMCSA Acting Administrator Jim Mullen said March 18. “The nation’s truck drivers are on the front lines of this effort and are critical to America’s supply chain. We will continue to support them and use our authority to protect the health and safety of the American people.”
Expansion to the FMCSA’s hours of service include:
- Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19
- Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap and disinfectants
- Food, paper products and other groceries for emergency restocking of distribution centers or stores
- Immediate precursor raw materials — such as paper, plastic or alcohol—that are required and to be used for the manufacture of essential items
- Equipment, supplies and persons needed to establish and manage temporary housing or quarantines
To make sure those drivers who are on the road have a safe place to stop, shop and rest, the National Association of Truck Stop Owners has said its members intend to remain open and continue to serve the professional drivers who are transporting supplies and goods in support of COVID-19 emergency relief. The American supply chain changes in efficiency every single day, but the American government has continued to roll out support for truckers at a rate that’s kept supply chains largely intact, and the trucking industry stable.
If you’re interested in helping important supplies reach American citizens, contact us for more information about how to start financing your new semi-truck.