The Saga of California’s AB5 Independent Contractor Law For The Trucking Industry

How AB5 affects the trucking industry in California and nearby states

On Sept. 18, 2019, California Governor Gavin Newsom signed bill AB5 into law that will make it more difficult for companies to classify people who work for them as independent contractors with the new ABC test.

Under the ABC Test, a worker is presumed to be an employee unless the employer can show that all three of the following “prongs” or conditions are satisfied:

  1. the worker is free from the control and direction of the hiring entity in connection with the performance of the work,
  2. the worker performs work that is outside the usual course of the hiring entity’s business, and
  3. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Hours before the law was to take effect Jan. 2020, a federal judge issued a temporary restraining order blocking the state from enforcing it upon truck drivers.

Days later, a hearing on the trucking group’s request for a preliminary injunction was set and the plaintiffs can argue that they have carried their burden for purposes of emergency relief to show:

  • that they are likely to succeed on the merits,
  • likely to suffer irreparable harm in the absence of relief,
  • that the balance of equities tips in their favor, and
  • that their requested relief is in the public interest.

Fast forward more than a year to May 2021 and a three-judge panel of the Ninth Circuit Court of Appeals has struck down a lower court’s injunction against the application of the California’s AB5 contractor law and its ABC test to trucking.

The California Trucking Association has 14 days to seek rehearing, which should be expected on or before May 12. If this request is denied, or if the rehearing fails to change the view of the court, it will be just seven days before the injunction lifts.  

The United States Supreme Court on November 15th invited the Solicitor General to file a brief expressing the federal government’s views on whether the Supreme Court should hear California Trucking Association’s suit claiming federal law preempts California’s AB 5 for the trucking industry.

The injunction should remain in place while SCOTUS awaits the Solicitor General’s brief.

More recently, the Supreme Court of the United States declined to hear the first AB5 case from carrier Cal Cartage on October 4, 2021, leaving in place a split in authority regarding whether states can change the rules regarding how truckers are treated.

The next step will be CTA’s case at the U.S. Supreme Court that relies on slightly different arguments and factual statements than Cal Cartage case.

 

How AB5 affects the trucking industry in California and nearby states

To describe the situation, let us look at port truckers in California. There are around 13,000 truckers regularly serving the ports of Los Angeles and Long Beach. However, only a few hundred are classified as employees.

The others are owner-operators who traditionally:

  • lease their rigs from trucking companies,
  • drive under those companies’ permits, and
  • rely on them for work assignments.

These owner-operators are paid by the load and get a 1099 independent contractor tax form at the end of the year.

While this is a popular business model, there are some who abuse this relationship. For example, to meet the state’s strict clean-air regulations, trucking companies forced drivers to purchase new trucks beginning in 2008 rather than assume the expense. Many drivers, who also pay for diesel fuel, repairs, and insurance, fell into debt as they worked overtime to pay off huge loans for their trucks. If they missed payments, some companies reclaimed the trucks and fired the drivers, seizing their equity.

The new AB5 law would basically require carriers to hire the independent contractors and pay them health insurance and other employee benefits.


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It is not just California carriers that must deal with the law’s ABC test B prong, which requires carriers and contractors to be in essentially separate areas of business. Carriers across the state’s border that deliver inside California will be required to meet this B prong as well.

Today, the carriers that have been taking the “wait and see” approach on the law and the court’s process are now facing a near-term reality that the independent contractor system might not be possible and will have to face an increase in costs to hire the drivers.

Other carriers have been cutting ties with California as the cost of doing business in the state are greater than the reward and pull out of any California operations to shield themselves from the impact of the AB5 law.

 

CNS can help fleets with our new driver hire program

If AB5 does not include a trucking exemption, then there will be a flood of independent carriers going through a new hire process. There are a lot of rules around the hiring process, not limited to drug testing, CDL Clearinghouse queries, compliant DQ file process, and more.

To get these drivers on the road fast, Compliance Navigation Specialists has developed a new hire program that will streamline your hiring process.

Our New Hire service includes the following:

  • Tailor Drive Qualification file (paper) or Online Tailored Driver Qualification File (Paperless)
  • Initial Audit
  • Previous employer inquires completed on your behalf
  • Initial Motor Vehicle Report (MVR)
  • Pre-Screening program report (PSP)
  • Online Record Retention
  • Pre-employment drug screening verification
  • Doctor on medical card verification
  • FMCSA clearinghouse full query
  • Driver Qualification
  • New Hire phone support
  • and more

Accuracy, organization and diligence are crucial to keeping your files in order and ready for an audit at a moment’s notice. Our DQF Management System is completely customizable to your individual needs. The consultants at CNS stay in communication with you regarding document updating, as well as offering comprehensive reports upon request, and reports of routine audits by our own DQF Auditors.

Our driver management and new hire management services will exceed your expectations. You focus on trucking, and let us focus on your driver file management. If you have a fleet of drivers, we assure you that you can’t do this cheaper in-house.

Eliminate the administration cost and have Compliance Navigation Specialists manage your files.

We will ensure that your information is collected, current, and complete. In addition, we will continue to update your files as required, and let you know when an updated piece of information is needed.

For more information, contact us at 888.260.9448 or info@cnsprotects.com.

Driver File Management

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In-cab Credentials Going Paperless With Pedigree’s OneView ELD

pedigree oneview eld digital library add-on

Pedigree’s “Digital Library” add-on allows managers to upload, assign files by driver, vehicle, trailer, carrier, and send documents crucial to a fleet’s daily operation straight to a driver’s tablet including licenses, medical cards, and more.

Fleets, regulatory agencies, and states have been using technology to automate tasks and focus on paperless or contactless solutions since the pandemic started.

ELD providers, like Pedigree Technologies OneView, have taken advantage of this trend by offering a digital library solution that replaces the need for in-cab paper permit book binders. 

Permit books have annoyed drivers for many years as roadside enforcement have caught drivers with misplaced or expired credentials and important documents.

As the latest time-saving OneView solution, the Digital Library add-on allows businesses to boost productivity, avoid fines, and communicate more clearly.

pedigree eld digital library add-on In-cab Credentials Going Paperless

This tool allows managers to upload and send documents crucial to a fleet’s daily operation straight to a driver’s tablet including licenses, medical cards, and more.

Now drivers will not get stuck on the road without the proper documentation ever again with the need-to-know information right at their fingertips.

The Digital Library tool allows companies to easily store and manage the digital distribution of documents, images, and other files relevant to their daily operations – making important files available to drivers in-cab, when they need them most.

No matter the fleet size, the tool will be able to upload and assign files by driver, vehicle, trailer, carrier, and region.

Important in-cab documents needed at roadside or while on the road

Required in-cab documents depend on what you are driving, where you can travel, and what technologies you are using.

Important truck and trailer documents include:

  • truck and trailer registration
  • proof of annual maintenance inspection
  • IFTA license
  • HAZMAT permits
  • over dimension permits
  • and more

Depending on what state you travel through, there could be important state registration or certificates, such as:

  • intra-state authorities
  • Kentucky’s carrier vehicle inventory list for heavy vehicles
  • New Jersey’s business registration
  • New Mexico’s weight distance tax permit for heavy vehicles, or
  • New York’s highway use tax registration

Then there are the technology documents that may always be required to be in the truck. This would include a copy of your ELD telematic device instructions or errors guide. Though not required, it would be good to have a digital copy of instructions for in-cab cameras or other fleet management solutions.

pedigree eld digital library in-cab electronic documents and permits

Other important documents could be stored as well, including:

  • a driver’s medical card
  • maintenance information
  • collision instructions
  • important phone numbers
  • current bills of lading
  • company policies
  • driver training tools
  • and more

Is it time to switch ELD providers?

With popular ELD companies facing public scrutiny to the transition away from 3G devices, it is a good time to make sure you are using ELDs that match your fleet’s needs and using the data to your advantage.

We have searched high and low for a partner in the telematics and ELD industry and have turned to Pedigree Technologies as a trusted brand striving to offer a best-in-class ELD solution with OneView.

CNS can also help with all your licensing and permitting needs. No matter what state you are in, your size (from one vehicle to a thousand vehicles), nor the complexity of your operation, we here at CNS can handle it.

If you want to learn more about our Licensing services, give us a call at 888.260.9448 or email us at info@cnsprotects.com.


Further ELD Questions? Get a Free Demo

Contact us with any questions. Our ELD specialists can perform a demo with our ELD devices.

Major CDL Clearinghouse Deadline Approaching or Face Fines

fmcsa cdl clearinghouse annual queries

According to Landline Magazine on Dec 30, several owner-operators are experiencing difficulties registering for FMCSA’s Drug & Alcohol Clearinghouse and that they haven’t found any help through the agency’s 800 number as Clearinghouse hits traffic jam.

Do you remember the beginning of 2020 when the crash of the FMCSA’s CDL Clearinghouse website caused registration confusion?

The launch was supposed to be a smooth process as companies had three months prior to register. But few did.

As a result of so many people attempting to register through the website at the last minute, the website was overloaded and crashed, causing registration errors and quick fixes just to get people in the system.

The FMCSA Clearinghouse is an online database where new drug and alcohol testing violations and return-to-duty information of CDL drivers is stored and searched.

This database has worked well in preventing drug users from job hopping, as well as open the book on what is happening real-time with the trucking industry drug testing statistics.

In the first 8 months the Clearinghouse was in effect, over 35,000 drivers were found with a positive drug test forcing them  to begin the return-to-duty and SAP process before getting back on the road.


DOT’s Clearinghouse faces a key test as fleets will likely flood the system in the coming weeks — CCJ Article

“We’ll see what happens with it,” said Lucas Kibby, marketing specialist at Compliance Navigation Specialists. “There’s going to be a large influx of people going to the site around the end of December and into the first few weeks of January, when people start realizing the rules.”

CCJ Article – Nov 4, 2020

According to the latest Clearinghouse report, marijuana accounted for nearly half of the positive drug test results, followed by cocaine, methamphetamine, and amphetamine.

However, we are now less than three months away from another major Clearinghouse deadline where companies could face fines, if in violation.

Clearinghouse website may crash again as required annual query deadline approaches

With the FMCSA Clearinghouse now in effect for pre-employment, random testing and return-to-duty processes, employers of CDL drivers must follow a new pre-employment process when hiring a potential new driver.

Violations can occur if required information is not loaded into the database, or if new-hired drivers start driving before a new hire gives consent for a detailed query.

The employer needs to make sure the driver is registered to the FMCSA Clearinghouse, then request electronic driver consent to run a detailed query, run a query on the driver (employer or C/TPA), and ensure no recent negative drug testing history is present.

The other major required process for employers, including owner-operators, is to annually query all current CDL drivers at least once a year to make sure no violations appeared in the database. If the limited query returns any results, a detailed query is required.

This means the majority of CDL drivers need to have had a limited query run on them by January 6, 2021 or face potential violations and fines if found to be done late or not at all during an audit.

Early Clearinghouse registration issues led officials to advise employers to wait to register until December 2020 or January 2021. Consequently, a large spike in DOT Clearinghouse web traffic is expected as companies rush to register and submit annual queries to the DOT Clearinghouse before the deadline.

What fleets need to do before 2021 deadline

Every employer with CDL drivers needs to verify that they are registered to the FMCSA Clearinghouse. After registering, employers will purchase query tokens that will be used to when they want to run limited or detailed queries on their drivers or potential new drivers.

Check out our industry library resources of 15 videos, 2 ebooks, industry links, and CNS In The News content.

Owner-operators should purchase around 5 query token to run their annual queries each year, lasting them five years before they need to purchase more tokens.

Larger fleets should purchase query plans around two-and-a-half times their driver size to last two years of annual queries and a handful of new hire drivers.

Finally, annual queries can be ran on all CDL drivers within the company.


Drug and Alcohol Services

Do you need help registering to the FMCSA Clearinghouse or looking to switch to a trusted drug testing consortium?

At CNS, we offer a comprehensive Drug and Alcohol Consortium Service and are a certified consortium and third-party administrator (C/TPA).

For more information, contact us at 888.260.9448 or info@cnsprotects.com.

How to protect yourself from truck accident litigation with compliant driver files

compliant driver files

Every year, government auditors find hundreds of violations when reviewing DQ files for compliance.

A critical element in maintaining a safe carrier operation is monitoring driver qualifications files effectively and in compliance with Federal Motor Carrier Safety Administration (FMCSA) rules. 

When your driver files are not in compliance, the company faces risks of misplacing documents, filing inaccurately, incurring violations, or being hit with costly litigation.

Truck accidents are inevitable and more than 50% of these crashes are caused by driver fatigue and driver error, according to statements made by the Pennsylvania State Police motor carrier enforcement unit at the CNS and NIS Safety Conference earlier this year.

Litigators will look at the crash information and the driver files to find unsafe driver trends. If the company handles their hiring and driver qualification process well, there is a reduced chance of litigators finding unsafe driver trends that can harm the company with violations and heavy fines.  

So, what are driver qualification files?

Put simply, a driver qualification file is the driver’s personnel file and is required for anyone driving a Commercial Motor Vehicle as defined be the FMCSA in 49 CFR 390.5 or state authorities.

Check out our industry library resources of 15 videos, 2 ebooks, industry links, and CNS In The News content.

A DQ file is needed even if the driver is a mechanic quickly moving a vehicle, the company owner moving a vehicle, a part-time or temporary driver, or a driver who works for a private company.

After a job offer is extended to a driver, carriers need to build a driver file that includes:

  • driver’s licenses
  • employment application
  • previous employer inquires
  • motor vehicle records
  • credit history and background checks
  • drug test results
  • FMCSA Clearinghouse queries
  • medical certificates
  • and more

Driver File Management

Questions about Driver File Management? Fill out the form to get started


What information needs to be gathered in driver qualification files (DQF)?

The difficult part of the DQ File is that companies must know the driver qualifications file requirements to pass a safety audit. Every year, government auditors find hundreds of violations when reviewing DQ files for compliance.

Most of the time, violations occur for a few reasons, including:

  • companies taking shortcuts in the hiring process
  • staff managing the driver files not being trained in DOT regulations, or
  • companies not realizing they must meet these stringent driver qualification file requirements if their fleet is not focused on trucking.

 

Using driver files to protect yourself from truck accident liability

Sometimes companies may hire and retain employees who are not qualified to drive a commercial motor vehicle.

Other times, the driver’s history and record might be okay, but the company did not build a complete driver file to reflect this.    

The consequences of can be steep as companies face litigation and blame.

In a litigator’s eyes, driver qualification files reflect any kind of negligent hiring and retention claims and provide punitive damages against the carrier for continuing to employ someone they knew was dangerous or could hurt someone.

For example, if the employer failed to do a thorough background check on the driver, that can support a strong negligent hiring claim.

Similarly, if the driver had any previous violations, this is very important in terms of proving notice against the carrier to support a claim for punitive damages.

At a minimum, an annual review of driving performance and insuring driving credentials are valid can reduce unsafe drivers or pinpoint areas where further training could correct bad driving habits.

Driver information litigators look for after an accident:

  • governmental agencies responses to inquiries regarding driver records
  • driver’s past employment records and employers showing they contacted them (or repeatedly tried to) at the time of the driver’s employment
  • driver’s workers’ compensation file
  • medical evaluations of the driver
  • drug test results, including negative results
  • driver training testing documents and company safety meetings attendance
  • driver’s DOT file
  • prior violations
  • driver’s annual reviews
  • disciplinary records

Beyond these records, companies need to avoid these common driver file violations:

  • not having a current DOT medical card on file
  • not having the initial driving record on file (MVR)
  • not having a DQ file for each driver that needs one 

Proactive Driver Qualification File Management

Accuracy, organization, and diligence are crucial to keeping your files in order and ready for an audit at a moment’s notice and ensuring new drivers are properly qualified before operating in a safety sensitive position.

At CNS, our DQ file management system is completely customizable to your company’s needs. The consultants at CNS stay in communication with you regarding document updating, as well as offering comprehensive reports upon request, and reports of routine audits by our own DQ file auditors.

Our DOT Compliance Specialists will ensure all DQ files for your company will be ready to pass an FMCSA audit.

Start managing your DQ Files now


Combining multiple services?

Our safety management programs are perfect for combining multiple services and can be tailored to fit your needs, whether you are a new owner operator or a seasoned trucker or business owner.

At CNS, our DOT Compliance Programs focus on Proactive Safety Management (PSM), a mindset that will ensure your fleet’s safety and compliance is always in order and ahead of the FMCSA.

Our PSM Motor Carrier Program includes:

  • ELD management
  • Driver Qualification File Management
  • New driver on-boarding
  • Driver safety meetings
  • CSA score management
  • Policies and handbooks
  • Vehicle maintenance
  • and more

Learn more about our DOT Compliance Programs

For more information, contact us at 888.260.9448 or info@cnsprotects.com.


Prevent Driver Qualification File mistakes when hiring drivers

Driver Qualification File | DOT Compliance Services | CNS

How to set up a Driver Qualification File?

In industries like trucking, construction and distribution, hiring a commercial motor vehicle driver requires companies to follow strict Federal Motor Carrier Safety Administration (FMCSA) guidelines. The regulations under 49 CFR Part 391 lists requirements for Driver Qualification File (DQF) Management.

What is a Driver Qualification File or DQ File?

Driver Qualification Files are simply the driver’s personnel file that includes information of past employment, drug testing history, motor vehicle records, credit history, and more.

Failure to maintain these driver qualification file basics can lead to CSA violations, fines, an Unsatisfactory Safety Rating, and Out-of-Service Orders. In 2019, there were over 3,500 enforcement cases alone that averaged over $6,600 in fines per company, with the average cost of a Driver Qualification File violation fine over $600 per fine.

It is important to understand what the common DQ file violations are and how to prevent them from happening in your company’s driver qualification file management process.

Mistake #1: Not having a Driver Qualification File when required

When is a driver qualification file required?

A driver qualification file, according to 49 CFR 390.5, is required for anyone who operates a Commercial Motor Vehicle (CMV). This includes vehicles that weigh over 10,000 pounds, are placarded for hazardous materials or are designed or used to transport multiple passengers (at least 9 or more).

DQ files are needed even if the driver is salaried, a mechanic, the owner of the company, a part-time temp driver, is only driving one time, works for a private company, etc. There are some exceptions found in sections 390.3, 391.2, and 391.61-391.69.

For intrastate commerce where the driver stays within a single state, some state requirements may vary.

Mistake #2: Not obtaining a driver Motor Vehicle Record

What is a Motor Vehicle Record (MVR)?

An MVR is a report of driving history from the Department of Motor Vehicles (DMV).

The MVR contains important information from a driver’s license including, endorsement level for any kind of vehicle, accident reports, DUI convictions, vehicle crimes, traffic violations, license suspensions and more.

According to the FMCSA, a copy of the MVR(s) obtained in response to the inquiry must be placed in the driver qualification file within 30 days of the date the driver’s employment begins and be retained in compliance with 49 CFR 391.51.

If no MVR is received from the State required to submit this response, the motor carrier must document a good faith effort to obtain such information and certify that no record exists for that driver.

An MVR must be pulled from every state where the driver has held a license or permit in the past three years. If any red flags appear, a potential employer could use it to influence their hiring decision. This is why it is important for drivers to be aware of what is on their MVR and should request one every year. If any information is inaccurate, the driver could request to fix the mistake.

The carrier must then obtain an updated MVR annually, and review it to determine whether minimum safe driving requirements have been met, and confirm that there are no disqualifying offenses.

Mistake #3: Not keeping a driver qualification file long enough

How long to keep driver qualification files?

Another common mistake is how long you need to keep driver qualification files.

Some companies dump records after three years of employment, and do not keep these initial safety records on file for three years after driver is no longer employed at the company.

It is important to note that, separately, any safety history information gathered from previous employers must be retained for as long as the driver is employed by that motor carrier and for three years thereafter.

Mistake #4: Not having important drug test history and medical card on file

For drivers who hold a commercial driver’s license, the motor carrier must obtain a new motor vehicle record (MVR) within 15 days after each new DOT medical exam and place that in the driver qualification file as proof of medical certification. Each new medical exam certificate must be placed into the DQ file and kept there for at least three years, to show that the driver was medically qualified to drive at all times.

Often times these medical cards are out-of-date or the DQ files never replaced the old medical card on file. During a DOT audit, this is a simple mistake that can be caught and fines for each violation in your fleet can add up quickly.

Similarly, important drug testing history and alcohol test results must be saved in the DQ File for at least one year. These test results includes: previous employer test results; copy of alcohol test form, with results and drug test chain of custody form; documents sent to the employer by the MRO; documentation of any refusal to submit; and documents provided by a driver to dispute results.

How to prevent Driver Qualification File Management mistakes with CNS

After a driver is hired, managing driver files becomes an ongoing burden as employers are required to keep files current for drug tests, physical exams, safety records, annual MVRs, commercial driver’s licenses, endorsements and even conducting annual driver reviews (a burdensome process).

With high driver turnover in trucking, construction and distribution fleets, this problem becomes amplified.

CNS goes beyond just helping you manage your driver qualification files. Our Proactive Safety Management program helps to manage your entire plan for safety, compliance and record keeping, from drug consortium management to vehicle and equipment maintenance.


Read more about our Proactive Safety Management program


For more information, contact us at 888.260.9448 or info@cnsprotects.com.

Truck driver challenges during Coronavirus pandemic


COVID-19 and challenges for truckers

Truck drivers face concerns whether coming or going in this fight against the coronavirus (COVID-19) pandemic. Personal and economic challenges face the 1.8 million CMV drivers in America, because unlike other businesses, a driver cannot simply choose to work from home.

How the Pandemic is Affecting Limo, Bus and Touring Companies

Drivers face personal risk during this outbreak

At the forefront, the personal health and wellness of truck drivers is at stake. Drivers are literally in the front seat of this crisis as they travel the country delivering goods.

Several factors put truck drivers at greater risk of being exposed and/or contracting the coronavirus, including:

  • nationwide travel
  • handling of overseas goods
  • exposure at truck stops for meals and showers
  • multiple facility stops

On the flip side, driving is mostly an isolated activity. Still, it’s difficult for a driver to practice the social distancing recommended by the Centers for Disease Control and Prevention (CDC).

Drivers face greater risk of illness

Besides the greater risk of contact with the coronavirus, according to a 2014 study by the CDC, drivers may also be at greater risk of falling ill from the virus .

The study showed more than half of truck drivers smoke and are two times as likely to have diabetes as the rest of the population. These health factors put them in a higher risk category should they contract the COVID-19 virus strain.

The issue grows greater with the realization that 38% of drivers do not have health insurance (same CDC study). Furthermore, paid sick leave in the trucking industry is uncommon.

Many companies are now conducting pre-shift screenings and temperature checks to further protect their employees.

Drivers face economic uncertainty

Additionally, financial stability for drivers is threatened by the secondary fallout of the virus, economic downturn. Since between 350,000 and 400,000 of America’s drivers are independent owner-operators, they work freelance, without the benefits of regulations that protect workers from sudden wage loss.

For fleet drivers, however, the Worker Adjustment and Retraining Notification Act (WARN) protects workers by requiring companies with more than one hundred employees to give at least 60-days of notice before layoffs or closings, if it would affect 50 or more employees.

Still, companies can increase down days or slow line rates as needed when addressing a market downturn.

Waiting out the viral impact

It seems likely the coronavirus outbreak will amplify pricing and capacity swings in the US trucking industry in 2020. Logistics experts warn of a coming price shock for shippers. Downshifts in the trucking market capacity and shipping rates are expected to remain longer than normal. However, when freight volume rises, as is expected when quarantines lift, so will rates. 

>>> How are trucking companies preparing for the Coronavirus? <<<

Factors that increase shipping rates include the following:

  • short supply of trucks
  • increase in freight demand
  • produce season
  • spring retail sales surge
  • manufacturing increases

Each of these factors could result in greater truckload capacity, which would ease the pinch of the coronavirus impact to the trucking industry and drivers, specifically.


Trucking Startups, Hiring Drivers and CDL Training

No matter what your current situation is in the trucking industry, we have a service that would be valuable to you, like CDL trainingstarting your own trucking business or hiring new, qualified drivers.

If you have been laid off, this might be a good time to start training to get your CDL. There will be a need for more drivers as businesses and events resume normal operation in the coming months.

If you are already a driver in the trucking industry, this may be the perfect time for you to start your own trucking company. Securing loads will not be an issue once the economy bounces back.

If you are a trucking company, you will most likely need to be hiring qualified drivers in the near future, and you will need to get good, qualified drivers very quickly, as well as manage all of the files for those drivers.

For more information, contact us at 888.260.9448 or info@cnsprotects.com.

Trucking companies brace for Coronavirus impact

Coronavirus

Trucking and the Coronavirus

With the world focused on the fear of illness and global spread of this year’s coronavirus (COVID-19), trucking companies brace for a secondary threat as well, as the freight market slows.

Prior factors affect the trucking industry

Businesses had already stuffed their warehouses with imported goods at the end of 2019, trying to get ahead of the tariffs placed against China. Then, as concerns over the virus itself grew, this slowed import shipping. Trucking companies with work in and around ports have felt the impact already.

Current factors add burden

Currently, several factors are impacting the trucking industry and putting the brakes on freight. First, the national shift for many businesses to encourage their employees to work from home. Secondly, consumers have drastically reduced their daily activities, without choice in most states.

Each state has implemented some sort of guideline to follow, each on a different level, but with the same end goal, to create social distancing. Most states are closing schools, preventing operation of non-essential businesses and even preventing gatherings of 50, 25 and even 10 people.

With a number of major events being cancelled, such as the Mid-America Trucking Show and sporting events (eg. NCAA tournament), the trucking industry has taken a big hit as well, since the need for truckers to carry the necessary supplies to these events has vanished.

Transportation market follows industry market

Garrett Bowers, President of Bowers Trucking in Oklahoma commented to Transport Topics news outlet: “If industry is stifled, transportation will follow.”

Trucking companies can expect to find themselves pinched tightly between all these factors. And, of course, layered on top of these concerns is the well-being of their drivers as they send them out across the nation, where they could be more susceptible to contracting the Coronavirus.

Many companies are now conducting pre-shift screenings and temperature checks to further protect their employees.

Some companies, mostly those immediately affected near the ports, have begun reducing capacity and laying off independent owner-operators in response to the downturn.

But across the country, companies feel the hit of this pandemic. Fleets have been absorbing a cost burden from being unable to return empty containers, as well as administrative costs.

Hoping for a rebound

There is definitely potential for a rebound in the trucking industry once shipping from China and other countries resumes normal pace. However, this potential rebound will have a delay that can impact many companies.

Companies should anticipate and plan not only for reduced rates and capacity, but also for difficulties at the loading docks. If shippers must reduce their own workforce due to coronavirus-related illnesses or quarantines, loads may not be ready when truckers arrive.

Companies should prepare for a double-headed approach to address both the current slow-down and the eventual recovery when shipments begin to surge to make up for delays.

>>> How are truck drivers affected by the Coronavirus? <<<


Trucking Startups, Hiring Drivers and CDL Training

No matter what your current situation is in the trucking industry, we have a service that would be valuable to you, like CDL training, starting your own trucking business or hiring new, qualified drivers.

If you have been laid off, this might be a good time to start training to get your CDL. There will be a need for more drivers as businesses and events resume normal operation in the coming months.

If you are already a driver in the trucking industry, this may be the perfect time for you to start your own trucking company. Securing loads will not be an issue once the economy bounces back.

If you are a trucking company, you will most likely need to be hiring qualified drivers in the near future, and you will need to get good, qualified drivers very quickly, as well as manage all of the files for those drivers.

For more information, contact us at 888.260.9448 or info@cnsprotects.com.