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Supreme Court Hears Important Trucking Case

                                                                                                                                                                                                         

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.

Hurricane Season: What Does it Mean for the Freight Industry?

 

 

This year, hurricane season rocked the coast as we’ve grown to expect. This September, Hurricane Florence swept the Carolinas at a category 4, leaving destruction in its wake. When natural disasters arise, our focus shifts to families in need. When survivors need supplies, semi trucks are pulled from regular circulation to deliver aid to those in need. Many truck drivers and members of the commercial vehicle workforce may be wondering what this means—and how hurricane season influences the freight industry.

FEMA and Freight Load Demand

Mandatory evacuation is closely linked to the commercial transportation industry during a hurricane. In order to support the traffic flow associated with mandatory evacuation, some major highways usually need to be reversed. Simultaneously, September begins a busy season for the commercial transportation industry in preparation for higher consumer spending during the holidays. During emergencies, FEMA pulls trucking capacity from all over the country for help delivering supplies. Tight seasonal capacity compounded by the demand for capacity in an emergency has the power to affect the flow of goods nationwide. FEMA can even pay truckers competitive rates to incentivize help to affected areas quickly.

Considering that truck drivers today are already in great demand, it’s easy to see that a large storm carries implications for the efficacy of the freight industry. According to Dial-A-Truck, or DAT, the freight market is affected in three key stages during a natural disaster: before, during and after.

Before the storm hits, FEMA might increase demand for loads to be transported out of the storm’s path of destruction. During the storm volume will drastically decrease due to unsafe road conditions and closed roads. After the hurricane, FEMA will call for emergency freight, often posted on the DAT Load Boards.

The aftermath of a hurricane prevents trucks from safely returning to the road. Practically speaking, flooded roads, downed trees, and damaged infrastructure slow drivers ability to meet the demands waiting for them. For example, in 2017 following Hurricane Harvey, the number of freight loads nationally dropped 10%. Because Houston is a major city and transportation/freight hub, the potential effects on the industry were amplified. Freight loads out of Houston immediately following the storm fell 72%.

What This Means Today

Hurricane Florence affected the Carolinas including Charleston this September with winds strong enough to cause widespread power outages and uprooted trees. Large sections of I-95 and US Route 70 were flooded for days following the storm, and the North Carolina Department of Transportation instructed all drivers to avoid driving in the state completely. Recommended detours included routes through Tennessee and Virginia. While parts of major highways were cleared for use just ten days later, hundreds of other roads in North Carolina stayed down.

After a hurricane, floods can also damage warehouses and fulfillment centers, preventing drivers from returning to work. Days can translate into weeks when goods start to back up and overflow other centers. For some time after the storm, many shipments in and out of the area could be allocated to rebuilding damage. So how does the backup influence market prices?

Price Increases

Price increases are normal after a natural disaster. This has to do with the relationship between supply and demand. After an initial dip, demand increases following hurricane season, but supply can still be stifled. For example, according to the DAT Trendlines, load to truck ratios increased for van, reefer and flatbed equipment types in the week following Hurricane Florence. National average rates slipped in the week following the hurricane as well. Spot market loads have increased 2.9%  and spot market capacity has increased 1.4%. Following Hurricane Katrina, for example, spot rates rose 7 percentage points for a solid five month stretch.

After a hurricane, it’s also common for gas and food prices to increase. Following hurricane Florence in September, fuel prices are up .3%. This is mild compared to the influence of Hurricane Harvey, which made landfall in Texas last year. Because Texas is a major U.S. petroleum production site, the impact was significant. 14 refineries shut down as a result of hurricane damage. Gas prices nationally after Hurricane Harvey rose a whopping 15% according to CNN. Luckily, Hurricane Florence has made less impact on gas prices. This translates to good news for the trucking industry.

Positive Outlook

Ultimately, the commercial transportation industry is resilient. Following a hurricane or natural disaster, supplying relief and supplies to those in need takes priority.Our hearts go out to everyone affected by Hurricane Florence this September. To keep you on the road, remember that a semi truck repair loan could help you cover the cost of damages caused to your truck in the event of an emergency. To learn more about your options, visit https://www.missionfinancialservices.net today.

What Are Your Options To Cover the Cost of Semi Truck Repair?

If you’re a veteran of the open road, you probably know as an owner-operator just how expensive it is to maintain a semi truck. But how exactly does that cost break down? It’s no secret that truck driving can be a lucrative career. But how do the costs of repair maintenance compare to average income, and what are your options to cover repairs if you don’t have the cash up front?

Today, a successful commercial truck driver according to CNN can make a median annual wage of $73,000 working for a privately owned fleet (such as Wal Mart). According to the Labor Department, the median salary for all truck drivers is around $40,000 a year. However, trucker wages have been steadily increasing alongside a national shortage of commercial vehicle drivers. The demand for more drivers has influenced private fleet owners in particular to offer more enticing benefits and gains. Truck driving is also a sustainable career, with the median age for drivers landing at 49 years old, slightly higher than the median age for all American workers (42).

With all the financial opportunities and benefits that lie in the commercial transportation  industry, the costs of operation can still add up. Operating a commercial vehicle is expensive, and can cost up to $180,000 on a yearly basis by some estimates. Diesel fuel alone is one of the largest expenses, with semi trucks requiring up to 20,500 gallons a year in standard use. This equates to $70,000 of diesel fuel per year! This is 39% of total operating cost, or $0.54 per mile. If you operate a small fleet as a business owner, you’re especially attuned to these costs.  

Most importantly, year truck maintenance and repairs are estimated to cost around $15,000 annually. Common issues include air/line hoses, alternators, wiring, and brake repairs. Additionally, annual tire expenses can run around $4,000 a year to replace 16 out of 18 tires on an 18 wheeler. So what happens when you run into trouble and need cash to finance inevitable semi truck repairs or maintenance? Commercial vehicle lenders provide a range of financing options.

1. Commercial Vehicle Title Loans

Commercial vehicle title loans can function as a means toward cash for repairs. You can utilize commercial lending for title loans when you own your semi truck and want to use that capital for a loan to cover the expense of repairs. When you take out a title loan, the lender holds your title as collateral for your loan. You make payments to buy your title back and regain ownership. The terms of your loan may depend on the value of your truck as well as your overall credit. You may also be able to approximately determine the your monthly payments and down payment using a loan calculator, or even a commercial loan calculator. While these tools are not definitive, they could help put your finances in perspective. As you consider your options, note that many commercial vehicle financing companies offer commercial truck title loans as well.

2. Refinancing

If you already have a commercial vehicle loan but need fast cash for repairs, you may consider refinancing your loan. If you’re refinancing, you’re already familiar with commercial truck financing, but you may not realize that refinancing could help reduce your monthly payments and save you money. You can use the money you save monthly towards the repairs your semi truck needs. Refinancing can help you direct money toward the demands of your business including tires, regular maintenance and repairs.

3. Personal Loans

It might be tempting to pursue a personal loan when your truck needs repairs and you’re short on funds. However, commercial vehicle loans for bad credit are readily available. Commercial vehicle loan rates can be slightly higher, but are usually more flexible on issues like bad credit or child support issues. Factors like established credit, collateral, a history of payments on a semi truck or home, and a clean record of bankruptcy or repossession will improve your rates on a semi truck repair loan. If you decide to pursue a personal loan, know that a credit check will be a part of that process. Personal collateral as well as business collateral can be useful when you’re trying to obtain any type of loan.

4. Commercial Vehicle Repair Loan

Many lenders offer loans tailored to your truck repair needs. Repairs on one semi truck can frequently run between $10,000 and $20,000. When you work in the commercial transportation industry, you know that every day you’re off the road is a day of revenue or income lost. Many lenders have flexible requirements to qualify for a truck repair loan, and offer loans for less experienced drivers or drivers with bad credit.

If you’ve run into some trouble with your semi truck and need options fast, don’t hesitate. You can finance your repairs to get back on the road and continue earning your living. Consider refinancing, a title loan, a commercial vehicle repair loan, or a personal loan when you’re at a crossroads.

Understanding the Cass Freight Index in 2018

So, what is the Cass Freight Index, and how does it affect the daily lives of commercial truck drivers and owner-operators every day? Most people haven’t heard of the Cass Freight Index, but it’s actually directly relevant to the everyday lives of truck drivers across the United States. The Cass Freight Index reports how much cargo is being shipped and transported in all categories of commercial transportation like trucking, railway, and air. As a truck driver, the volume of shipments occurring across the United States every month and year directly affects your finances in the commercial vehicle industry.

What is the Trade War?

To understand how a trade war could affect the trucking industry, you first have to know what a trade war means. A trade war is a when two countries impose trade restrictions and taxes on goods from the other, and the escalation infringes on international trade volume. This is especially relevant today, as we enter a potential trade war with China. Although many people are worried about how the trade war will affect the U.S. economy, it’s actually possible that the United States will “win” while China ultimately suffers. The Chinese economy and growth rate are slowing. For example, in the last three months, U.S. equities have increased by 7.1% next to China’s nearly 10% fall. This could mean good news for American truck drivers looking to stay busy and paid.

In early March of this year, President Trump imposed a 25% tariff on steel imports and a 10% tariff on aluminum, both targeted at China. The U.S. economy and Chinese economy are two of the largest economies in the world, and stock markets across the world have already suffered in anticipation of a trade war with the EU. But the United States economy is in an upswing, and positioned to not only survive the trade war but thrive. So what does this mean for the men and women transporting cargo every day on the ground?

What Does the Cass Freight Index Tell Us Today?

According to the Cass Freight Index from May 2018, the U.S. freight economy is very strong in the face of a burgeoning trade war. In fact, according to Freight Waves, freight volume is higher than it has been in a decade. At its lowest during the great recession of 2009, the Cass Freight Index sank to .85, compared to 1.31 in 2018. The chart pictured here is from SONAR, a tool that helps analysts gather data to get a picture of the freight market. According to May’s Cass Freight Index report, the first five months of 2018 have excelled even beyond 2014—another very strong year in recent history for freight volume. According to the report, demand is rapidly expanding.

The U.S. economy’s strength is also likely to accelerate, usually indicated by transportation. Because these kinds of percentage increases are no longer immediately following a recession (instead they are weighed against already strong statistics), this is a uniquely positive sign for the economy. The largest 25 trucking companies also collectively rose their combined revenue by 5.4% in 2017. Although this percentage sounds small, it actually equates to billions of dollars.

The June Cass Freight Index has also continued to rise, and at increased acceleration. It’s rising—and rising faster than before. According to the June Index, June was the 21st consecutive month of increases, and brings the three-month moving average up to 8.8%. These companies are growing: the number of companies with 500 million to 1 billion dollars in revenue rose compar

ed to previous years (there are now five). This is good news for those considering a career in commercial transportation. Whether you’d like to become an owner-operator or work for a trucking company, the demand for drivers is rising even higher.

Improvements in the U.S. economy like this are usually a great sign for truck drivers on the road every day. If consumer demand is up, it means that people are buying more goods which means more cargo to ship and transport. Carriers will be looking to put out more goods, and truck drivers gain more work trying to meet those needs. Advancements in consumer demand as well as technology have directly influenced the trucking industry simultaneously, according to Fleet Owner. For example, Amazon’s nationwide (and worldwide) shipment centers are now strategically placed in towns and cities to enable same day or next day delivery for people everywhere. The demand for Amazon deliveries is very high, and these deliveries are exceptionally time sensitive. In general, the practice of online shopping in the United States has skyrocketed, and many Americans shop online exclusively or primarily. This too creates higher demand for shipping. This means more demand for commercial vehicles and cargo transport in more cities and towns. However, the severe traffic congestion in major metropolitan cities is still a major concern for the commercial trucking industry because that time and fuel spent in traffic is expensive.

Because there is still a shortage of drivers in the commercial transportation industry and the trucking industry overall, this boom should provide an opportunity for truck drivers to thrive in the industry. Companies even offer bonuses contingent on performance on the road (safety, efficiency, productivity) as well as bonuses for signing up or referring someone. These incentives are a good opportunity to ensure some initial financial stability if you’re a new driver or considering getting your CDL and financing your commercial vehicle. However, these incentives have so far not improved the shortage of truck drivers in the United States.

Where to Start

The Cass Freight Index is a useful tool to determine the current state of the U.S. economy in terms of shipping volume and demand. As the economy continues to look optimistic, many Americans might consider their options in a field like commercial transport. Some potential drivers may be discouraged by the expense of financing a commercial vehicle to become an owner-operator. If you have debt, child support trouble, or credit problems, you might think that you don’t qualify for a commercial vehicle loan. This isn’t actually true—there are many lenders that are flexible to poor credit. Financing a loan can be a quick, easy process if you find the right lender for your needs. To learn more about direct lending or financing a loan through your dealership, visit https://www.missionfinancialservices.net to learn about the services available in your area.

The Steps to Obtaining Your CDL

There are many understandable reasons why you may have decided to get your commercial driving license. Having your CDL opens your career options to a wide range of public service professions and prepares you to become a truck driver as an owner-operator or with companies. Read more to learn the steps you’ll take toward earning your commercial driver’s license, including driving courses, regulations and commercial truck financing options.

Why Get A CDL?

Many people pursue their CDL for financial security. Entry level drivers start at about $30,000 dollars a year, but as drivers gain experience this number rises. Experienced drivers can make up to $50,000 or $60,000 per year. While semi truck driving and cargo transportation is the most common reason to earn your CDL, it isn’t the only job opportunity that comes along with the license. Garbage men, firemen, bus drivers, commercial grain haulers, tow truck drivers and more all need commercial driver’s licenses. A commercial vehicle is generally defined as any vehicle with a GVWR of 10,000 lbs or more pounds or any vehicle designed to transport more than 16 people including the driver. It’s easy to imagine how many careers you can pursue with a commercial driving license in the transportation industry. So where do you start?

Check Out State Regulations Where You Live

In addition to federal requirements, every state has slightly different rules and regulations for obtaining your commercial driver’s license. The first step will be to identify the requirements for your state. A good place to start is with the federal minimum requirements, listed below:

  • Have a valid regular (non-commercial) driver’s license and be at least 18 years old to travel within our state (in most states).
  • Be at least 21 years old:
    • To drive a commercial motor vehicle across state lines (interstate).
    • To drive a commercial motor vehicle that contains hazardous materials.
  • Supply proof of lawful citizenship and residency
    • Social security card or birth certificate.
  • You’ll need to pass background screens.
  • You can’t have current driver’s license suspensions or revocations in any state.
  • Must surrender your regular state driver license once you earn a CDL.
  • Can’t have a driver’s license in more than one state.
  • Be able to speak and read English to drive a CMV in the United States. The written exams are only given in English.

Beyond these basic federal requirements, your state may have other things to make note of before you can work in commercial transportation. For example, in Georgia, there is an application fee of $35 and a $10 fee when you are given the license. Additionally, in Georgia you are not required to take CDL classes, however it is often recommended that you do. You’re more likely to pass your test the first time and have a better understanding of the knowledge you need for the road. This means you’ll be on the road truck driving sooner.

Types of CDL

There are three classes of CDL, based on different weight and seating standards. A class A CDL is required to professionally drive trucks with a greater GVWR than 10,000 pounds. Class B is for operating a vehicle of that size or pulling another vehicle of that size. Class C licenses are for driving buses with more than 16 passengers. Many professional drivers will actually obtain all of these. You can also earn “endorsements” in addition to your license that solidify your qualifications to drive school buses, tanker trucks, and passenger transport vehicles like tour buses. For example, a truck driver with a class A license can also drive other class B and C vehicles if endorsements are added.

Submit the Application

Once you’ve checked the regulations and required documents for a CDL in your state, you’ll be ready to fill out and submit your application. You can submit this application at your local DMV, and as always it’s recommended that you make an appointment to avoid a long wait at the DMV. You’ll then take your written test before you are given a permit and later, a road skills test.

Just like a regular driver’s permit, you’ll take your written test at the DMV and it will be scored immediately on the spot. If you pass this initial written exam, you’ll be issued your permit. The permit is what will allow you to practice driving and learn your road skills alongside a professional, usually from a driving school. Before you take your CDL test, you’ll need to practice your driving with a qualified license holder in the car with you.

Taking a Driving Course

It’s true that not all states require commercial driving school to gain your CDL. However, many states do, and the class will only benefit you on the road. Just like earning a regular driver’s license at 16, a permit is required first before you’ll be given a full commercial driver’s license. You earn your permit by passing a few written exams. Truck driving classes will teach you everything you need to learn to obtain your permit and then your license. Trucking schools can cost anywhere between $1,500 and $8,000. The classes usually last around eight weeks, and teach you the following necessary skills:

  • Vehicle Systems
  • Road Operations
  • Operating Systems
  • Documentation

Driving school classes are specific to the class of license you’d like to get, so that you’ll be as equipped as possible to drive a semi truck (Class A). Certain driving schools or classes may have their own requirements for admission, particularly medical health standards such as 20/40 vision, healthy hearing, and cardiac health. You’ll also probably take a drug test upon admission as well.  Once you follow through your courses, you’ll be ready to schedule your road skills test. Passing your road skills test in the car with the examiner will be your final step in receiving your official license, excluding any additional endorsements you want to pursue. The steps in every state vary, so depending on where you live there may be varying required forms or time restrictions associated with this process.

Financing Your Commercial Vehicle

When you do receive your commercial driver’s license, you’ll eventually be ready to finance a semi truck. Because semi trucks are more expensive than most people can purchase outright, you’ll likely need to take on a commercial vehicle loan. Factors like your credit, current child support and bankruptcy status, and more will affect the rate and terms of your loan. Once you select the right vehicle for you, your dealership will usually have a partnered lender to finance your loan for you. You can also reach out to commercial vehicle lenders to facilitate a direct loan.

Deciding to pursue your commercial driver’s license is an exciting step forward in your career. By doing your research and following these steps, you’ll be able to begin driving trucks in the commercial transportation industry! Don’t forget to plan your financing options as you plan for the future and gather your paperwork.

Autonomous Vehicles: What Does it Really Mean?

Autonomous Vehicles: What Does it Really Mean?

Autonomous vehicles are on the cutting edge of technology. Vehicles equipped with autonomous capabilities and technology are even available today for regular citizens with the purchasing power. But what about commercial vehicles? It’s no surprise that autonomous technology would be a great asset in the world of commercial transportation. Autonomous vehicles have the power to drastically reduce accidents by eliminating human error, and cut down on driver fatigue to keep drivers on the road for more hours. But how will they influence the commercial transportation and commercial truck financing industry?

The Latest Strides

In March of 2018, Google and Waymo announced that self-driving semi trucks would debut in Atlanta, transporting cargo bound for Google’s data centers. Waymo’s had this on the map for some time: they’ve actually been road testing autonomous vehicles in Arizona and California for a year. These vehicles are a distinctive bright blue and operate using the same technology that Google’s autonomous minivan, the “Pacifica,” uses. Driver distraction is one of the greatest threats to road safety, and autonomous vehicles offer protection against this.

The world’s first shipment carried out by a self-driving truck occurred in October of 2016, moving a large transport of Budweiser (over 50,000 cans).

Driver Readiness

When people think of autonomous vehicles, they picture a driver reading a book or watching a movie in the cab of car while the vehicle assumes complete, trusted responsibility. But the truth is that’s not always how it works. There are actually varying degrees of autonomy that demand different levels of “driver readiness.” So what is driver readiness? It is the state of a driver being ready to respond and act while operating an autonomous vehicle. Today, all autonomous vehicles require a base level of driver readiness.

There are six levels of driver readiness. For example, level zero is full control over the vehicle, the way you normally drive a regular car. Between levels 3-5, the system becomes more equipped to change lanes and turns. Level 5 is defined as a vehicle with autonomy to perform all driver functions that a human driver can. However, these vehicles still require someone to pilot the car to ensure safety, and must remain ready to intervene. This is good news for truck drivers worried about losing their jobs to autonomous vehicles, because the technology is still a bit removed from allowing unmanned vehicles onto the road. Highway driving is significantly easier for the AI technology to adapt to, but urban and narrow roadways prove more complicated. The ideal scenario would require a human driver to take over during more complex traffic scenarios, but allow the AI to take over once on the highway.

The University of Michigan’s Center of Sustainability predicts that these vehicles have the ability to reduce crashes by 90%. Not only is this valuable in preventing injury or deaths on the road, it also saves time by preventing delays that would result from accidents. This would also prevent potential costly damages against cargo as well. It’s easy to see the benefits that AI could have for the commercial transportation industry. Not to mention that autonomous technology would allow drivers to make fewer stops, saving time on their trips.

How does this technology work? Some AI systems reportedly function through a network of cameras that record a images that it then pieces together to form an idea of what’s going on in the “world” around. These images are processed constantly to form an ever changing “map” of the moving world.

Impact on Commercial Transportation

ABI Research conducted a survey to determine how likely large transportation companies are to utilize new technology with in their commercial vehicles. They found that 18% of respondents indicated that they are already in the process of addressing their options for autonomous vehicles.

The advent of advanced autopilot systems for commercial vehicles and semi trucks may also affect the industry by encouraging more people to become truck drivers. According to Fortune, there is a shortage of truck drivers on the road today. For every 12 loads in need of transportation, there was one 1 available truck driver, according to industry analysis. The average pay for drivers has even increased in the last several years. Yet, many people don’t feel comfortable taking on a job that requires long hours and lengthy sleepless shifts. These “copilot” systems would ease the strain placed on truck drivers, preventing accidents (particularly at night) and allow drivers to relax more during their trip (or even sleep in some cases). The technology also makes truck driving a safer job, for those who are interested in truck driving but were concerned about the risk of accident.

The systems simultaneously allow one driver to maximize their time by almost triple, a valuable asset in a market with limited drivers right now. Today, the FMCSA limits drivers to working 60 hours per week and taking specific breaks, but these regulations could yield more profit in that time with the advent of AI.

Another possibility is known as “platooning,” in which a trio of semi trucks drive in unison—one or two of them manned by drivers and a third truck self-driving. Platooning is a strategy that keeps trucks driving at a constant speed, less likely to be disrupted by traffic flow. This means lower fuel consumption, lower carbon dioxide emissions, greater traffic safety and it allows the truck technology to communicate.

Impact on Semi Truck Financing

At this stage, it’s unclear how this technology will impact the semi truck and commercial vehicle financing industry. The availability of autonomous vehicle technology to owner-operators is most likely a ways off. These semi trucks today are financed by large companies and carriers (like Otto, owned by Uber) who have invested in research and testing.

Dealership lending and direct lending to owner-operators is a vital component of the commercial transportation industry. Drivers need loans to afford their trucks—whether it’s one truck for a single owner-operator or an additional truck to add to their fleet. Whatever changes arise in the commercial trucking industry, lenders are invested in providing a means for drivers to earn a living.

 

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