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How the Coronavirus is Affecting the Freight Industry

What Truck Drivers Should Expect This Spring As the Coronavirus Spreads 

The infection rate of Coronavirus, also known as COVID-19, is continuing to increase in countries around the world. Some experts claim that America’s trajectory of infection is in-line with Italy’s, which indicates that the overall number of infections will continue to increase into the coming months. Currently, there’s a high level of general alarm for members of the service and restaurant industry, as the White House has delivered specific instruction to the American people to work from home whenever possible, avoid social gatherings, and avoid going outside. The U.S. treasury is considering sending every adult American a check in the mail to help tide them over during these difficult times – and the trucking and freight industry have also seen some recent government intervention.

Government Declares Truckers are Essential to the Economy

There’s been concern for the trucking industry specifically, and a level of attention that generally bodes well for freight companies and owner/operators. The U.S. government has recognized that now more than ever, it is absolutely crucial for semi-truck drivers to be able to stay on-the-job during the outbreak of COVID-19, so that food, medical supplies and equipment, and other necessities can be readily replenished in areas across the country.

President Trump has relaxed trucking regulations in response to this need, rolling back a law that’s been in place since 1938, which disallows truck drivers from working more than 11 hours per any 14 hour work period. After that period, truckers are required by law to take a break for at least 10 hours. This keeps the total number of hours a trucker is allowed to be on the road at 11 hours per day maximum. With this law no longer being in effect, truck drivers are able to manage their own schedules more freely should their carrier companies oblige them, of course. If you’re an independent owner-operator, this puts a lot more of the safety precautions associated with truck driving on your own personal judgement, which makes it vital to operate responsibly during this time.

Truck Drivers and the Risk of Infection

According to an article by Business Insider, truck drivers are in a unique position as to how they should follow the White House guidelines for work moving forward. Truck drivers are not in a position to work from home and are often forced to come into contact with other individuals when they purchase food or enter a rest stop. Truck drivers rely on foodservice employees and custodians around the country to ensure that the services they require to move products across the country are infection-free.

Truck drivers are at increased risk compared to the average American according to a 2014 study that claims up to 38% of truck drivers do not have health insurance. The article also cited studies that found long-haul truckers to smoke cigarettes at a higher rate than most Americans, which has the potential to exacerbate coronavirus symptoms according to Epidemiologist Saskia Popescu, who practices at the Honor Health medical group in Arizona. The FMCSA has estimated that the government’s decision to relax trucking regulations will result in $274 million in savings for the U.S. economy, but it’s difficult to say whether those savings may be offset by semi-truck operators contracting COVID-19 at an increased or decreased rate than the general population.

Businesses are Working to Keep Truckers Safe

Freight companies and companies that manage rest stops have been outspoken in their role of reducing infection. Walmart has been circulating information to their drivers, urging them to take proper steps to keep their hands and cabs clean of infection. Pilot offered in a statement to Overdrive, that they are reinforcing proper cleaning procedures and sanitation methods, saying “Additionally, we have hand sanitizer dispensers for public use near the restrooms at our locations and working closely with our suppliers on inventory contingency plans. We will continue to follow the advice of global and local health authorities as the situation evolves and take preventative measures as necessary.”

If you’re an owner operator running familiar routes, it may be worth investigating whether your favorite dining establishment or rest stop has issued a statement for how they’re planning to adapt to the coronavirus update. Many businesses are moving their business models towards transactions that don’t involve human contact, and those services can be helpful for reducing your own risk of infection when you’re on the road.

What Will Trucking Look Like through the Spring?

There have already been strong movements to keep the trucking industry virile during this time of change in America. It’s vital for freight companies to maintain operation in some degree, so that food service providers, manufacturers, and hospitals can continue to operate at an appropriate efficiency level. One of trucking’s most powerful lobbying groups, the ATA, has recently requested provisions for the industry, and it’s likely that the executive branch will continue to adjust trucking regulations in the short term to keep the industry healthy. There’s currently a national driver shortage in America, which means that truck drivers are one of the few labor areas that could see increased demand during the outbreak

How to Maintain Healthy Driving Practices

Some news outlets have offered advice on how to stay safe during the outbreak, which can be useful resources, but it’s always best to refer directly to the CDC, World Health Organization or your Government’s official correspondence about the Coronavirus when making changes that affect your lifestyle. If you’re lucky enough to be driving an EV vehicle, there’s a good chance you’ll cut down your risk of exposure. Being extra cautious during fuel up times, or finding ways to decrease fuel consumption can be a great way to reduce stress and keep yourself healthy as well. Contact us with any questions you might have regarding how to be successful as an owner-operator, and make sure to browse our news section for the outlook of long-haul trucking in 2020. Thank you to all of you brave, hardworking truckers out on the road!

New Infrastructure Investment May Benefit Trucking Industry

The President released his proposed federal budget for the 2021 fiscal year on February 10. The proposal titled “A Budget for America’s Future” has allocated $1 trillion of its $4.8 trillion total budget to infrastructure, and a great deal of that should positively impact the trucking industry should it be approved.

$50 million is slated to go towards the Moving America Safely and Efficiently Program, which is described as intending to disburse money to programs aimed at opening up bottlenecks and “adding capacity, deploying effective technologies, and expanding truck parking infrastructure,” according to the budget request. This is good news for truckers, and it’s likely that this change along with others in the bill will help increase America’s highway capacity for truckers and increase overall freight efficiency. The budget requests more than $800 billion for a 10-year reauthorization of surface transport programs by the federal government, which effectively renews and bolsters the FAST Act of 2015— a $305 billion infrastructure bill that’s set to expire in 2020.

What Should We Expect to Change?

In general, it’s difficult to speculate on how much the average owner-operator is going to see in terms of change to their regular truck routes after 2020. For starters, the budget that the Trump Administration proposed isn’t yet set in stone. As with all presidential budget proposals, this document serves as a template for Congress to work from when constructing their own official budget. In a way, this proposal serves as a starting point when it comes to broaching budget changes to the American people, which can help members of Congress identify the sticking points of their constituents.

According to Jay Grimes who is the Owner-Operator Independent Drivers Association Director of Federal Affairs, there are certain aspects of the bill that the President may have proposed as a starting point for negotiation moving forwards. “I don’t think Congress is going to bite on doing a 10-year bill for $810 billion,” Grimes said. “I think the goal is trying to get a five-year new highway bill, which would match the FAST Act length. That’s probably going to be more realistic. The 10-year is a little pie-in-the-sky, I think.”

$810 billion would be a significant increase to infrastructure funding compared to previous legislation, and it’s likely to be a significant talking point when it comes to the final budget that Congress agrees on. The $50 million for Moving America Safely and Efficiently Program is slightly more likely to be brought into the official budget as-is, being a smaller portion of overall spending. There’s no mention as to where funding for the infrastructure changes will come from and whether economic growth alone will easily support the increase in spending levels.

Trucking in 2021 Compared to 2020

There’s been a greater level of national attention to the trucking industry, and that’s set to continue through 2020. Starting in September of 2019, a proportion of truckers became newly eligible for overtime pay, which is especially helpful for owner-operators at the bottom of the pay scale. The President’s pro-infrastructure budget comes at a time when he’s receiving backlash for disallowing the Department of Homeland Security from enrolling or re-enrolling New York residents in Global Entry, which impacts the truckers in the state who carried low-risk shipments across the Canadian and Mexican borders. This issue is still ongoing, and New York intends to sue the DHS over the policy. Trump issued an executive order on February 12 that calls for the protection of GPS services, which presents primarily as a security-based solution, but will again promote spending in the trucking industry. There were GPS disruptions in maritime shipping in the Mediterranean last year, which has prompted concern over such disruptions taking place on domestic soil— something that could cost billions according to a study by the Department of Commerce.

Overall, the budget proposal indicates a greater level of care for truck drivers in America, with more straightforward benefits than the policies that are shaping 2020. With the worries regarding California’s gig economy bill AB 5 finally diminishing in result of a judge’s ruling, and the DoT having overturned trucker-specific work regulations, it seems like truckers might finally get a break when it comes to adjusting to new regulations.

How Does New Infrastructure Affect Truck Drivers?

Semi-Truck driving is a growing industry according to the National Bureau of Labor Statistics, and there are billions of dollars invested in trucking logistics every year, meaning that there’s a lot of money to be made in terms of getting trucks to their destination as efficiently as possible. Infrastructure improvements can result in a reduction of traffic and hazard-based braking, which increases time efficiency and lowers the fuel cost for fixed-distance trips. Much of the Trump administration’s efforts have been devoted to shaping trade in America, with the hopes of increasing interstate trading. This will continually affect the traffic distribution of semi-trailer trucks across America, which means that certain infrastructure bottlenecks may become more noticeable as trade routes continue to be affected.

Truck parking is a relatively inexpensive infrastructure upgrade, and $50 million could go a long way in terms of increasing frequency of truck stops on an owner-operator’s route. This obviously contributes to an increased level of comfort and convenience for truck drivers across America, and freight companies might see the infrastructure changes as a green-light to expand. In general, the freight industry appears to be moving at an upswing, and there aren’t many indicators that the livelihoods of owner-operators won’t increase through 2021.

Stay up to date with the latest infrastructure and trucking developments with our blog! If you’re new to trucking and curious about how to get started as an owner-operator, contact us today.

What You Need to Know About the Drug and Alcohol Clearinghouse

The Drug and Alcohol Clearinghouse has been immensely controversial in recent months. Its goal is to keep the roads safer by holding drivers accountable for their past alcohol and drug-related infractions. Previously, drivers who failed a drug or alcohol test could easily gain employment shortly after with another carrier. This was due to a series of loopholes created by poor recording of these incidents. 

Finally, there is a system in place to prevent this, which will likely improve driver quality and keep our roads safer. Let’s get into the logistics of the Drug and Alcohol Clearinghouse.

What is the Drug and Alcohol Clearinghouse? 

The Drug and Alcohol Clearinghouse is a secure database that provides potential employers with details about the previous drug and alcohol infractions of any candidates. Put into effect January 6 by the Federal Motor Carrier Safety Administration (FMCSA), it will provide records of any commercial driver’s previous violations, so that they can be taken into consideration for a variety of quality standards. This information will not only be available to employers, but it will also be viable for review when it comes to the issuing and renewal of a commercial driver’s license. Law enforcement and substance abuse personnel can also use this information in the event that an infliction requires legal intervention. It also presents information about when a driver is suitable to return to duty. 

Why is This Database Necessary?

Alcohol and drug use are massive safety concerns for both drivers and the general public. There are many recorded incidents of drug and alcohol abuse severely impacting the judgment and performance of drivers and consequentially resulting in tragedy. The DOT authorizes urine tests, but when more detailed tests were conducted, the drug and alcohol issues throughout the trucking community were found to be more severe than we initially thought. While the electronic record-keeping might seem strict upon the first impression, it is an important measure to keep the roads safer. 

Is This Good News for Drivers? 

Privacy is a valuable thing, so it’s understandable that an online logging system might have some skepticism. In reality, this new system will actually benefit drivers in several ways: 

  • Drivers will be able to register and query the database to view their own records for free
  • The Clearinghouse will notify a driver, either by mail or email, any time there is information about him or her added, altered, or deleted
  • Instead of using the driver’s Social Security Number, the Clearinghouse will categorize and store data by birthdate and CDL number

The only drivers who will have any cause for concern with this new database are drivers who are intending on committing drug and alcohol violations in the future. Because the system was only effectively put into place in January, any past inflictions will not be entered into it. The Drug and Alcohol Clearinghouse extends to all commercial vehicle operators, including School Bus Drivers, Limo Drivers, and Construction Equipment Operators. Any employee operating under FMCSA functions must comply with Clearinghouse regulations. 

How Employers Are Being Affected

This new system not only affects drivers, but it also affects carriers and other potential employers. Employers will have to add an extra step to their hiring process and modify the way they maintain safety records. According to the Department of Transportation, 

  • “Employers will conduct pre-employment queries on prospective employees and if drug and alcohol violations are identified, those employees will be prohibited from performing safety-sensitive functions, until successful completion of the return-to-duty (RTD) process;
  • Employers will query the Clearinghouse annually for each driver they currently employ, and if drug and alcohol violations are identified, those employees will be prohibited from performing safety-sensitive functions until successful completion of the RTD process.”

New Technology Continues to Change the Trucking Industry

Previously, drivers with unsafe drug and alcohol histories could easily lie about their records, especially if they crossed state lines to apply for their new position. This database closes up that massive loophole that was posing a safety and efficiency risk for the public and the trucking industry. Overall, drivers have nothing to worry about as long as they’re safe and sober when on-duty. 

To find out more about how technology is changing the trucking industry, check out our blog today!

Retail Delivery in the Age of Amazon

Amazon’s got a new fleet of vehicles, and now it needs drivers to operate them. The company has been expanding rapidly when it comes to their delivery assets. Here’s your guide for understanding what the retail giant has done to meet its massive delivery needs, and how that’s going to affect business for carriers and owner-operators.

Amazon’s Give and Take for the Freight Industry

Amazon has previously been a significant revenue stream for shipping solutions like FedEx and USPS, but the company has chosen to outsource delivery solutions less and less as they’ve grown in size. An order by Amazon for 20,000 sprinter vans has been placed with Michigan-based company Spartan, to help the company meet its own last-mile shipping needs independently of providers like the Postal Service, FedEx, and UPS. This order further indicates Amazon’s desire to solve their shipping needs internally, which specifically gives their last-mile fulfillment alternatives reason to worry.

Amazon is continually expanding, however, which should be good news for semi-truck drivers in general. There’s news of Amazon making an aggressive push to scale themselves into freight brokering, with their new platform freight.amazon.com offering beyond-competitive pricing on shipments along the Eastern seaboard, undercutting other carriers in the area since the platform went online in April of last year. If you’re an independent owner-operator, it might be worth signing on with a carrier that participates in Amazon Freight.

It’s unclear what this means for carriers across the U.S., however, with only some carriers being taken on as approved partners with Amazon. It’s possible that Amazon’s capacity to meet a razor-thin margin could cause trouble for carriers that get denied a deal with Amazon’s new brokerage endeavor.

What this Means for Carriers 

Participation with Amazon has also been cited as a pressure-point for carriers in the past, however. When New England Motor Freight declared bankruptcy in February of 2019, it was suspected that the company allocated too many resources towards its Amazon contracts, which resulted in the company moving an increasing number of Amazon packages at a time where the price per package had been steadily declining compared to standard freight. It’s difficult to speculate whether Amazon Freight partners will experience similar difficulties in the long run.

Finally, Uber Freight seems to have a business model that’s exerting less turbulence on the industry in general. The transportation giant offers a similar service to Amazon Freight, except it’s not just for carriers. It’s available to independent owner-operators as well. The industry is getting increasingly competitive when it comes to who manages to meet shipper’s needs first, but with Amazon Freight putting pressure on carriers to compete with their prices, and Uber Freight offering increased opportunities for independent owner-operators, it’s a more important time than ever for independent drivers to do their homework before signing on with a big carrier company.

What Work is Like for an Amazon Last-Mile Driver         

As Amazon continues to invest more heavily into freight solutions, it’s made a corresponding investment in last-mile solutions. As mentioned, Amazon’s order for sprinter vans has created a new niche for drivers who want to work. There’s a surprisingly low barrier to entry when it comes to Amazon’s jobs for sprinter van operators, as a Commercial Driver’s License (CDL) is not required. While there is a demand for these jobs, they likely won’t compete in terms of payout with the average rates for semi-truck drivers. According to the listings on Amazon’s website, sprinter van drivers make $16.00 per hour usually, and delivery assistants make $15.00 per hour. These are all full-time jobs, with most drivers working 10-hour days for a total of 40 hours per week. Conventional jobs in semi-truck driving pay better on average, with the U.S. median pay being $21.00 per hour according to the U.S. Bureau of Labor Statistics.

Sprinter van services are set to take the pressure off of Amazon’s other unorthodox last-mile solution, Amazon Flex, which hires drivers as independent contractors to deliver Amazon packages in their own personal vehicles. This job also doesn’t require a CDL. Amazon Flex is only available in around 50 U.S. cities, and pay rates vary depending on the day, which means that this service won’t fit every driver’s lifestyle.

Is Now a Good Time to Get a Commercial Driver’s License?

It’s definitely a good time to be a semi-truck driver. There’s a huge demand for semi-truck drivers in America, which means that work can be easy to find for truckers just breaking into the industry. According to the National Bureau of Labor Statistics, the number of semi-truck operators in America is projected to increase all the way through 2028, which is a level of job security that’s hard to beat, especially when compared to the volatility of Amazon’s brand new last-mile driving solutions. The barrier for entry as a semi-truck driver is easily overcome for most Americans looking for work, with competitive financing options being readily available for anyone who can pass a credit check. If you’re ready to get started in the trucking industry, browse our blog for more information, and contact us when you’re ready to step into your new career.

New Environmental Law Impacting California Truckers

California is doubling down on its efforts to get older trucks off the road. The California Air Review Board (CARB) has been a formidable force in truck and bus regulation in the state, setting a strict set of laws that took effect in 2012, which most notably, set restrictions on the age of semi-truck engines fit for transport. In 2017, there were 80,000 heavy-duty trucks registered in California that were out of compliance with diesel regulation laws. In 2020, that number is estimated to have been reduced to 50,000, but CARB is continuing to close in on the trucks that are still out of compliance.

New Legislation

A new law has been put in place to suspend DMV registration of trucks that don’t meet CARB’s guidelines for emissions, which include minimum standards for particulate matter filters. Cost is a major reason that drivers avoid meeting the standards, which will eventually mandate that every truck entering the state has a 2010 model year engine or equivalent. Many semi-truck drivers had chosen to gamble with operating non-compliant vehicles, in the hopes of skirting the Air Resources Board enforcement arm altogether. This law should rope in the last batch of recalcitrant operators, as driving a truck without registration is hardly feasible.

What This Means for Drivers

Should the law work as intended, it would result in a significant number of owner-operators being forced to spend the money it takes to make their rig compliant, or leave trucking altogether, contributing to the national driver shortage. That being said, there are plenty of resources for finding the capital needed to bring a semi-truck up to standard. CARB offers grants for truck drivers, as well as links to financial incentives on their website.

It should be emphasized that CARB’s environmental guidelines apply to all semi-trucks entering in the state, with temporary passes for out-of-date trailers now being fully discontinued. As a result, it may be a good time to consider trading up to a new, cost-saving model now, when restrictions are just being put into effect and not likely to increase for a significant amount of time.

What This Means for Dealerships

It’s likely that the increasingly strict guidelines for efficiency are contributing to the decline in used truck sales, which are down as much as fourteen percent. New trucks and trailer-service industries could see a boom in the coming year however, with every new batch of trucks that falls out of compliance with guidelines every year. It’s possible that used trucks may not all be defunct as well. With the demand for used semi-trucks in decline, there’s potential for the cost-efficiency of retrofitting these vehicles to be on the rise. Dealers with access to a well-trained shop team familiar with CARB guidelines might consider purchasing used trucks on the cheap, with the intent of bringing them up to date and selling them to value-focused drivers.

Some Good News for Owner-Operators

Pressure has been relaxing in some areas, however. Trailer regulations set to take effect on January 1 of this year have been postponed for at least two years, giving manufacturers time to bring their products up to the new standards, which has the potential to positively impact trailer prices in the future. The changes largely mirror new federal greenhouse gas trailer regulations, which generally concern reducing weight and drag from trailer models. The U.S. Environmental Protection Agency is currently precluded from enforcing the federal standards however, as a case against the changes has reached the court of appeals in Washington D.C. This should give owner-operators some breathing room when it comes to upgrading their equipment.

A special exception for California in the Clean Air Act of 1963 makes it the only state with the authority to set its own regulations. They would be set to enforce GHG trailer standards, but for trailer manufacturers inability to meet CARB’s stringent guidelines in time for enforcement. The suspension is set to be lifted on January 1, 2022, and CARB will continue their work to vet and approve manufacturers in the meantime.

What to Expect Moving Forward

CARB has been clear about its intentions moving forward. GHG regulations for trailers won’t be moved up in timeframe, and manufacturers will get six months’ notice before trailer standards are enforced. California has only tightened its regulations on diesel emissions in recent years, however, and it’s unclear as to whether the current appeal to the EPA that’s paused federal trailer regulation will affect California’s special case for self-regulation. In general, it’s best for drivers to expect enforcement of environmental emission regulations and do the best they can to outfit their vehicle properly if they plan on operating in California. Dealers should look to stay ahead of the curve when it comes to the demand for new semi-trucks and adjust to the declining demand for used semi-trucks accordingly.

Whether you’re a driver that needs help with financing, or a dealer looking to expand your business, look towards Mission Financial to help you find the capital you need. Visit our blog to stay up to date with trucking regulations as they continue to develop.

Used Semi-Truck Sales Down in 2020

How Dealerships Can Boost Their Semi-Truck Sales

If you’re involved with a semi-truck dealership, it might be no surprise to hear that used truck sales are significantly down from trends we’ve seen in previous years. In fact, the ACT reported that as of December, used semi-truck sales are down about 14 percent from last year. This has led to many reports of inflated inventory in many different dealerships across the United States, resulting in artificially low prices for many sellers out there. 

While this may sound like good news for those aiming to purchase a used truck, it sparks concern for dealerships. This buyers market can be a large hurdle for dealerships to overcome, but one of the main keys to success in this business is tackling industry fluctuations with grace. Here are some potential ideas that you can use to diversify your truck sales and decrease the overstock of used trucks on your lot.

Why Aren’t Used Trucks Selling as Well Lately? 

Before we can figure out how to solve the issue, it is important to consider where the dip in sales could be originating from. While the exact reasoning will vary dramatically by specific areas and dealerships, here are some possible reasons you’re not selling as many used semis. 

The National Driver Shortage

One of the biggest factors that is likely playing into used truck sales figures is decreased overall sales. There is currently a severe nationwide driver shortage throughout the entire trucking industry. Drivers are retiring at a rate that cannot be replenished by the current number of new drivers making their way into this profession. 

Overall, not as many drivers are entering the industry as would be ideal, and this translates to a lower customer pool for dealerships. Because the customer pool is smaller, this issue also creates an increased competitiveness between different dealerships for limited customers. This type of competition is known to drive prices down and minimize profit. 

New Trucks Are Getting More Popular

Many dealerships have reported that they tend to sell newer trucks rather than used ones. New trucks are becoming increasingly popular, especially with younger drivers. With so many advancements in trucking technology, as well as the rise of autonomous trucking on the horizon, it’s often too tempting to resist the call of a shiny new ride that has improved features. 

The demand for new trucks has risen even more severely with the ELD Mandate in full effect. New trucks are often already equipped, or at least more easily altered to meet the demands of the new logging devices. This added convenience and saved upgrade cost is often a big selling point for the consumer. Since this mandate is fairly recent, it will likely be affecting sale distribution for the remainder of 2020. Don’t be surprised if the customers on your lot are looker for a fresher model than the stockpile of used semis that you have piling up. 

What Can We Do About This? 

While we can pinpoint a few potential causes of the decrease in used semi sales, fixing the issue is easier said than done. While there will be no magic fix for your used truck sales numbers, there are definitely a few things that you can do to try to encourage a more diverse buying pattern from your customers. 

Increase Efforts for Used Truck Sales 

Increasing the energy and expenses towards lowering your used truck inventory could definitely aid in dwindling the overstock. If you have an allotted budget that is dedicated to advertising and promotional materials, perhaps those funds can be redistributed more effectively. Try gearing your promotional materials towards this effort. Advertise the excellent selection of used trucks that you have. Promote the bonuses of buying a used truck over a new truck. Customers are also always very cost-motivated, so hyping up the affordability of your used trucks will be key. 

Offering Incentives for Used Truck Buyers

If you and your dealership are in a good position to offer certain buying incentives for those looking to buy a used semi, it’s smart to do so in this current climate. Financial incentives will likely be the most effective, so if you can offer special pricing or discounts, that could definitely help you move product. Additionally, you can offer certain non-monetary incentives, such as offering a free or discounted service or add-on item. These sorts of things can motivate buyers who might have otherwise not have been interested in purchasing a used semi. 

Diversifying Your Business 

Overall, selling used trucks during a time such as this will be important, even if you’re selling enough new trucks to meet your goal numbers. Having a wide variety of sales is good for business in the long term. If you have this type of variety, you are less likely to be hit as hard when the market sways with trends and patterns. 

Here at Mission Financial, we understand the intricacies of this industry. If you need help with any sort of dealership lending, small fleet loans, simple interest inquiries, or add-on coverage, we are here to help. 

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