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Semi-Truck

Largest truck show on Earth

By Dean Croke

The first truck show of the 2022 season is this week, and as usual, truckers can look forward to experiencing all four seasons in one week as we transition from Winter to Spring. It won’t be surprising for truckers to be prepping their show trucks at the Mid-America Trucking Show (MATS) this week in the rain, snow, sleet and hopefully sunshine. 

This year also marks the 50th Anniversary of MATS, offering three days full of exhibits, education, entertainment and networking – all at the largest annual trucking event in the world. In honor of MATS founder Paul K. Young, who founded the event in 1972, the PKY Truck Beauty Championship is held in conjunction with MATS. This elite competition hosts some of the best custom show trucks in North America, complete with a light show, awards ceremony, close-of-show parade and several exclusive competitor events. 

This week, DAT goes behind the scenes to look at what it takes to show a truck at MATS.

Do judges really wear white gloves during judging?

In addition to one million square feet of exhibition space, over 1,000 exhibitors, more than 72,000 attendees, including 18,000 owner-operators, there will be a few hundred glistening big rigs lined up outside the main pavilion. Some will be pure show trucks that no longer haul freight, but others will be working show trucks also vying for the top award.

Judging categories range from “Limited Mileage Class” to “Working Dump-Straight Truck” to “Working Interior Cab Only.” Still, regardless of the category, every entrant will have already spent thousands of dollars and many weeks getting their big rig ready. The truck operator who has a non-working show truck will have their truck in the shop weeks in advance, getting all the winter grime removed, but it’s a very different event for the working show truck.

After a winter of hauling freight and a buildup of salt and grime, truckers face an enormous task in getting their big rigs in show condition. Most trucks will go into the shop at least a week in advance and spend on average four days at the very minimum getting buffed, polished and waxed. Because it will almost certainly rain on the way to the event, drivers will have to do it all over again before judging starts on Thursday, March 24 at 9 am. Luckily the “Prep Lot,” a dedicated staging area outside the main pavilion that includes a truck wash, opens on Sunday, March 20, giving contestants three to four days to prepare. 

Unlike most truck shows, MATS is a judged event, and it won’t be uncommon to see drivers under their trucks in the Prep Lot cleaning the underside of chassis rails or even jacking up each wheel so they can dig rocks out of tire treads with a screwdriver. And yes, judges have been known to wear white gloves to ensure every spec of dust has been removed.

Rookie mistakes – yes, even professional drivers make them.

DAT Freight & Analytics spoke to Mike Gaffin, or The Boston Trucker as he’s known to his 26,000 YouTube and 65,000 Instagram followers, about what it takes to work 60 hours each week and still keep a working truck in showroom condition. 

“I keep my W900 Kenworth spotless and wash it every day because it’s my livelihood, plus I take pride in what I do and spend 3-4 hours cleaning it weekly,” according to Mike, a 33-year trucking veteran. “I have a reputation for having a clean truck and can’t be caught riding dirty.” 

Mike was a first-time attendee at MATS a few years ago with a 379 Peterbilt and had some advice for those new to MATS. 

“The hardest part is getting the frame and the fifth wheel clean,” he explained. “Everything else is easy, and at my first show, I rolled in with a greasy fifth wheel and dirty frame and lost judging points immediately.”

Rags down…the big moment arrives.

Once judging begins, competitors will hear “rags down” over the public address system, which means drivers can’t touch their trucks after they’ve been parked in the designated area aligned with the judging category each truck has been entered. The PKY Truck Beauty Championship is located in the J Lot, directly behind the West Wing and Pavilion, where you’ll be able to meet with drivers as they wait for judges to interview them and inspect their trucks.  

The stakes are high, as are the bragging rights.

Once all custom trucks have been judged, it’s time to celebrate these works of art and crown the winners. All attendees will be invited to the Awards Ceremony at 10 am on Saturday, March 26, where the winners of each class will be announced, along with Best of Show, People’s Choice and other awards. 

For some, it’s recognition of all the hard work and dedication to the profession, it’s just for fun and bragging rights, but for others, it’s a way to use awards and their prize-winning show truck for marketing their product and services. Either way, the stakes are high.

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used commercial truck

Used truck prices ended 2021 at the highest level in the modern era

By Dean Croke

Last year was definitely one for the record books. Class 8 retail prices reached the highest level in the last seven years – so far. In the 2021, late model 3 to 5-year-old trucks brought 40.7% more than in 2020, and 21.4% more than in 2019, according Chris Visser at J.D. Power.

Trucks with warranty in the 3-year-old category – a favorite of new owner-operators entering the industry for the first time – brought 96.3% more money year-over-year at auction and 40.7% more at retail. The average price for 2018 year-model trucks sold at auction in December was $95,854, which was 3.3% lower than November but is still just over double auction prices a year ago.

J.D. Power reported higher auction volumes in December were driven by surprisingly strong new truck deliveries, as “companies taking delivery of long-awaited new trucks were probably eager to offload their older inventory.”

Around 280 used trucks were sold at auction in December, which is 44% lower than in December 2020 and 74% lower than the record-high 1,054 trucks auctioned off in June 2020, as the fallout from the pandemic rippled through the truckload sector. December’s auction results did catch some by surprise following the 16% month-over-month drop in the price of 4-year-old used trucks.

A sign that the market is turning?

The average price sold at auction in December was $73,305, which was $13,766 lower than November.

“We don’t consider December’s overall results evidence of a market shift, but we do consider the new truck delivery figure a surprise,” according to Visser.

Wards Intelligence reported 24,717 new Class 8 trucks were delivered in December, which was 38% higher than the 2021 average and the highest-volume month since September 2019. U.S. medium- and heavy-duty trucks finished the year 12.7% ahead of 2020, with only three months of negative sales, withstanding the challenges brought by the ongoing pandemic according to Wards Intelligence.

What’s 2022 have in store for used truck buyers?

Unprecedented freight demand plus manufacturing constraints on the supply side have created a once-in-a-lifetime scenario where carriers can’t add sufficient capacity even if they wanted to. Equipment manufacturers are in the same position – they can’t meet demand for new orders due to labor shortages and lack of parts availability.

“Most analysts predict the status quo through at least the first half of the year,” explained Visser. “Later in 2022, a relaxation of parts shortages and a return towards more typical economic activity could place downward pressure on used truck pricing.”

Strong freight rates hold the key, and while they’re at record-high levels, the used truck market should continue to absorb most of the available inventory, maintaining auction and retail prices at current levels.

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Infrastructure Bill Trucking

Increased holiday travel underscores deteriorating infrastructure

By Dean Croke

Last week, truckload dispatchers across the country were busy routing drivers home after shortening their radius of operation to keep them closer to home base. This week they’re doing the opposite. 

This period is regarded as one of the more challenging times of the year for carriers. It can be even more stressful for drivers anxious to spend time with family and friends, especially when freight demand is so high.

Earlier this month, the American Automobile Association (AAA) predicted highways will be jam-packed this year with an estimated 6.4 million more people traveling over Thanksgiving. This is up 13% compared to 2020. 

The recent opening of the U.S. borders to fully vaccinated international travelers and higher vaccination rates created a sense of normalcy this Thanksgiving, which means truckers are seeing roads busier than usual. AAA estimated 53.4 million people traveled last week, which brought travel volumes within 5% of 2019’s pre-pandemic levels.

Travelers will also be driving on an Interstate Highway System that turned 65 years old — and showing its age — in June. The recent signing of the $1 trillion Infrastructure Deal by President Biden includes $110 billion to repair the nation’s highway, bridges and roads. 

Almost $40 billion will be allocated to repair, retrofit, and replace bridges alone. Structurally deficient and rough bridges have long been the bane of truckers making this investment welcome news. It’s also the largest investment in bridge infrastructure since the highway system was built. 

The 2021 Infrastructure Report Card from the American Society of Civil Engineers (ASCE) gives our nation’s infrastructure a C minus. This makes it the first grade higher than the D range since the survey began in 1988. 

According to the reported 618,000 bridges across the United States, 42% of all bridges are at least 50 years old. Also, 46,154 (or 7.5%) bridges are considered structurally deficient. That’s 6,000 miles worth of structurally deficient bridges.

A “structurally deficient“ bridge doesn’t mean the bridge currently poses a risk to safety or is likely to collapse. However, it does have cracks, damage, wear, or other problems that can lead to failure in the future if those issues aren’t resolved. 

The report also estimated over 40% of America’s roads are now in poor or mediocre condition. 

What does this mean for motor carriers?

Improving road conditions will benefit flatbed and specialized carriers the most. Unlike dry van and reefer loads, which are hauled in enclosed trailers where the trailer walls act as load securement, flatbed loads tend to be far more specialized. These loads need to be physically secured to the trailer using heavy-duty straps and/or chains. 

This makes flatbed loads more vulnerable to rough roads and bridges. Bridges often have a significant height gap between the blacktop and bridge surface, creating vertical acceleration as a truck enters and exits a bridgespan. Not only does this road-to-bridge transition add more wear and tear to heavy vehicles and drivers, it creates significant stress on the load and road. 

Which bridges should truckers be on the lookout for?

West Virginia has the most structurally deficient bridges, with 1,545 (or 21%) bridges being in poor condition and requiring monitoring. The state’s most frequently used structurally deficient bridge is on I-64 West in Charleston, WV where it crosses over the Kanawha Turnpike with 86,494 daily crossings. This bridge was built in 1974. 

The most travelled structurally deficient bridge in the nation is California’s Kester Avenue overpass on the Ventura Highway in Sherman Oaks. This bridge was built in 1959. According to BridgeReports.com, it was last inspected in March 2018 and is considered in poor condition.

What should truckers expect in 2022?

More construction delays from roadworks and bridge construction is a given. But on the positive side, the new Infrastructure Deal means more jobs and much more freight to haul. 

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commercial truck driver

8 Ways Carriers Can Find the Best Loads Fast

By Ben Robbins

Axele TMS and DAT recently partnered for a webinar to show how carriers can use our combined tools to find the best loads fast. If you missed it, you can watch the recording here and access the slides here.

Below is an overview of the webinar, with strategies and tactics you can put to use in your carrier business.

Biggest keys to success

One recurring theme from the webinar was exploring ways to use Axele and DAT to leverage both sides of the DAT Load Board network.

  1. Advertise Yourself – Post your trucks and let brokers call you.
  2. Search Available Loads – There are three ways to search:
    1. Smart Search
    2. Active Search
    3. LaneMakers
  3. Set Alarms – Use alarms to notify you when new loads are posted that match your needs. Alarms will notify you in any of the DAT Load Board products. 
  4. Subscribe to Trendlines – Get weekly updates on the national average rates plus supply and demand information for each major trailer types (van, reefer and flatbed)
  5. Monitor Market Conditions – Market Conditions map provides a real-time heat index to see where your trucks are in highest demand and where you can get the best rates.
  6. Plan Your Trip – With routing tools such as TriHaul, you can get automatic suggestions for triangular routes based on the loads you’re searching. These routes can help boost your rate per mile and avoid lower-paying lanes.
  7. Find new business partners – The DAT Directory within the load board allows you to research who you’re considering doing business with first, with, address, phone number, DOT number, company reviews and more..
  8. Negotiate Rates – With these DAT tools at your fingertips, you have all the information to negotiate the best, most profitable rates for success.

You got the load — what’s next?

This is where the DAT / Axele partnership really adds benefits, letting you run your business like a well-oiled machine.

Axele TMS helps you manage loads, dispatch trucks, manage settlements and more. Once you get the load and enter the details into your Excel sheet, Google doc or send a rate confirmation text, Axele gives you the ability to drag and drop your rate confirmation and auto-populate the load data. You can then assign a driver or you can see the dispatch system in a Gantt chart. Axele also offers both an internal and external share links to load tracking, reducing the check calls and giving visibility into more accurate load arrival ETAs.

Axele also gives you greater insight into the revenue for each load, pulling in all the load information with Axele’s integration into DAT and applying all costs to show the profit per load. 

This process can be time consuming, but Axele has automated it. You can invoice right away in near real-time, helping cash flow. Driver settlements are flexible and can be set up to pay a flat fee, per mile, percentage of topline revenue, etc. It calculates everything for you, making it easy to know how much to pay. Axele also provides robust reports, tracking in and out times, loaded miles, empty miles and detention times in an executive dashboard view to watch your weekly performance closely. They make it easy to upload documents and provide an easy to search document repository to find documents you need to access quickly. 

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semi trucks

Truck shortage drives growers nuts

By Dean Croke

Each state has crops that dominate annual production and generate thousands of truckloads of freight, but few do so to such an extent as peanuts and almonds.

All of the commercial almonds in North America are grown in California, which also account for 80% of commercial almonds around the world. Peanuts are the official state crop of Georgia, which produces almost 50% of the total U.S. peanut crop. Both states lead the nation in their respective almond and peanut exports.

That’s also an enormous amount of freight for truckers to haul — both short and long-haul.

West Coast’s almond harvest requires more than 150,000 truckloads

California almond orchards are expected to produce 3.2 billion pounds of nuts this year. This is up 3% from last year’s 3.12 billion-pound crop, which was worth an estimated $6.5 billion.

The majority of the almond crop is grown in California’s Central Valley, which includes the Fresno freight market in the south and the Stockton market in the north. This makes for a short trip to Los Angeles, where most export containers are loaded.

“Local drayage carriers take loaded 20-foot or 40-foot dry containers to the port each day and bring an empty one back to be loaded,” says Jonathan Meyer, CEO of Treehouse Almonds.

Based on the 2020 crop tonnage, approximately 70% of almond production — or the equivalent just under 1,000 40-foot export containers per week — are hauled by drayage carriers for export. The almond export market involves port destinations to over 90 countries with India being the top export market.

The almond freight task is larger than one might expect. First, 80,000-pound short-haul loads (in double combination hopper trailers) of freshly harvested almonds are shipped from the orchard to the huller or sheller facility. Once the almonds are shelled, they’re shipped again to the handler for sizing, processing, storage and shipping.

Both steps combine for 150,000 truckloads — and that’s before export or domestic loads are hauled. Domestic loads within the U.S. average just over 21,000 loads each year, which makes a combined total of approximately 141,000 truckloads of almonds annually.

Peanuts required about 263,000 truckloads in 2020

Georgia accounted for 3.28 billion pounds of peanuts in 2020, and Alabama came in second at 637 million pounds.

While Georgia is known as the leading producer of peanuts, approximately half of the peanuts produced in the United States are grown within a 100-mile radius of Dothan, AL. In terms of national production, the vast majority of peanuts are grown in the Southeast Region (Georgia, Florida, Alabama and Mississippi). This region produces approximately 65% of all U.S.-grown peanuts.

Globally, the U.S. was the fourth largest producer last year at 6.134 billion pounds with exports accounting for 25-30% of production.

Once harvested, the peanut crop is shipped in dump trucks to the shelling plant. It’s then processed and packed for shipment a second time to consumer markets and other peanut-based manufacturers (peanut butter, peanut oil, candy, etc.).

Based on the 2020 crop production of 6.134 billion pounds, the freight task involves the equivalent of 123,000 truckloads of bulk peanuts from farm to sheller. And then another estimated 140,000 truckloads are needed to ship to domestic retail consumer markets, intermediate manufacturers or export markets via ports.

That makes an estimated total of 260,000 truckloads of peanuts before we even get to the shipping stage for products like peanut butter, which accounts for around half of all edible peanuts produced in the U.S.

Tighter capacity and higher spot rates

Like all freight types, both almond and peanut shipping right now is impacted by tight capacity, mostly in the longer-haul truckload market.

“The current shortage of trucks is driving us nuts,” a grower told DAT.

In the Southeast Region, DAT dry van spot rates have been steadily climbing for the last four weeks to reach an average of $2.72/mile to all destinations this week. Southern Georgia, the heart of peanut country, is seeing even higher rates.

Using Douglas, GA as the center of peanut production, spot rates to Orlando are currently averaging $4.17/mile. This is up $1.05/mile since February after averaging $3.30/mile for the second half of last year.

On the West Coast in the Fresno market, capacity is tight for long-haul almond shippers. Dry van outbound spot rates are averaging $2.78/mile. On the 922-mile run to Seattle, spot rates are currently $4.01/mile after increasing $1.29/mile since the start of this year.

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Commercial Truck Freeway

New infrastructure plan may boost flatbed market

By Dean Croke

Flatbed and specialized carriers stand to gain the most from the Biden Administration’s new infrastructure plan with all of the steel and concrete products required to fix the nations’ bridges.

The American Road & Transportation Builders Association notes that more than one-third, or 220,000 (36%), of the nation’s 618,000 bridges need structural repair, rehabilitation work, or replacement.

This number includes the 45,023 structurally deficient bridges, which average 68 years old. Compare this to the average 32 years for bridges in good condition. The busiest structurally deficient bridge is on U.S. Route 101 over Kester Avenue in Los Angeles. It was built in 1959 and sees 289,000 daily travelers. The second is also in Los Angeles – Interstate 5 over Marietta Street, which was built in 1948.

Unlike dry van and reefer loads in enclosed trailers where the trailer walls act as load securement, flatbed loads need to be physically secured by straps or chains. This makes flatbed loads more vulnerable to rough roads and bridges.

This is especially true when bridges have significant height gaps between the blacktop and bridge surface, creating turbulent entrances and exits. Not only does this road to bridge transition add more wear and tear to heavy vehicles and drivers, it creates significant stress on the load itself and adds more cost to the flatbed sector.

Flatbed rates in the Top 10 markets remained flat last week at an average of $3.46/mile. Outbound load post volumes dropped by 3%.

But as has been the case for many weeks, there has been substantial volatility in some markets in the South Region. In Mobile, volumes were down 6% last week while spot rates surged increasing by $0.44/mile to $3.42/mile. In contrast, nearby Little Rock volumes were down by just over 1% and rates were up $0.20/mile to $3.58/mile.

Spot rates

Capacity continues to tighten in the flatbed sector with spot rates increasing another $0.07/mile last week to reach $2.74/mile. Flatbed rates are now $1.01/mile higher than the same week last year and $0.28/mile higher than the same time in 2018.

How to interpret the rate forecast:

  1. Ratecast: DAT’s core forecasting model
  2. Short Term Scenario: Formerly the pessimistic model that focuses on a more near-term historical dataset
  3. Blended Scenario: More heavily weighted towards the longer-term models
  4. Blended Scenario v2: More heavily weighted towards the shorter-term models

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Commercial Truck Driver

Is now a good time to buy a truck?

By Dean Croke

We get asked this question the most in our DAT iQ Weekly Update: Is now a good time to buy a truck?

Based on recent industry cycles, the answer is probably “no.”

“Orders follow price” is a common theme in trucking. When rates surged in early 2018 during what was then the tightest period of truckload capacity in a decade, asset-based carriers placed record numbers of orders for new trucks and trailers in the latter half of the year. When capacity loosened in 2019, we saw record numbers of trucking bankruptcies.

These recent boom-and-bust freight cycles are important to analyze before investing in new equipment.

What went up came down

Total Class 8 truck orders for 2018 broke a 14-year record, according to ACT Research. Orders totaled 490,100 units, far outstripping the previous record of 390,000 units set in 2004. By the time all of those new trucks and trailers hit the road in 2019, demand declined, resulting in extra capacity that drove dry van spot rates down 26%. The national average went from a high of $2.05/mile (excluding fuel) in June 2018 to just $1.50/mile 10 months later.

Used truck prices crashed also. During 2019, the average retail selling price of 3 to 5-year-old sleeper tractors decreased 30%. The volume of the three most common sleeper tractors (3 to 7 years old) sold through the two largest no-reserve, nationwide auctions increased by 36%, according to J.D. Power Valuation Services.

Fast forward to late 2020, truckload rates once again hit record levels, and carriers repeated the 2018 buying spree. Truck orders totaled 142,093 in Q4, the second-highest total in history. This accounted for 51% of the total orders placed in 2020, according to ACT Research.

Will history repeat?

At the moment, spot rates are $0.71/mile higher than in 2020 and $0.53/mile higher than 2018. Capacity is the tightest it’s ever been, according to the Michigan State For-Hire Truckload Capacity Tightness Index. The driver shortage appears real this time around, and spot market volumes are almost double where they were this time last year. Now is as a good a time to buy a truck as any, right?

There are many caveats. While spot volumes surge, total freight volumes in February were up only around 3% year over year. We still have a bifurcated market where there are winners and losers in the ongoing economic recovery – not all shipper volumes are rising at the same pace. Jason Miller, supply chain economist and associate professor at Michigan State University, recently noted that in Q4 2020, dry van general freight was up 2.2% year over year, whereas specialized flatbed and bulk freight was down 4%.

Operating costs and cash flow

On the cost side of the equation, diesel prices are on the rise at $3.19/gallon, 46 cents higher than the same week in 2020. A small carrier running around 100,000 loaded miles and 10,000 empty miles per year would’ve been losing 3 cents per mile in March 2020, with line haul rates averaging $1.59/mile and diesel costing $2.73/gallon.

This year, with line haul rates at record levels around $2.40/mile, that same carrier would be making 65 cents per mile in gross profit before taxes and depreciation. These higher spot rates are generating just over $80,000 in additional top-line revenue for carriers compared to the same time in 2020, which largely explains why the recent hike in fuel prices is not causing as much alarm as it normally does.

The truck orders placed in late 2020 will eventually add significant amounts of capacity to the marketplace, taking pressure off of truckload rates. When that occurs, the higher fuel costs will be much more painful for carriers.

Now is a good time to put some cash aside for that inevitable rainy day. It’s also a great time to fully understand your operating costs and how to manage cash flow.

Recently we addressed the most frequent question asked on our weekly DAT iQ Live series: Is now a good time to buy a truck? This week, we asked a leading industry expert will weigh in with insights.

Todd Amen is President and Founder of American Truck Business Services and former Co-President and owner of Trans-Western Express. ATBS specializes in helping owner-operators manage their financial and compliance affairs through their Rumblestrip suite of products, which handles the “business of driving.” ATBS clients also produce the Independent Contractor Benchmarking (ICB) yearly report, which Todd shared on the recent Truckloads Carriers Association webinar.

By the numbers

According to Todd, “2020 was like a full truck economic cycle that takes four or five years, but happened in the space of just one year.” ATBS clients ended 2020 averaging 104,000 miles for the year, an increase of 3.2% year over year. All equipment types averaged $1.46/mile, excluding fuel surcharges, which was a 5.7% decrease – the equivalent of $0.09/mile lower.

One major trend in 2020 was the shift from owner-operators being 100% leased onto another fleet to running on their own authority as independent contractors (IC). ATBS calculates the costs of being an IC adds $0.48/mile (IFTA, permits, licenses, insurance, trailer and load fees) in expenses. In June 2020, spot rates took off, increasing by close to a $1.00/mile over a 6-month period. The average rate per mile for leased owner-operators in 2020 was $1.50/mile, but with spot rates averaging $2.11/mile in the second half of the year, many carriers decided to go independent.

With rates still up around $2.36/mile excl. FSC as we end the first quarter of 2021, the incentive to become an IC and/or remain one is high – as are the profits. In 2020, ATBS clients earned an average net income of close to $68,000 representing an 8% increase over the previous year.

Know what you’re getting into

One more time back to the original question. Yes, it’s a great time to buy a truck. It always is – provided you know what you’re doing, fully understand the business side of running a trucking business and have good partners to support you along the way.

Lastly, consider the advice from Todd Amen, who looks after the business affairs for more than 20,000 O/O’s: “Good times don’t last but people that manage for the downside do.”

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Commercial Truck Driver

Stimulus bill for carriers, brokers, owner-operators?

By Pat Pitz

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) includes $2 trillion in economic stimulus funds. Included in the relief package is funding for state and local governments and industries hit hard by COVID-19, such as hospitals and airlines. But what’s in it for carriers, brokers and owner-operators?

Below are highlights of the stimulus package, which includes relief for both businesses and individuals.

Help for businesses

Several trucking trade associations have sent out messages to their members this week encouraging them to take advantage of federal aid programs for businesses. Here are some of them:

Paycheck Protection Program – The PPP enables small businesses (fewer than 500 employees) to apply for $349 billion in forgivable loans. Businesses are eligible to borrow 250% of their average payroll expenses, up to $10 million, for meeting payroll, rent, mortgage interest or utility payments. Loan amounts will be forgiven if the company maintains payroll for 8 weeks after the loan is made and at least 75% of the forgiven amount is used for payroll. Loans are processed by Small Business Association lenders.

“I encourage you to inquire with your local bank or financial institution about applying for this great stimulus loan program,” said Robert Voltmann, president and CEO of the Transportation Intermediaries Association (TIA), in an email to its members.

The Owner-Operator Independent Drivers Association (OOIDA) is encouraging its members to reach out to banks they’ve worked with in the past to see if they are participating in the program. They note that small businesses and sole proprietorships can apply today, while independent contractors and self-employed individuals can begin applying on April 10. (Independent contractors and owner-operators may also be eligible for unemployment. See below.)

“The PPP program is first-come, first-served, so please apply as soon as possible,” OOIDA said in its email to members.

The U.S. Treasury Department has put together a Fact Sheet with questions and answers about the PPP.

Economic Injury Disaster Loan – This loan advance will provide up to $10,000 of economic relief to businesses that are experiencing temporary difficulties. Funds will be made available within days of a successful application, and the money will not have to be repaid. This program is for companies with fewer than 500 employees, including sole proprietorships, independent contractors and people who are self-employed. Learn more.

SBA Express Bridge Loans – These loans enable small businesses who currently have a relationship with an Small Business Administration Express Lender to access up to $25,000 quickly. Learn more.

Help for individuals

Many employees have already lost their jobs due to shutdowns brought about by the coronavirus. In March, millions of people applied for unemployment benefits. There’s aid in the stimulus bill for those individuals and other Americans who are still working.

Enhanced unemployment benefits – The stimulus provides an extra $600 per week for four months on top of normal unemployment benefits, which vary by state. It also extends the unemployment benefits for an additional 13 weeks.

Economic impact payments to individuals – A key element of the CARES Act is direct payments to individuals. For taxpayers with an adjusted gross income of up to $75,000 per year (up to $150,000 for married couples filing joint returns) the stimulus provides $1,200 to individual taxpayers and $2,400 to couples. There’s also an additional $500 for each child age 16 and younger. That means a family of 4 would receive $3,400. Taxpayers with adjusted gross incomes between $75,000 and $99,000 ($150,00-$198,000 for couples) are still eligible, but will receive lesser amounts.

If you’ve filed your taxes for 2019 or 2018 and provided the IRS with your bank account, the funds will be automatically deposited into that same account. If the IRS does not have your direct deposit information, visit the IRS’s Get My Payment web page.

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Commercial Trucker

Being a trucker during a pandemic

By Brita Nowak

Owner-operator, Brita Nowak, shares her perspective on COVID-19’s impact on over the road truckers.

All of a sudden we, the truck drivers, were hailed as heroes. 

People started waving at us, thanking us, and we enjoyed traffic-free driving through what were usually gridlocked cities. Everyday life changed, sometimes eerily so, and we adapted.

From one day to the next, we were no longer required on the docks, and warehouses were able to load and unload our freight without our supervision. Emailing our PODs became the norm, which in my opinion, is a part of trucking that has finally progressed to how it should be. 

When calling freight brokers, hearing babies and dogs in the background became normal, and I stopped bothering with lipstick because I just covered it with fashionable masks. 

But there was the hunt for food. The very people who supplied the nation with food werenʼt able to find it themselves. Drive-thru only? Well, that doesn’t quite work if you’re driving a big rig. Truck stops stopped serving the self-serve “roller grill” items entirely. 

I somehow felt both appreciated and completely unappreciated at the same time. 

My stainless steel coffee cup couldn’t be refilled, but a new disposable cup could, despite the fact required people touching the dispenser. Desperation created innovation on my part and, while my RoadPro lunchbox didn’t get much use, I found workarounds, like using my own kettle and French press that helped prevent the need to wait in long lines to get coffee. 

The thing I heard over and over from my trucker colleagues was that they stayed away from home out of fear that they might bring back COVID-19 from some random encounter at a distant place they were a week ago.

But then finally, freight rates went up! That made staying away from home more bearable, as I supported family members who are now no longer working. However, months into the pandemic, truck drivers were no longer enjoying the amazing treatment we initially experienced. 

It was sweet and brief. We are back to being cut off while on the road, yelled and eye-rolled at, by the motoring public. ELD exemptions were lifted.

As we look forward to the new year, and better times, I am hopeful that some of the good things that have come out of having a greater awareness of the role truck drivers play will stay beyond COVID-19. 
 

Brita Nowak worked as an actress in Hollywood before starting her trucking career. Now she owns her own trucking company, BratCat Express. Check out BratCat Express at www.bratcatexpress.com and on Instagram at brita.nowak. 

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Commercial Truck Insurance

RFP season arrives amid uncertainty

By Mark Montague

Uncertainty abounds as we begin to look forward to the New Year. Election clarity and virus/vaccine issues aside, a key concern for freight management specialists is the cost of transportation in 2021.

As we have seen in 2020, freight patterns and rate levels can shift suddenly, so it pays to have a strong awareness of factors that can affect the marketplace when bidding on future freight.

Bid on RFPs with confidence using the pricing and forecasting tools in RateView from DAT iQ.

Current state of the freight marketplace

Strong. Since May, demand continues has exceeded supply, leading to record high spot market rates. Contract rates followed but spot rates continue to run ahead. In fact, starting in August, spot rates nationwide rose above the national contract level. We have only seen that happen a few times in past periods like the polar vortex in the winter of 2013-14 and ELD mandate build-up in late 2017 through 2018.

The overall economy continues to improve, albeit slowly. Certain sectors have been left behind, but sustained rises in activity elsewhere show no signs of slowing, even without a new stimulus bill.

Will there be a recession?

Probably not. Maybe. Ten million workers having lost employment continues to be a drag on the economy, especially as stimulus money dries up, but it’s hard to reconcile the current state of the freight marketplace with a recession. Still, another lockdown could put a hard stop on economic activity, then the restart could cause the whole cycle to repeat.

The last major rebound was in 2017, driven by the rapid expansion of oil and natural gas activity. That all began to cool in 2018, as energy production got ahead of demand. Then followed the worldwide drop in energy consumption in early 2020, causing the price of oil to plummet and leading to a near shutdown of US oil fields. Out of more than 1,000 drilling rigs in operation nationwide at the start of the year, the US fell below 250 rigs in operation. That’s recovered to 312 rigs in operation as of mid-November, even as diesel and gas prices remain low. While prices have remained low, keeping diesel and gas prices down, oil & gas well activity has begun to rise in recent months.

Industrial production continues to rise in the US. Internationally, both imports and exports are sharply higher in recent months. In part, new trade deals with Mexico and Canada (USMCA) and a cessation of trade disputes with China have helped provide more sustainability. Inventory positions remain low for customers and the rapid roll-out of vaccines in the first six months could add further pressure to supply chains.

Find loads and trucks on the largest on-demand freight marketplace in North America.

What’s driving the economy

Low interest rates are likely here for at least the next two years. This keeps the cost of borrowing down, keeps housing mortgage rates low and generally provides stimulus across a wide spectrum of the economy. Fortunately, inflation remains in check overall, despite some sharp price rises for some key materials like lumber.

Strategic pricing

Some shippers exploited the sharp drop in demand in the spring to enforce much lower rates. Key lanes like Los Angeles to Chicago nearly dried-up, hitting low points for the deregulated era, 1980 to now. The resulting sharp rebound caught many by surprise and continues to strain shipper budgets.

For carriers, this RFP season looks primed for strong, profitable contract rates. Carriers can trade some short-term profits for a guarantee of stability. Conversely, shippers and carriers could agree that the situation is fluid and create more flexible pricing arrangements, such as 3-month reviews.

A couple of things have changed in 2020 that shippers, carriers and brokers will also have to consider. First, driver mobility has been reduced. It’s not as easy to relocate, let alone find, truck drivers from overseas because of various restrictions. Many older drivers may have exited the workforce, and it’s likely that the increased use of hair follicle testing has tightened driver supply.

If the various vaccines under development prove effective, that is an additional source of economic expansion as the hospitality industry comes back. My thought is that there is a lot of pent-up demand for travel and other experiences outside the home. For this reason, I think the first six months of 2021 will be solid from a carrier pricing standpoint.

The downside is that there is a danger that we can’t quite get the coronavirus under control to fully reopen the economy.  Certainly no one wants that scenario. If the stock market is any gauge, it’s betting strongly that we will avoid the worst case. Politically, almost everyone can agree that we aren’t in an ideal situation, for various reasons.

Tactical pricing

Understanding and responding to changes in the spot market with nimble moves can be another way to get rewarded. DAT iQ tools now contain forecasting elements that provide both a one week look ahead as well as longer term projections. As an analyst using the DAT datasets, I could often get ahead of developing market changes. And with the addition of the new 3-day averages, you can get the closest to real-time view available on the most volatile lanes in the country.

Surveys of a number of small-to-medium size fleets find that locking up all capacity into contracts may not provide the best return on investment. It’s been harder in the past year to place trucks in the right market at the right time. In years past as a dispatcher trying to service contract customers, I found many instances of having to deadhead a truck many miles to meet the needs of the shipper. An optimal mix of freight may be 70% contract and 30% spot or 80/20 rather than 90/10.  Some major carriers used to strive for 95% contract and 5% spot, and they are seeing the value of having a few more trucks free of contract obligations on the spot market.

As long as we continue to see disruptive elements in the freight marketplace, this more recent trend should remain true.  Stability would be great but it looks elusive.

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