The coronavirus pandemic has already had large, quantifiable impacts on the American economy and transportation industry. Sales of personal automobiles dipped strongly in April and have been slowly bouncing back through May. Heavy-duty truck manufacturing has been on the decline as well. To state the obvious, few people are flying, and there’s still a significantly reduced number who are now renting cars or commuting to work. This has significantly changed cash flow in America. Here’s our take on how the economy is functioning currently, and how we expect things to change in the near future.
Expect to See More Trucks and Vans on the Road
Gas and oil are at a historic low, which makes it more likely that we’ll see a shift in which vehicles yield the best ROI for different industries. With cost of operation becoming less of a factor, it will likely become more feasible for companies large and small to rely on conventional gas vehicles, rather than saddling the cost of new hybrid technologies. The possibility of increased infrastructure spending in America could also mean more trucks and vans on the road to build that infrastructure.
There May be Fewer Vehicle Manufacturers
According to an article by trucks.com, there’s already been existing pressure for the auto and truck manufacturing industry to downsize. Mergers like the one between Fiat Chrysler and Peugeot, and the possible merger between Nissan and Renault could result in less total manufacturers left independent, and less true competition as a result.
The article speculates that a combination of the current economic shock with general changes to consumer behavior and government policies could further encourage consolidation between manufacturers.
Class 8 Sales Might Continue to Dip
April’s Class 8 sales in 2020 were half of what they were last year, but that was at a time when uncertainty was particularly high in America as to what the impact of the pandemic would be on the economy, and many American buyers and business owners were unsure of when they’d see financial support from the government and how much that would be. ACT Research has long forecasted tough times ahead for class 8 sales however, and this will have a strong impact on dealerships. As we’re currently expecting a prolonged period of lower truck sales, it’s expected that some smaller dealerships will lack the capital to adapt their model quickly enough to remain possible.
Logistics Fleets Will Be Everywhere
For almost two months now, much of America has been depending on online retailers to meet their needs, rather than their brick-and-mortar counterparts that haven’t been allowed to operate. Digital logistics operations and e-commerce giants such as Amazon and Instacart have had waves of traffic driven in their direction, and this massive shift that could potentially stick to some degree, creating a need for even more local and last-mile transport providers.
New Programs for New Cars?
In 2006, the cash for clunkers program was hugely successful in keeping the transportation industry healthy in the midst of a general recession. Many are calling for a similar program to be launched in 2020, and some analysts are expecting governments and manufacturers to follow through with something similar.
If such a program were instated, the program could encourage auto plant growth, offer safer and more efficient vehicles to the lower end of the income scale, and take plenty of the country’s worst polluters off the road.
Supply Chains Will Work Differently
Already we’ve seen a huge shift in how global supply chains function in relation to the American people, before COVID-19 was even a factor. The trade war with China has been stop and go for years now, and recently there’s been rhetoric from the White House indicating that Chinese-American trade might continue to dwindle. This affects the traffic coming in and out of major American port cities and cargo hubs. To make a long story short, there’s going to be more or less work depending on which state you’re based in as a trucker, depending on how things settle.
What All This Means for Trucking
Trucking has continued to be supported by the Federal Government since the beginning of the COVID-19 outbreak. There has already been news of large companies like Walmart hiring truckers at phenomenal rates. Insofar as most freight companies have seen a maintenance in demand for their services, or even an increase in some areas, it’s expected that the price per mile for truckers will remain high, even after the pandemic ends and businesses reopen. The Wall Street Journal reports that PPM for hiring a big rig is up 12% since March 1st, meaning that you won’t have to change jobs to make a little more money in trucking.
In general, these shifts indicate a change in how and where truckers will make a profit, not that profit is set to decrease for truckers on the whole. While there may be rough times for dealerships ahead, there isn’t necessarily much indication that they’ll do much better or worse than other industries will.
The trucking industry has been doing well in the short term, despite some challenges. Support from the federal government has kept land freight stable, and truckers logging hours. Now is a great time to enter the trucking industry, so make sure you get help from a financial lender to get started.
New CDC Resources for Long-Haul Truckers
The Centers for Disease Control has extended a helping hand to workers all around the world who need to prevent becoming infected or spreading infection of the coronavirus, also known as COVID-19. Earlier this week, the CDC released an article titled “What Long-Haul Truck Drivers Need to Know about COVID-19,” which lays out all of the best practices for truckers that are still at work during the pandemic.
Truck Drivers and the Risk of Infection
The CDC notes that many truckers might not believe themselves at particularly high risk of infection, but according to them, that might not always be the case. “As a long-haul truck driver, you spend many hours alone in the cab of your truck,” the article says. “However, there are times when you will be at increased risk of exposure to COVID-19. For long-haul truck drivers, potential sources of exposure include coming in close contact with truck stop attendants, store workers, dock workers, other truck drivers, or others with COVID-19, and touching your nose, mouth or eyes after contacting surfaces touched or handled by a person with COVID-19.”
70 percent of America’s freight travels by semi-truck, which means that it takes a lot of truckers on the job to keep things moving. President Trump acknowledged the 3.5 million truck drivers in America that have stayed on the job during this difficult time. “In the war against the virus, America’s truckers are really the foot soldiers that are carrying us to victory,” President Trump said during an event honoring truckers at the White House last month. “Truckers are playing a critical role in vanquishing the virus, and they will be just as important as we work to get our economic engine roaring.”
There’s a strong psychological element present in practicing good health habits in regards to the virus as well, which is why the CDC article is such a valuable resource in remembering how and why everyone has to make sacrifices to keep others safe. In an article with the Los Angeles Times, one driver said, “We would like to just go in and sit down and take a break, have a meal. For a lot of drivers, it’s a way to unwind,” that the current state of trucking has “a lot of drivers wound up.” With so many restaurants offering carry-out only, and truckers working extra long hours to keep the country supplied, it can be difficult to maintain a healthy work-life balance on the road right now, making extra support from government agencies especially valuable.
Key Takeaways From the CDC for Drivers
The CDC has indicated when truck drivers need to be the most careful when they’re on the road. Among their recommendations for truck drivers are that you notify your employer and stay home if you’re experiencing COVID-19 symptoms, making a plan with your employer and family as to what could happen if you get sick on the road, and how to limit time spent outside the cab in general.
One important resource according to the article, is to use paperless methods for billing and invoicing for fueling, deliveries, and anywhere else possible, to reduce the likelihood that the virus could spread as a result of close contact with other people.
How Employers Can Help Truckers, According to the CDC
A survey and analysis conducted by the driver feedback platform WorkHound found that 27% of drivers wanted to be assured that their companies were taking “extra precautions to ensure that their equipment is safe and sanitized,” and according to the CDC, that’s just the start of how employers should be supporting the workers on the front lines currently. The CDC article mentions that some drivers might be at higher risk for serious illness than others, such as older adults and those with chronic medical conditions. Treating these workers with extra care to ensure that they minimize face-to-face contact can go a long way to prevent these especially susceptible drivers from becoming infected. It’s also critical for employers to help train drivers on proper handwashing practices and other preventative measures that help prevent the spread of many diseases, including COVID-19.
“Consider drafting non-punitive emergency sick leave policies if sick leave is not offered to some or all employees,” the guidelines say. “Employers should not require a positive COVID-19 test result or a healthcare provider’s note for employees who are sick to validate their illness, qualify for sick leave, or to return to work.”
For those who are currently still at work, it’s especially important to stay up to date on the best practices for minimizing the chance of exposure to COVID-19. If you need help staying on the road, contact us at Mission Financial. With us, you can have more control over your work environment.
Why Truckers Needs Digital Tools Now More Than Ever
Whether you’re a semi-truck owner/operator currently helping to move supplies in America or a logistics expert managing a fleet of trucks, it’s important to be aware of the technology that’s available to help freight workers manage shipments all across the country. The American supply chain has continually undergone changes in the wake of the Coronavirus pandemic, and it’s become increasingly important for truckers to rely on digital tools to get their jobs done.
The Latest Uber Freight Update
First-come-first-serve freelance trucking software has been on the rise for months now. The most notable of which, Uber Freight, has been positively impacting independent owner/operators’ ability to find shipments that chain efficiently together. It’s not always the case that a trucker’s destination will have a profitable pickup destination nearby, and the use of digital freelancing tools has been a huge factor in making sure that independent owner/operators can maintain profits while supply chains have been so severely disrupted across the country. Uber Freight in particular has updated their software infrastructure to allow for truckers to get better access to the jobs that are available.
As of last April, Uber Freight has begun to use a bidding system on its load app, that gives drivers more options. “It’s vital that carriers and drivers have access to loads with transparent pricing so they can make fast, informed decisions about their business,” the company said in the blog post that announced the upgrade. “That has never been more apparent than it is today, with the freight market in flux and drivers and carriers in our network working around the clock to keep shelves stocked and the country moving forward.”
Uber Freight said that truckers and motor carriers can now submit bids and receive feedback on select loads directly in the app, and then get notified later if they won or lost the bid. If the bid is won, the load will be temporarily reserved at the winning price. In addition, all the loads Uber offers will still have an instant “book now” price for those who find it’s still in their best interest to lock in a load. “As a complement to our dynamic pricing engine, and by automating and streamlining the traditional bidding process, Uber Freight’s in-app bidding aims to improve functionality for the entire freight marketplace,” the company said. For truckers on the app, and suppliers everywhere, this should be a significant step in leveling out supply versus demand supply chains.
Other Mobile Apps Impacting Owner Operators
There are plenty of smartphone apps available to the general public that can make a big impact on the ability to avoid infection and keep up to date with the COVID-19 pandemic. Some of the best include the CDC Mobile App, which can help anyone stay informed on best practices to avoid infection, and how our understanding of the virus continues to improve over time. There have been plenty of trucker-friendly apps available for years however, and now is a better time than ever to make sure you’re using all of the best tools available that can help you while you drive your truck during the pandemic.
One of our favorites is Overdrive, which includes the weather forecast and can help you locate rest stops. It also gives you access to Overdrive online magazine, an integrated message board and an integrated load tracker. Our second favorite tool is the Weigh My Truck App, which keeps you from having to walk into weigh stations to pay down your truck load. The Weigh My Truck App was built to work with CAT Scales and allows you to weigh your truck and pay your weight with your smartphone at the scale, without needing to leave your truck. In times like these, avoiding delays and hazards can be crucial for ensuring that you get to your next load on time, and it makes sense to see what tools the app stores have to offer you.
The last bit of trucking tech worth talking about is platooning. Improved driving systems can now allow for trucking rigs to arrange into formations. These formations are controlled by complex computing systems that communicate with one another, allowing trucks to follow closely behind other trucks in their fleet. The end result makes for a long line of heavy vehicles heading in the same direction, one after the next.
This method can be a powerful cost-saver in terms of fuel consumption and emissions. The line of trucks that’s created works to combat wind resistance and traffic congestion. The resultant file of large vehicles creates stability in traffic, allowing for other vehicles to navigate around them smoothly. Platoon technology can result in fuel savings of 4.5% for the lead truck, and 10% for the following truck. It might be time to investigate whether platooning could improve your ROI.
Make sure to follow our blog for more updates on the freight industry, and contact us if you’re looking for a financial lender you can trust.
Why America is Thanking Truckers During the Coronavirus
Truck drivers have been working around the clock to help support the shifting demand for food, medical supplies, and other essential items during the Coronavirus pandemic. The government instruction to stay at home whenever possible, has had a sizable impact on the American economy. One result of so many people staying home, and non-essential businesses being closed, is that demand for certain items like retail products have been in steady decline. This has created an issue of one-way supply-chain flow, meaning that freight companies can easily load and fill 18 wheelers all the way up at manufacturing hubs across America, but don’t have anything to pick up once they arrive at smaller towns and cities. This causes trucks to be half-empty, or totally empty on their return trips, creating huge efficiency losses for shippers and freight companies. This has truckers working longer, harder hours— something that Americans desperately need, are respectful of, and thankful for.
People Everywhere Take Note of Trucker’s Contributions
American citizens have been reaching out all over the country to express their gratitude and support for everything that truck drivers have done to aid the country in this difficult time. Many social media users are using the hashtag “thankatrucker” to reach the drivers on the road with positive words, or offers to repay the truckers for their hard work. While most drivers have experienced increased difficulty on the road as a result of many restaurants and rest stops being closed, there are many establishments that are doing their part to make sure truckers can continue to work in relative comfort. Those that have taken steps to ethically resume operation with COVID-19 in mind are using social media to tell truckers that they’re open for business, and in some cases, hoping to repay truck drivers for all of their hard work with free food and shelter.
The Iowa Motor Truck Association provided 1,000 complimentary boxed lunches for truck drivers last week, at two different weigh stations on I-80. The distribution was set up as a “drive through/drive by” scenario to comply with CDC guidelines, enabling the Truck Association to do some good for truckers at work without risking worsening the pandemic. Texas residents offered free takeaway bar-b-que to truckers in their area, serving dozens until their supplies ran out. On Interstate 40 in Jackson, Tennessee, local residents handed out box lunches with sandwiches to truckers on the road.
What Truckers Do to Keep America Going
Most people have seen first-hand the impact that the pandemic has had on the supplies at their local grocery. Stockpiling behavior has resulted in an absence of non-perishable food, sanitation items, and toilet paper on many supermarket shelves— leaving some people who didn’t make it to the store in time low on essential supplies. This has greatly changed how the American supply chain functions, as there’s suddenly a huge increase in demand for emergency medical supplies like masks, ventilators, and soap. These items need to be transported from manufacturers to medical treatment centers, while the raw materials required (paper, plastic, and alcohol, for example) need to reach the factory in time for production to resume on track.
The Truck Driver Experience During COVID-19
This has resulted in huge changes to the trucker way of life. The Department of Transportation has taken a great number of steps to ensure that truckers get to stay on the road, which include allowing drivers delivering essential supplies to stay on the road for longer periods of time. This is great for Americans, but dangerous for truck drivers overall, unfortunately. Many truck drivers don’t feel as if they have a choice in the matter and are very concerned about contracting COVID-19.
In an email, one truck driver stated that the pandemic “has been pretty difficult for [him] as a truck driver because truck stops aren’t stocked with cleaning supplies. Because he comes into contact with people all over the western United States, his anxiety level has been growing since he’s down to his last half-bottle of hand sanitizer.” According to a study by the American Center for Disease Control, 38% of truckers don’t have health insurance, meaning that it’s likely they’ll receive inferior care compared to those who have insurance and potentially suffer significant financial hardship if the contract the virus.
How You Can Help America
The country is still facing a national shortage of truck drivers, making it a perfect time to do your part and become an owner/operator. If you’ve lost your job due to the Coronavirus, it might be worth considering helping America stay afloat by joining the freight industry. Unemployment is at an all time high for recent decades, making it especially important for the labor force to shift towards industries that are thriving in the epidemic.
If you’re interested in getting started as an owner/operator, contact us to get on the road to financial independence. If you’re interested in helping other truck drivers, don’t forget national truck driver appreciation week, and make sure to reach out to the truck drivers in your community— many are in need of food, shelter, or just good conversation. From all of us at Mission Financial, thank you to all the truck drivers at work in Americ
According to a press release by shopping giant Walmart, the company is expanding their truck driver positions by 500 this year, mainly on the West and East Coast. This is great news for truck drivers in general, but it’s still unclear as to whether increased hiring is a trend we’ll see across the country. The presence of the Coronavirus in the United States has caused a great deal of turbulence in the freight industry over the course of last month, resulting in an increased demand for drivers in some areas, alongside increased complications for the drivers that are managing to stay on the road.
A Surge in Online Shopping
As some economists have predicted, the government instruction for American citizens to stay home whenever possible, and with many states calling for the shutdown of non-essential businesses, Americans have been turning to the internet for their shopping needs. Walmart’s decision to hire more drivers is a direct result of an increase in online orders, according to the retailer, a trend that’s grown persistently in recent years.
The company began dialing up their driver program last year, hiring 1,400 drivers to meet a 3% increase in same-store sales. All of this is good news for truckers, especially because Walmart has taken steps to ensure that their jobs are competitive with other trucking jobs on the market. According to Walmart, their average driver salary is all the way up to $87,500 per year, a result of their all-in rate per mile being close to $0.89. This is a far-and-away a much better deal than the national average salary for truck drivers, which is $43,680 per year. Only 10% of truck drivers earn more than $64,000 per year, making Walmart’s reported salary a bold play for attracting truck drivers. This will surely result in Walmart’s new positions being filled, but it’s difficult to predict whether it will ever make a dent in the national driver shortage America has been facing.
What It’s Like to Drive for Walmart
You can read testimonials from Walmart drivers on their website. One of which describes Robert Sullivan, who’s been driving a truck for twenty years, and working for Walmart for the last two. He describes a breadth of small perks that, for him, really add to his enjoyment of driving for the company. Predictable home time and no-touch freight are some of the best perks of the position, alongside small bonuses like company-paid dry-cleaning services and paid rest breaks, which can make a big difference when it comes to enjoyment on the job. Walmart has recently revamped their onboarding process, making it even more efficient for new drivers to join their fleet.
America Needs More Drivers
There have been reports of large employee demographics being at risk of infection for Coronavirus, which has had a large impact on America’s economic structure. The unemployment rate in America is at a record-breaking 6.5 million at its most recent estimate— nearly double what it was only 25 days ago. There are reports that nearly 2,000 USPS workers have been quarantined over Coronavirus concerns, and it’s impossible to fully understand the scope of the effects Coronavirus has had on any industry.
The world has recognized the importance of truck drivers in keeping local businesses supplied throughout this difficult time, and there has been a lot of good news regarding the country’s efforts to keep more truck drivers on the road. 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 for working more than 11 hours per any 14-hour work period. Businesses have been offering free parking and free meals to truckers along the I-80 corridor, and there are reports of truck drivers being cheered upon arriving with their cargo. Before March, the American Trucking Association had issued multiple statements about the incredibly high demand for truck drivers in America, some claiming that there are 48,000 vacant truck driver positions in the country. It’s possible that Walmart’s publicized wage increases may be an indirect result of their inability to staff their trucks by more conventional means.
How You Can Get Started as a Truck Driver
If you’re considering becoming an owner/operator of a semi-truck, now is a great time to do your part and help supply a vital service for the American people. Truck drivers require a Commercial Driver’s License, which is attainable through your local DMV. Check your local Office of Motor Vehicles for their program details. Truck driving becomes increasingly lucrative every single year, but it often takes a significant amount of initial investment to get started. If you need semi-truck financing, contact us, and we’ll help you out, even if you’ve got bad credit or limited driving experience.
On March 27, 2020 President Trump signed the Coronavirus Aid, Relief, and Economic Security Act. The CARES Act, as it’s commonly known, is a $2 trillion bill that offers financial support to unemployed persons, small businesses, and large businesses in particular. But how is this bill going to affect the trucking and transportation industry?
How CARES Affects Owner Operators
For those who would be able to work, but are no longer able due to the coronavirus outbreak, Unemployment Insurance Provisions include an additional $600 per week payment to each recipient for up to four months, and extend benefits to self-employed workers, independent contractors, and those with limited work history. “That means, in trucking terms, any leased or independent owner-operators who loses work can draw the new federal unemployment benefits through the end of July.”
While the wording of the law is designed to be generous, it will depend on whether the government believes that many truck drivers are rendered unable to work while the coronavirus is continuing to spread. In general, truckers are working longer hours than ever, and there’s an increasingly high demand for truckers that are available to move freight. The majority of Americans will receive the $1,200 Economic Impact Payment, regardless of their current employment status.
Another bill helping owner operators, the Families First Coronavirus Response Act (passed prior to the CARES Act) – requires trucking companies to provide two weeks of paid sick leave to employees who contract COVID-19. “They don’t have to test positive for the virus. Rather, if they experience symptoms and are seeking a medical diagnosis, employers are required by the law to provide two weeks of paid sick leave, up to $511 a day, or $5,110 for a two-week period.”
What is the Economic Impact Payment?
According to the CARES Act and well-described by an e-book by ATBS, The Economic Impact Payment is designed as a 2020 refundable tax credit claimed on a taxpayer’s 2020 tax filings. The checks going out are effectively an advanced payment of a tax credit for 2020.The tax credit will be reconciled to the payment received when filing your 2020 tax return. If you file your tax return as a single citizen, your credit will be $1,200. If you are Married Filing Jointly, your credit will be $2,400. Additionally, each Qualifying Dependent Under Age 17 that is on your tax return will net an additional credit of $500. In order to receive the payment, you must be an American citizen or resident alien, you must have a Social Security Number (includes children), and you cannot be eligible to be claimed as a dependent.
For many taxpayers, this credit will make a significant impact on their immediate earnings and help them through the extra expenses that may arise from surviving the pandemic. As mentioned above, Unemployment Insurance has been bolstered, which means that truckers who lost their jobs due to the outbreak will be better able to live their lives with income closer to that of their previous wage before their job was lost.
How the Bill Affects Businesses
The CARES Act brings great news for small and large businesses, offering between $350 – $500 billion to help keep businesses of different sizes afloat. America is currently at over 10% unemployment, so these new provisions have come in just in time, making it easier for businesses of different sizes to continue paying their employees while their storefronts may be closed. For companies with under 500 employees, the federal government is offering tax credits and $350 billion for small businesses to apply for loans that can be partially or fully forgiven. For businesses that employ more than 500 people, a separate $500 billion is available.
How Fleets Should Operate Around the Loans
There are two types of loans available. The first is called the Paycheck Protection program, and it’s a loan available to smaller businesses, that delivers 2.5 times the amount of a business’ monthly payroll. These loans can be fully forgiven, if spent correctly— on payroll, rent, utilities, and Mortgage Interest. This is a great loan option for independent owner-operators, who in effect need to pay their own salaries. Best practice for sole proprietor owner-operators would be to use the loan to pay their own payroll and keep strict documentation so that the loan can be fully forgiven in the future.
The second type of loan is called an Economic Injury Disaster Loan, which offers loans of up to $2 million with a fixed low interest rate of 3.75%, coupled with a longer repayment period of up to 10 years. This loan requires collateral if the requested amount exceeds $25,000. If you’re looking to borrow a small amount of money for your business, Paycheck Protection Program Loans are superior in every way, as they always have the potential to be entirely forgiven, whereas Economic Injury Disaster Loans can only be forgiven for up to the first $10,000 borrowed, for the rest of the amount to be repaid over the loan period.
What Does This Mean For Trucking?
All of this is good news. Many freight companies have been able to continue operation throughout the pandemic, which means that financial losses will likely not exceed their cost of operation. With loans being available for all businesses at competitive interest rates, we shouldn’t see many freight companies going under any time soon. There are plenty of resources available for how to secure a loan for your business. If these new government opportunities aren’t enough, or you don’t apply, you can always look to a private financial service company like Mission Financial to help your business see it through these difficult times.
With the additional income from the Economic Impact Payment, truckers should be able to stay on the road long enough to deliver the vital food and supplies that the country is relying on. With one of the stipulations to loan forgiveness being that businesses need to keep their payroll at maximum capacity, semi-truck drivers working for freight companies as standard W-2 employees shouldn’t be worried about getting laid off any time soon.
Stay informed on the state of trucking in America by browsing our news page, updated frequently so you don’t miss any important updates!