Diversified Industrials

American Trucking: Navigating COVID-19 Roadblocks

Few sectors of the U.S. economy go untouched by the $800 billion trucking industry. The overall trucking industry employs more than 8.7 million Americans, and the 3.5 million professional truckers in the industry haul more than 70 percent of all domestic freight. One recent study found that grocery stores would begin running out of food within 3 days if long-haul truckers stopped working.

Trucking is playing an essential role in the response to COVID-19 and will play an equally important role in the U.S. economic recovery. As such, the industry has a unique opportunity to raise its voice, inform the debate, and advance shared priorities.

Safety Regulations

Recent moves by the Federal Motor Carrier Administration to relax certain rules and inspection requirements were designed to move critical supplies where they are needed as quickly as possible. However, these rule changes exposed the industry to risk. Certain hour limits that were designed to promote safety and limit the industry’s liability to lawsuits that result from overextended drivers involved in accidents have now been waived. Communications about these rule changes (ones that emphasize their temporary nature and their necessity) are needed from the industry. The importance of strong federal regulation in this sector should also be emphasized to convey how state-specific regulations could lead to a messy patchwork of rules that leave the industry, its drivers, and our roads less safe. It is also imperative that the industry takes a leadership role in demonstrating how it is protecting drivers and the public while continuing to provide essential services. That leadership approach should be taken to showcase best practices and technological developments that are being used to assist drivers and maintain road safety.

While the public is likely in favor of these rule changes if it means their goods arrive and arrive faster, a high-profile incident resulting from the intense physical, mental, and emotional strains put on drivers during this time could change that and deal a blow to the industry as a whole. In addition to reputational damage, government agencies could rescind the temporary rule changes or enforce more stringent rules than those that existed before the COVID-19 outbreak. Companies must be prepared for the potential backlash that could arise from these rule changes and have plans in place to ensure business continuity should rules change again.

Employee Risks

While most of America practices social distancing, truck drivers are heading into work as usual and often for longer shifts than normal. Truck drivers face virus exposure risks as they come into contact with suppliers, gas pumps, and foodstuffs on the job. The business shutdowns required by many states’ stay-at-home orders have made their jobs even more complicated. Many rest stops, restaurants, and hotels often frequented by truck drivers have limited their hours and services to protect employees, leaving few options for drivers who need a meal or rest stop.

Truckers should be one of the first groups in line for COVID-19 testing given their importance to ensuring the U.S. economy remains resilient during and after the crisis. The industry should also be prepared for the possibility that truckers and those with whom they regularly interact may contract COVID-19. Should this happen, public concern about the safety of the goods being transported will rise and the reputation of industry could be negatively impacted. A mild to moderate spread of COVID-19 in the trucking industry would grind the U.S. economy to a halt.

With one of the older workforces in America, the industry is at even greater risk. Truck drivers themselves are already taking steps to protect themselves, and the American Trucking Association recently partnered with Protective Insurance Company to provide truckers with 55-gallon drums of hand sanitizer along main arteries in eight states. Guaranteed pay for sick workers is another way to ensure truckers who test positive for COVID-19 feel fiscally safe enough to stay off the roads and limit exposure.

Driver Shortages

Driver shortages are not new to the industry, but they are being felt more acutely now than ever before. A shortage in the number of drivers has the potential to create deep, long-lasting supply chain disruptions. Industry experts gauge the current shortage at more than 60,000 drivers with the potential for that figure to rise above 100,000 in the years ahead.

The industry requires a coordinated effort to attract and hire new talent, and now is a good time to ramp-up efforts given the historically high unemployment rate currently facing the United States and the essential role that truckers are playing in our economic recovery. With so many displaced workers from other industries (food service, public transit, etc.), there has never been a bigger talent pool from which to recruit. The importance of drivers and trucking generally will be even more important going forward as supply chains are increasingly near-shored and made more resilient. A coordinated recruiting effort should be paired with robust onboarding programs that offer free training and licensing programs to new hires. The trucking industry should work closely with government agencies and regulators to develop a successful onboarding program and offer incentives that reward driver retention.

Government Involvement

Congress and the administration have taken unprecedented steps to ensure the American economy is able to recover from this pandemic and emerge stronger in the months ahead. Through initiatives like the Main Street Lending Program and the Paycheck Protection Program (PPP), the federal government has stepped up to ensure small- and medium-sized businesses – the trucking industry’s customer base – have the liquidity and workforces they need to weather this storm. A second wave of PPP funding has already passed Congress, and additional assistance may be needed as the situation progresses.

Further, additional government funding for infrastructure, particularly surface transportation, should be a top priority. As the Highway Trust Fund marches toward insolvency, underfunded roads and bridges continue to deteriorate and the supply lines truckers use to transport goods become less reliable and safe. An infrastructure spending package would serve the dual purpose of guaranteeing work for the construction industry during an economic downturn and investing in the continued resiliency of the transportation sector.

Stable and predictable trade policy is also a key ingredient to trucking’s continued success. The U.S.-Mexico-Canada Agreement (USMCA), slated to take effect July 1, will modernize trade relations between North American neighbors and will boost U.S. exports and gross domestic product. Easing of tensions between the United States and China, signaled by the signing of the Phase 1 trade deal, brought an end to 18 months of tensions. It also provides supply-chain certainty: China pledged to increase U.S. imports by $200 billion, including up to $50 billion in agricultural goods for two years. At the heart of each of these agreements is the U.S. trucking industry, which will make these exports possible. Leveraging the trucking industry’s powerful position in future trade agreements will be crucial to ensuring the interests of truckers are protected.

The Road Ahead

The current environment offers the trucking industry an opportunity to correct misperceptions and redefine itself. Trucking is at the heart of the success of American business. If the industry is able to position itself as forward-looking and investing in the innovative solutions that will build even greater resilience and safeguard national security, it will continue to drive the American economy forward and out of this crisis.

As states and businesses begin to resume operations, there will be many roadblocks to which the trucking industry will need to adjust and adapt. Truckers, the overall industry, and regulators must communicate how the industry serves as a critical link within the interstate commerce supply chain. As supply chains continue to be reorganized to meet supply and demand shifts coming out of this pandemic, this role will become even more critical and will likely receive increased attention from government and media alike.

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