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Are Truckers Included in the Third Vaccination Group?

covid 19 vaccine

We have officially passed the grim one-year mark since the first COVID-19 case was diagnosed in the United States. Since then, the trucking industry faced massive unemployment for a period of time and now faces a shortage of drivers due to several pandemic-related factors. With the global health crisis still in full-force, long-haul drivers must still be vigilant about protecting their health while on the road. The good news is, the United States is currently distributing multiple vaccines, meaning the country is on its way to returning to some semblance of normalcy. But when will long-haul truck drivers be eligible to receive the vaccine?

What are the Vaccination Phases?

The Advisory Committee of Immunization Practices (ACIP) and the Centers for Disease Control and Prevention (CDC) established a recommended vaccination schedule detailing when specific population segments should be vaccinated. The proposed vaccination schedule was designed to find a balance between prevention of morbidity and mortality and preservation of societal functioning—in other words, preventing as many unnecessary deaths as possible while protecting the economy. 

The first round of vaccinations has been broken up into three phases:

  • Phase 1a – Includes residents of long-term care facilities and healthcare personnel
  • Phase 1b – Includes persons 75 years of age or older and frontline essential workers
  • Phase 1c – Includes persons 65-74 years of age, persons 16-64 years of age with high-risk medical conditions, and other essential workers 

You may be asking yourself, “Where do truckers fit into this plan?” That’s a great question. Since early December, the American Trucking Association (ATA) has been pushing the federal government to include truckers in phase 1b as frontline essential workers due to the massive role truckers play in the distribution of vaccines. Originally, transportation industry workers were included in Phase 1b because of the risks posed to the health of unvaccinated truckers while on the road. The CDC has since updated its vaccination plan, moving the transportation and logistics sector to Phase 1c. 

States Control Vaccine Distribution

Here’s where things get tricky. Neither the CDC nor ACIP has the power to enforce who receives a vaccine in each phase or the vaccination schedule; these decisions are ultimately left up to the discretion of state governments. According to data from the Kaiser Family Foundation (KFF), only 33 states have adjusted their Phase 1c groups to reflect CDC and ACIP updates; of these states, only 17 follow ACIP recommendations. Many states have expanded the age range compared to the recommendations while some states have implemented even stricter requirements for the essential worker designation. 

Further complicating the issue is the fact that states are moving at very different paces to try and vaccinate all of their residents. The majority of states are in Phase 1a of the vaccination process while 10 states and the District of Columbia have moved on to Phase 1b. Very few states, like Michigan, have begun Phase 1c of vaccination. Stay up to date on Phase 1 vaccination roll-out by checking with your state and local governments for their specific vaccination schedule. 

Some Drivers Need the Vaccine More Than Others

Even within the transportation industry, there are specific groups of truckers who face a much higher risk of infection than others. For example, package delivery drivers often interact with the general public in their day-to-day routine, making it important for them to get vaccinated as soon as possible.

What about long-haul truck drivers? While they may not have as much public interaction as delivery drivers, truckers do face an increased risk of infection while on the road. The average long-haul driver spends 300 days each year on the road. That means for 300 days, truckers use public facilities for bathrooms and showers, eat at public restaurants, and interact with officials at truck stops and weigh stations. The ATA has tried multiple times to get long-haul drivers designated as Phase 1b frontline essential workers, noting that more than 80% of U.S. communities rely exclusively on trucks to receive necessary goods. 

As previously stated, individual states have the ability to make their own vaccination schedule, depending on their needs. For example, both Georgia and Massachusetts expanded their Phase 1b to cover all essential workers, long-haul drivers included. Navigate to your state’s website to find more information on its vaccination roll-out schedule.

What Does the New Administration Mean for the Trucking Industry?

white house

The start of 2021 comes with a new presidential administration in the United States as President-elect Joe Biden takes over as commander-in-chief on January 20. A change in national leadership is certain to have an impact on businesses and industries across the country; many wait with bated breath to see what changes the new administration ushers in. 

The trucking industry is no different. After a year of pandemic-induced economic recession, some owners/operators are hopeful new leadership will return the economy back to pre-pandemic levels while others are wary of how their day-to-day lives will differ with a new president. At the moment, there are three significant issues in the trucking industry that could be affected by a new administration: America’s infrastructure, clean energy, and labor laws.

Rebuilding America’s Infrastructure

The president-elect has made it clear his administration plans to work toward rebuilding America’s infrastructure countrywide, including the roads and bridges that support the economy. According to trucking.org, when the House of Representatives met in 2020 to discuss the Invest in America Act, Bill Sullivan, the Executive Vice President of Advocacy for the American Trucking Associations (ATA) argued that “an injection of real capital into our degraded infrastructure will jumpstart the economy—creating hundreds of thousands of good-paying, private-sector jobs in blue-collar trades—and strengthen its commercial arteries to support long-term growth.” 

Biden and the Democrats’ Senate majority (due to Vice President-elect Kamala Harris’ tie-breaking vote) could push legislation through that would invest billions of dollars into rebuilding our country’s infrastructure. The improved roads would benefit the trucking industry in the long-term, possibly saving billions of dollars; the American Transportation Institute estimates critical bottlenecks caused by poor infrastructure cost the transportation industry more than $74 billion annually. While improving the infrastructure is a great idea, the amount of construction required for the process would inevitably lead to more critical bottlenecks on driving routes—likely for a number of years. 

Pushing Clean Energy

Clean energy has always been a point of contention within the trucking industry. Many drivers want to protect the environment, but legislative proposals to do so typically come at a great financial expense to owner/operators who would have to purchase new “green” trucks. Biden has already stated he plans to “put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050,” which could mean electric vehicles for the transportation industry. 

Going to net-zero emissions could have repercussions for the trucking industry. A major benefit is that electric trucks cost about 20% less in operating expenses compared to diesel trucks. The glaring downside, however, is the upfront costs for an electric truck are sizable. There are currently almost two million semi-trucks on the road today, which means an investment of over $300 billion just to purchase new electric trucks for the entire industry. The transportation industry will want to keep a keen eye on the future of Biden’s clean energy plan. 

Changing Labor Laws

Another major difference to expect with the transition of power from Republicans to Democrats is a change in federal labor laws. The Biden administration is likely to put a pause on a recent Department of Labor rule that clarifies who is classified as an independent contractor and who is classified as an employee. Biden has also voiced plans to raise the minimum wage to $15 an hour. While this may not directly impact the salaries of drivers, it may increase the salary of non-driving employees in the industry, and carriers may reflect the increased expenses on drivers’ rates. 

The Biden administration also strongly supports the adoption of the Protecting the Right to Organize (PRO) Act, which “provisions instituting financial penalties on companies that interfere with workers’ organizing efforts, including firing or otherwise retaliating against workers.” The PRO Act would make it easier for truckers to unionize and bargain collectively. A final labor-related proposal from the Biden administration gives every employee 12 weeks of paid family medical leave mandated by the United States. Providing 12 weeks of paid family medical leave could impact the trucking industries if we see the expenses passed down from carrier companies. 

As the new year begins with a shift in leadership, the United States continues to battle a pandemic and economic uncertainty, both of which have impacted the trucking industry. With President-elect Biden entering the White House, the next four years will likely bring about several notable changes across industries. The trucking industry, specifically, needs to be prepared for how these changes—in infrastructure, clean energy, and labor laws—will reshape the landscape of the transportation industry in both short-term and long-term ways.

Everything You Need to Know About the Fiscal 2021 Transportation Funding Bill

At the end of July, the U.S. House of Representatives passed a package of fiscal year appropriations bills for 2021 with a 217 to 197 vote. The six bills address urgent national priorities and supply funding for federal agencies, including the departments of Commerce, Defense, Energy, Education, Health and Human Services, Housing and Urban Development, Justice, Treasury Labor, and Transportation. The $1.3 trillion bill package still needs to survive the Senate, but the overall goal is to provide funding for “96% of the government for the fiscal year 2021.”

The portion of the package for the Department of Transportation includes a request for a $107.2 billion budget for 2021. This amount will be broken down and allocated to various sub-departments within the DoT. In this article, we’ll go over what you can expect to see in 2021 if the bill passes through the Senate and how it will affect the trucking industry.

DoT Bill Breakdown

For the 2021 fiscal year, the DoT would be allotted $21.1 billion more than it received in 2020.

If the bill passes in the Senate, it will include:

  • $62.9 billion for the Federal Highway Administration
  • $18.1 billion for the Federal Aviation Administration
  • $1.3 billion for the National Highway Transportation Safety Administration
  • $3 billion for the Federal Railroad Administration
  • $18.9 billion for the Federal Transit Administration
  • $1.2 billion for the Maritime Administration

Aside from the $107.2 billion budget, the Department of Transportation hopes to receive an additional $26 billion “to strengthen and make more resilient our nation’s aging infrastructure” in light of the current economic climate. This amount would include National Infrastructure Investments and a budget for the DOT Office of Inspector General, to name just a couple.

To see the budget highlights in its entirety, click here.

What This Means for the Trucking Industry

The trucking industry is rapidly expanding, and there has been an extensive amount of care when it comes to growing and improving the trade. Earlier this year, the DoT announced its plans to add more upgraded truck stops across the nation. And while this may feel like a minor change, it will ultimately provide comfort and be a convenient perk for truckers conquering longer hauls.

The 2021 budget for the DoT would also be used to expand and rehabilitate the communities that serve the trucking industry. House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies Chairman David Price said:

“Our nation is facing an infrastructure crisis, with crumbling roads, aging transit and rail systems… Meanwhile, COVID-19 is ravaging communities, revealing and deepening existing disparities… [This bill] continues to build on bipartisan progress in recent fiscal years to increase funding for all modes of transportation—highways, aviation, transit, bike and pedestrian projects, rail, and ports—while improving safety and focusing on resiliency across all programs.”

As mentioned above, a significant plan for improvement is constructing and reconstructing infrastructures. Improving infrastructure in rural areas (where a majority of trucking fatalities occur) can lead to a safer work environment. Bettering foundations in urban areas also has its benefits. It could ultimately lead to less work-based hazards, reduced traffic, and fewer accidents, which leads to greater efficiency and steady economic growth. The increased funding for state and local governments also allows them to improve their local transportation systems and safety; this could boost public relations and enable lower-income communities to rehabilitate their areas. These changes will culminate in growing our nation’s communities and paving the way for more trucking companies to open up, create more jobs, and expand our nation’s economy.

What Can We Anticipate For 2021?

As of right now, the bill isn’t officially passed, and therefore we cannot say for sure what is to come, especially in light of COVID-19. The energy surrounding this bill is hopeful, though. House Appropriations Committee Chairwoman Nita M. Lowey said:

“This bill represents a forward-looking vision to rebuild our nation and strengthen our communities. Together, we can modernize our transportation systems, expand access to safe, affordable housing, and support our most vulnerable neighbors… With this bill, we are laying the foundations for sustained economic growth and expanded opportunity for every American in every corner of our nation.”

If the Senate passes the bill, you can anticipate positive actions for not only the trucking industry but the communities that benefit from it as well. Check out our blog to stay up-to-date on the latest developments for this story. If you want to kickstart your trucking career, contact us today to see how we can help you.

Pros and Cons of Employer-Paid CDL Training

Believe it or not, it’s both legal and entirely feasible for anyone in the U.S. to receive a Class A Commercial Driver’s License without any help from a private trucking school. This information can be hard to come by, however, as there are dozens of private trucking schools in most states who make a profit by convincing greenhorns the best way into trucking is through their particular programs.

What You Need to Get a CDL

That being said, there’s a lot of information and many steps required for anyone looking to acquire a CDL. As a result, going the lone-wolf route might not be in the best interest of someone looking for step-by-step assistance. If you’re attempting to get the license alone, you’ll have to do a great deal of research in order to learn what’s needed to pass the written test and then pass the truck inspection that’s required for acquiring a CDL in most states, which can be a challenge for some. The process of obtaining a CDL shares similarity with the process of attaining a regular driver’s license, with different requirements to qualify. Federal regulations require you to be at least 18 years of age before attaining a CDL. But, in order to drive a commercial vehicle across state lines (interstate travel), or haul hazardous materials (HazMat), federal regulations require you to be 21 years of age. To apply for a CDL, you must have a Social Security number assigned to you to verify your citizenship, a conventional driver’s license from your local Department of Motor Vehicles, one year of driving experience, and a good driving record.

Depending on the state where you’ll apply for your CDL, it’s possible your DMV has already published a guide to getting your CDL, like this one created by the state of Texas. Make sure to check your DMV web page concerning CDLs to see if it’s published a similar resource for your state.

To make a long story short, the cheapest way to get your CDL will always be to do it yourself, without putting money down on a private program. On the other hand, there are still potential benefits to the other two options available to new drivers, which are to: 1) Attend a private CDL training program, or 2) Participate in Employer-Paid CDL Training.

The Potential Benefits of Private CDL Training Programs

Many CDL training programs have connections in place that can make it easier for recent graduates of the program to get jobs with carriers. There’s also a very high demand for truck drivers in most states, so most individuals who receive a CDL shouldn’t have too much trouble finding employment in general. With that in mind, tuition for driving school can range from $3,000 to $6,000, making it a significantly larger investment than applying for a CDL on your own, and the most expensive way to get into trucking on average. While many students find it relatively easy to get student loans for their CDL program, interest rates in America have been on the rise in recent years, making private programs a pretty large price to pay for the convenience.

Employer-Paid CDL Training

These programs are more difficult to generalize about, as they’re slightly less well-regulated when compared to true-to-form private driving schools and can differ widely when it comes to day-to-day life in training. While you won’t have to put any money down up front in order to get your CDL, in most cases, receiving training from an employer comes with a requirement that you work for that same company for a minimum amount of time, and being terminated from that position or accepting another can come with financial penalties. If you begin, and then fail to complete Employer-Paid CDL training, it’s likely you’ll have to pay whatever amount that company values the cost of training.

The long and short of this is Employer-Paid CDL training can be an inexpensive and efficient way to get into trucking, but it also carries a great deal of risk. Prime Inc. is a huge trucking company in America that trains thousands of drivers every year; recently, it had to pay $28 million to drivers who participated in their paid apprenticeship program as a result of unfair underpayment to new graduates of their program.

Lawsuits like this aren’t overwhelmingly common, but participating in Employer-Paid CDL training programs inherently gives a lot of power to the employer and can make it difficult for new drivers to have a good understanding of what employment could look like with other companies, essentially reducing their access to the financial cushion afforded by the free market. In general, if you’re seriously considering Employer-Paid CDL training, it’s highly advised that you get a hold of someone who’s participated in that same program before you enroll.

How You Can Get Started

If you need private financing for a truck after you’ve finished your CDL program, consider contacting us at Mission Financial, where we can offer you a direct loan at a competitive rate. Make sure to visit our blog to keep up with recent trucking news as well.

Tax Update for Owner Operators and Fleet Owners

IRS Brings Back Form 1099-NEC

The IRS form known as 1099-NEC is returning for the 2020 tax year. The 1099 form has been in use for a long time—it’s the tax form used for independent contractors to report their taxable income. The NEC variant hasn’t always been in use, however, as it was replaced in the early 1980s by an updated, more robust version of 1099 MISC. This year, the form you’ll use to report information about your income as an independent contractor has changed. In this article we’ll describe why that is and what you need to know to be prepared. Filing taxes correctly can save you a lot of time, money, and headache—so make sure to do your due diligence and brush up on what’s new for 2020, and read our other tips for trucking success once you’ve made a plan for this tax season.

Supposedly, the revival of this tax form is in response to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which now requires businesses to file new information returns that are specific to their 1099 (aka non-employee) workers by January 31 of each year. The PATH Act created new problems with the IRS and its ability to process data, because the due date for 1099-MISC forms those same workers would have to file wouldn’t be due until March 31. In order to skirt this issue, the new version of 1099-NEC, available on the IRS website, contains a new box for indicating non-employee compensation (NEC). Note, the 1099-NEC form isn’t replacing 1099-MISC. Rather, it’s a supplemental form that deals with NEC. As we’ll explain later, 1099-MISC is used to report many different types of miscellaneous income, and for that reason, it still remains in use for employers, businesses, and non-employed contractors alike.

How This Affects Fleet Owners and Drivers

If you work for a fleet or are a fleet owner yourself, it’s important to acknowledge this change. If you’re an operator, this will be the form you’ll have to fill out and supply to both the government and your contract supplier, which is slightly different from the 1099-MISC you’ve likely filled out in previous years and will have to fill out again this year. If you’re a fleet owner, this will be the form you’ll have to issue to your independent contractors in 2020.

Form 1099-MISC, which most seasoned owner/operators should be familiar with, is what’s called an information return businesses of all kinds use to report payments to outside independent contractors. This form is also used for other types of income payments like royalties and rent payments, which only applies to certain types of businesses. Any contractor who makes more than $600 from one particular source will receive a 1099-MISC from that source. For the most part, the 1099-MISC is filled out a lot like form W-2, except it has extra boxes for giving information about non-employed contractors.

The 1099-MISC form is an information return used to report types of payments made to independent contractors. Payments included can come in the form of royalties and rents as well, but for most O/Os, this form will be used to assess what you owe based on what outside businesses paid you during the last fiscal year.

Here’s a full list of income types that can be reported on a 1099-MISC:

  • Royalties
  • Rent
  • Fishing boat proceeds
  • Medical and health care payments
  • Substitute payments in lieu of dividends or interest
  • Crop insurance proceeds
  • Excess golden parachute payments
  • Gross proceeds paid to an attorney

So, What Do You Report on 1099-NEC?

1099-NEC is for reporting non-employee compensation. These include the following taxable payment types to independent contractors: fees, commissions, prizes, awards, and other forms of potentially non-monetary forms of compensation for services rendered. For every 1099-NEC, there are multiple copies that need to be sent to the proper parties.

Use this checklist to make sure your 1099-NEC copies get sent to the proper places:

  • Copy A: Send this copy to the IRS
  • Copy 1: Send to your state tax department, if your state collects income tax
  • Copy B: Send to your independent contractor
  • Copy 2: Send this copy of the state return to your Independent contractor
  • Copy C: To be kept for your business records

Have More Questions about Taxes?

Taxes can be difficult to manage, which is why we make a point to keep our readers updated on the latest changes to tax code and different financial strategies for owner/operators. If you’re interested in what truckers have been doing to find enough capital to stay afloat during the coronavirus pandemic, read our blog on short-term financing. Keep up to date on the state of trucking in America by reading our posts on supply chain and employment topics, which you can find here. If you’re new to trucking, and want to get started with your own fleet or your own rig, contact us with any questions you might have and we can help you get started in a brand new career.

How the Payroll Protection Program is Helping Truckers

The Payroll Protection Program (PPP) is a form of federal relief that was provided to cash-starved small businesses as a response to the economic troubles caused by the COVID-19 pandemic. When the federal government signed the CARES Act into effect at the end of March of this year, it created two immediate forms of financial relief, the first being the Payroll Protection Program, a loan available to smaller businesses that delivers up to 2.5 times the amount of a business’ monthly payroll. PPP loans can be fully forgiven if spent correctly based on the government’s guidelines: payroll, rent, utilities, and mortgage interest payments.

The second form of financial relief presented came in the expanded form of Economic Injury Disaster Loans, which offer 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, Payroll 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. For the most part, EID loans are primarily directed toward businesses too large to apply for a PPP loan, which means small businesses that qualify for PPP loans should generally pursue that avenue.

How Truckers Can Make the Most of a PPP Loan

While full forgiveness of a PPP loan is an unbelievably sound financial offer, the drawbacks on spending your PPP loan on something outside of the explicitly approved channels aren’t as bad as you might think. According to information found on the U.S. Small Business Association’s website, PPP loans have an interest rate of only 1%, which is beyond competitive when compared to loans you could have found on the private market.

A large part of driving a semi-truck is managing the up-front costs. For most people starting out in the business, it’s unlikely you’ll get seated in a capable machine without having to find additional financial resources somewhere, somehow. The great thing about trucking is that it doesn’t usually take long to start paying off big chunks of your just-starting-out loans, but it’s always a good idea to prioritize paying off those loans as quickly as you can to avoid paying too much additional interest. For some people, paying off your private loan one year earlier can make a four-figure difference in terms of just how much your rig cost to own outright.

This is where the PPP loan can come to the rescue. If you’re experiencing financial hardship, it can be a strong strategy to take out the largest PPP loan you can be approved for and use that to pay your higher interest-rate debts. This is a form of roundabout refinancing that’s legal under the guidelines for PPP loans, and it’s a practice that private lenders have been encountering and actively encouraging for drivers who have fallen into delinquency on their loans.

PPP Loans Across the Country

As more than 95% of freight carrier companies in America consist of fewer than five trucks altogether, it makes sense that PPP loans have been a large part of keeping these small businesses afloat during the economic downturn. The Commercial Carrier Journal compiled data on the subject, finding that around 100,000 trucking companies received funds of all sizes, some of which were in excess of $5 million. Local and long-haul trucking companies received $12 billion total, which is more than 2% of all the capital handed out by banks in the United States under the PPP loan program.

In a CCJ survey conducted in June, more than 60% of the fleets that responded said they had applied for PPP funds, with some carriers describing the money as vital for surviving the  post-pandemic economic landscape. Another recent survey, conducted by Overdrive, of smaller outfits (independent owner/operators and fleets operating no more than nine trucks), found more than 50% claimed to have applied for PPP loans.

In an interview with CCJ, Mike Kucharski the co-owner and vice president of JKC Trucking, the largest refrigerated trucking fleet in the Chicago Metro area, said his business would have endured layoffs without the more than $2 million loan JKC received through the PPC program. Kucharski said he used the money for payroll, a condition that should allow the loan to be forgiven, but he’s not worried even if things don’t go as expected.

“Even if it doesn’t get forgiven,” Kucharski said, “I think the interest rate they’re going to charge us is a pretty good deal.” Either way, he sees it as a win-win situation.

If you have questions about semi-truck financing, come to the experts. Mission Financial has loan officers well-versed in public and private loan practices who can help you make sense of your next best move.

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