Economic Relief for America’s Trucking Companies

This is a petition to the United States Congress, Senate, and President Trump to provide urgently needed economic relief to America’s trucking companies

This is a petition to the United States Congress, Senate, and President Trump to provide urgently needed economic relief to America’s trucking companies, aid which is critical to both combatting the immediate impact of COVID-19 and to ensuring that our economy can rapidly recover once America is ready to get back to work. In the next legislative vehicle relating to COVID-19, the Federal Government must address the unique needs of this essential industry by providing forgivable loans that target the two major fixed costs that trucking companies face — truck and trailer lease/loan payments and insurance costs. This aid is critical to protecting America’s trucking capacity and supply chains, today and into the future.

The Problem

In the early days of the crisis, freight volumes rose as grocery retailers restocked their shelves and other essential businesses built inventory to protect against supply chain disruption. However, as shelter in place orders have expanded to cover 42 of 50 states and 95% of the population, industrial production has contracted and freight volume has declined sharply.

The Data

With more than 250,000 for-hire trucks in our network, KeepTruckin has observed a 24% decline in vehicle utilization over the past 30 days.

The impact has not been evenly distributed. In the West Coast and Northeast, regions that enacted shelter-in-place first, we have seen a 38% and 31% decline in activity.

The reduction in freight volume is compounded by a steep decline in rates. Trucking companies are generating less revenue, while their fixed cost burden remains unchanged.

In a survey of trucking companies, two sources of fixed costs were identified as particularly high risk amid this crisis: truck and trailer lease/loan payments and insurance costs.

37% of trucking company leaders surveyed expressed serious concerns about their ability to meet one or both of these obligations in the next three months. The majority of those who indicated they were not concerned about the impact of COVID-19 own their trucks, and are either self-insured, or they participate in an insurance captive that has already taken action to reduce the burden for their members.

The Solution

While an important first step toward providing economic relief for American businesses, the Paycheck Protection Program under the CARES Act fails to address the needs of most trucking companies. As currently constructed, the PPP fails in two ways:

  1. Trucking companies carry a high fixed cost burden relative to other small businesses. A loan capped at 2.5 months of average payroll cost will not be sufficient to cover driver compensation, truck and trailer lease/loan payments and insurance costs.
  2. The PPP does not provide forgiveness for truck and trailer lease/loan repayment or insurance costs. Trucking companies that avail PPP loans to fund their fixed cost obligations will be saddled with debt they will not be able to repay.

Without targeted economic and regulatory relief, many trucking companies will default on their lease or loan payments and risk losing their trucks. And those who fail to cover their insurance payments will lose their DOT authority.

This is not an acceptable outcome. Preserving our nation's trucking capacity is critical to our economic recovery post COVID-19. It is essential that when industrial production rebounds, trucking capacity is not constrained. We cannot allow America’s trucking companies to fail or we jeopardize the broader recovery.

We ask the Federal Government to provide economic relief that addresses the unique circumstances that trucking companies face and recognizes the essential nature of their work. This includes basing federal loans on not just payroll, but also fixed cost obligations. And providing forgiveness for truck and trailer lease/loan payments, and insurance costs.

Please sign this petition if you share our belief that the trucking industry is essential to our economic recovery and that the Federal Government must act to ensure that trucking companies can weather this storm.

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