The Impending Impact of California's AB5 Law

Last year, Assembly Bill 5’s (AB5) passage was met with widespread outcry and derision, seeing as it threatened irreparable harm to a broad swath of Californian’s working as freelancers and independent contractors, including the drivers within the freight industry. In an effort to stop it, an opposition coalition has arisen, and there are already several lawsuits seeking to overturn the ill-conceived bill. 

But what does its passage mean for the freight industry, and what’re the chances it gets shot down? Below, we’ll discuss everything you need to know about AB5.      

The Impending Impact of California's AB5 Law

In a completely unsurprising yet lamentable move, California legislators recently enacted their latest misguided attempt to regulate economic markets with the passage of Assembly Bill 5 (AB5). This bill, pushed by democratic assemblywoman Lorena Gonzalez and signed into law by California Governor Gavin Newsome, sought to codify the divisive California Supreme Court Dynamex Decision—which reclassified “misclassified” workers within the state.

Although AB5 was originally directed at “gig economy,” namely rideshare services such as Lyft and Uber, it has led to a host of potentially unpleasant consequences to practically every industry within the state. As mentioned, this started with the Dynamex Decision, which was a labor interest battle wherein: 

“The state’s highest court adopted a new legal standard for determining whether workers should be classified as employees or as independent contractors for purposes of California wage orders. The court adopted the ‘ABC’ test—utilized by other jurisdictions—which makes it more difficult for businesses to classify workers as independent contractors as it presumptively considers all workers to be employees.”

Per the decision, employers would only be allowed to classify workers as independent contractors if it passed an ABC test: 

A. The worker is operating freely from control or direction of the employer.

B. The worker performs work that is outside the typical fare that the business entity hires for.

C. The worker is typically active as an independent trade, occupation or business that is similar to the work performed. 

If workers failed to satisfy ABC, they had to be treated as full-time employees, which meant they had to be protected under California’s wage laws and provided:

• Healthcare

• Minimum wage guarantees 

• Overtime pay

• Meals and rest breaks

AB5 and The Freight Industry

As you might imagine, this policy would be disastrous for the freight industry. AB5 would have a particularly deleterious impact on smaller fleets, which rely heavily upon drivers functioning as independent contractors in order to compete with larger freight companies. Transport Topics notes one of the primary issues with the ABC testing:

“Specific concern lies with the ‘B’ prong, which requires that to be an independent contractor, the person ‘performs work that is outside the usual course of the hiring entity’s business.’ Most owner-operators contract their work with trucking companies whose primary business is trucking. That means the contracted drivers are arguably performing work ‘in the usual course’ of that trucking company.”

Ironically, this bill will cause more harm to the very workers and small businesses its proponents claim it wishes to protect, since AB5 would prevent them from willingly engaging in a voluntary transaction of services. Much to democrats evident chagrin, the largest uproar has come from drivers and other gig workers. These long-time independent contractors have universally panned the bill, saying it would prevent them from being able to continue making a livelihood.  According to Supply Chain Dive:

“Many independent owner-operators have spoken out in the wake of AB5's passage to say they have no desire to work for a carrier full time, but rather want to maintain the status quo that allows them to work for multiple carriers and create their own schedules. Some protested the legislation in recent weeks, asking for an exemption.”

The bill’s nebulousness and potential legality has been put into question, since the freight industry requires drivers to regularly go across state lines. Naturally, that raises questions such as: would a driver who’s classified as an independent contractor in Nevada suddenly become an employee the moment they crossed state lines into California? 

AB5 is on Hold

Complications like the one mentioned above are exactly why the California Trucking Association has filed complaints with federal courts stating, 

“The ‘employment test’ in Assembly Bill 5 (AB5) violates the supremacy and commerce clauses in the United States Constitution… If AB5, which was signed into law by Gov. Gavin Newsom on Sept. 11, becomes law on Jan. 1 as scheduled, the ability of more than 70,000 truckers in California to provide services as independent owner-operators will be restricted.”

Fortunately, owner-operators can rest easy, at least for now, since the bill has been put on hold. Per Trucking Info, “U.S. District Judge Roger Benitez heard arguments under advisement but did not issue a decision. He has extended the temporary restraining order that was put in place Dec. 31, and it will be in effect until his ruling on the preliminary injunction. This could take days or a couple of weeks, according to a California Trucking Associations spokesperson.” 

Moving Forward

AB5 is yet another reason why California businesses are fleeing the business-hostile state in unseen droves. While we do not yet know the outcome, both legal analysts and scholars believe that there’s a good chance that Benitez—a Bush appointed judge—as well as Trump appointed judges will view California’s latest attempt to push its progressive policy as unconstitutional. They posit that AB5 raises real constitutional issues in light of the Commerce Clause and F4A. 

As of now, all we can do is wait and hope that the half-baked law is struck down or, at the very least, amended. That said, we at Trucking Proud will be sure to update you on any news that emerges in the coming days!

Sources

California Globe. CA Assemblywoman Lorena Gonzalez Taking Heat for Bill Killing Independent and Freelance Jobs. https://californiaglobe.com/section-2/ca-assemblywoman-lorena-gonzalez-taking-heat-for-bill-killing-independent-and-freelance-jobs/

JDSUPRA. One Year Later: Top Five Takeaways of the Dynamex Decision. https://www.jdsupra.com/legalnews/one-year-later-top-five-takeaways-of-55283/

Transport Topics. Perspective: What AB5 Means for California Trucking. https://www.ttnews.com/articles/perspective-what-ab-5-means-california-trucking

Supply Chain Dive. Judge extends restraining order temporarily exempting trucking from AB5. https://www.supplychaindive.com/news/judge-exempts-trucking-ab5/569674/

JOC. California Trucker Complaint Seeks to Overturn AB5. https://www.joc.com/port-news/us-ports/california-trucker-complaint-seeks-overturn-ab5_20191112.html

KFIAM640. It's Not Just People Leaving California These Days... Companies Are Too. https://kfiam640.iheart.com/content/2019-11-20-its-not-just-people-leaving-california-these-days-companies-are-too/

The EPA is Looking to Reduce Truck Pollution

On January 6, 2020, the Environmental Protection Agency (EPA), per the direction of the Trump administration, announced the rollout of its Cleaner Truck Initiative (CTI). This step towards stiffer restrictions and pollution controls is intended to reduce Nitrogen Oxide (NOx) emissions and to encourage freight companies to modernize their fleets.    

Naturally, the EPA’s initiative to reduce truck pollution will have consequences—both large and small—on the trucking industry. Below, we’ll discuss the Cleaner Truck Initiative and what it might mean for the trucking industry as a whole.  

The EPA is Looking to Reduce Truck Pollution 

In 2001, the EPA rolled out its initial standards on highway heavy-duty trucks and engines’ NOx and nitrogen dioxide emissions. These have been linked to asthma and lung disease and “designated by the U.S. Environmental Protection Agency (EPA) as one of the “criteria” pollutants under the Clean Air Act, meaning it may reasonably be anticipated to endanger public health or welfare.” 

• It required trucks to cut 95% of nitrogen dioxide emissions over the next decade. 

• This resulted in a 40% reduction in national nitrogen dioxide emissions. 

While this was a positive step in the right direction, it wasn’t enough. In 2018, the EPA started to strategize ways that they could continue their mission to reduce air pollution. They set their sights on heavy-duty, diesel trucks, the country’s largest producer of mobile pollution, notably NOx emissions. Thus, the CTI was born, and its launch was announced in November of that year. Per the EPA:

“We have an opportunity to modernize the requirements to better reflect the capability of available emissions control technologies. In particular, emissions standards have lowered overall NOx emissions from heavy-duty trucks, but have not focused on emission control under low-load conditions—when trucks are at idle, moving slowly, or in stop-and-go traffic.”

While there were rumors about what it might contain, we’re just now beginning to see some of the details of the program. On January 6, 2020, the EPA released its Advanced Notice of Proposed Rule which would contain, “plans for a new rulemaking that would establish new emission standards for oxides of nitrogen (NOx) and other pollutants for highway heavy-duty engines. It also describes opportunities to streamline and improve certification procedures to reduce costs for engine manufacturers.” That said, the rules haven’t yet been set in stone so much of it remains as pure speculation. 

What Will The CTI Mean For The Trucking Industry?

To the surprise of some, many leaders within the trucking industry support this movement. There is widespread consensus that this is a wise strategy that not only helps the environment but also preempts and undercuts California’s latest efforts to sacrifice business and economic growth at the altar of progressive regulation. So, rather than allow the state’s choking regulations to set the standard, this move allows the trucking industry to head them off at the legislative pass, as it were. According to the New York Times: 

“The [Trump] administration appears to be complying with the wishes of the trucking industry, which has called for a new national nitrogen dioxide regulation to override states that could otherwise implement their own, tighter rules. On that front, the E.P.A. rule is likely to open a new battle in Mr. Trump’s long-running war with California over environmental regulations and states’ rights. California is already moving ahead with stringent state-level standards on nitrogen dioxide pollution from trucks that could be replicated by other states.”

Along these lines, the Truck and Engine Manufacturers Association (EMA) signaled their support for the initiative. This sentiment was echoed by EPA Administrator Andrew Wheeler: “The Trucking industry touches nearly every part of our economy. A strong and resilient trucking industry is imperative to maintaining a strong and resilient economy. Through this initiative, we will modernize heavy-duty truck engines, improving their efficiency and reducing their emissions, which will lead to a healthier environment.”

So, what should members of the Trucking industry expect:

• Higher initial capital investments – Freight companies that don’t yet meet the standards may have to invest in overhauling their fleet, by either purchasing new trucks or retrofitting their engines to meet new standards. 

• Financial incentives – Capital investment may be offset by programs that provide financial incentives for fleets to replace older model trucks with newer ones. 

• Decreased freight costs – The improved fuel efficiency of newer truck models will have significant benefits over time, particularly. 

• Lower emissions – Members of the trucking community wish to do their part in being wise stewards of the earth, but not at the sake of ruining the American economy, which trucking is the lifeblood of. 

Trucking Proud

While much remains to be seen, these initial steps are a positive move in the right direction. Until technology reaches the point where it’s cost-benefit to make the switch to electric, this is a worthwhile compromise that reduces emissions without destroying the trucking industry. That said, we’re still in the early phases of the CTI rollout. However, once rules are solidified, we at Trucking Proud will be sure to update you! 

Sources: 

American Thoracic Society Journal. Nox – Nox: Who’s There? https://www.atsjournals.org/doi/full/10.1164/rccm.200903-0485ED

EPA. News Release - EPA Acting Administrator Wheeler Launches Cleaner Trucks Initiative. https://www.epa.gov/newsreleases/epa-acting-administrator-wheeler-launches-cleaner-trucks-initiative

EPA. Cleaner Trucks Initiative. https://www.epa.gov/regulations-emissions-vehicles-and-engines/cleaner-trucks-initiative

EPA. Advanced Notice of Proposed Rule: Control of Air Pollution from new Motor Vehicles. https://www.epa.gov/regulations-emissions-vehicles-and-engines/advance-notice-proposed-rule-control-air-pollution-new

New York Times. E.P.A. Aims tot Reduce Truck Pollution and Avert Tougher State Controls. https://www.nytimes.com/2020/01/06/climate/trump-truck-pollution.html

AP. Truck and Engine Manufactures Support EPA’s Cleaner Trucks Initiative. https://apnews.com/069ebc1851824248b3977377f28e0d2f

EPA. News Release – EPA Jumpstarts Cleaner Trucks Initiative. https://www.epa.gov/newsreleases/epa-jumpstarts-cleaner-trucks-initiative

The Impact of The Celadon Group Filing For Bankruptcy

2019 was a challenging year for the trucking industry. As a result, many trucking firms were in the red on their balance sheets. A whopping 795 trucking firms declared bankruptcy, according to Broughton Capital’s industry data.

Amid these poor market conditions, the largest trucking bankruptcy in history occurred.

The Celadon Group declared bankruptcy on December 9, 2019. While they faced similar obstacles to other companies, fraud played a critical role in their demise. But what impact does this have on the trucking industry as a whole?

What is The Celadon Group?

Founded in 1985, The Celadon Group was one of the largest trucking carriers in North America. During its 34 years of business, Celadon became the largest international trucking service in North America, crossing the border over 150,000 times each year. 

After enjoying notable success, the company went public in 1994 and joined the New York Stock Exchange in 2009. As a publicly-traded company, Celadon had a duty to its investors and shareholders, which it failed to uphold, resulting in an accounting fraud investigation this year.

In a Supply Chain Drive interview, Donald Broughton of Broughton Capital said: "It’s noteworthy because less than 10 years ago Celadon was known as one of the most active, prolific and successful at salvaging small fleets that were struggling and in trouble." 

Breaking Down The Celadon Group Bankruptcy

The Celadon Group and its affiliated entities filed for Chapter 11 reorganization, a voluntary petition for bankruptcy relief. Furthermore, they announced that the business will be shut down. The only affiliate spared was Taylor Express, which will continue operations.

According to the Federal Motor Carrier Safety Administration, at the time of the shutdown, Celadon’s fleet included:

• 2,771 trucks

• 2,553 drivers

• 5,500 employees

Fraud: The Straw That Broke The Camel’s Back

As noted, the trucking industry has had a tough year. While many trucking companies have gone under, Celadon’s tipping point was their expensive fraud investigation. It cost them $33 million. 

William Meek, COO, and Bobby Peavler, CFO, were charged with accounting fraud, resulting in a loss of $60 million to their shareholders and investors. They inflated Celadon’s truck values, all in an attempt to hide how the company lacked adequate cash reserves to meet lender requirements. The company has tried to acquire more financing from its creditors but to no avail. 

Due to this costly investigation, the company could no longer stay afloat. Celadon’s listed assets and debts at the time of closure were as follows:

• $427 million in assets

• $391 million in debt

Celadon CEO’s Statement

Celadon’s CEO, Paul Svinland, released the following statement: 

"We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market headwinds made this impossible to achieve.

Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements.  When combined with the enormous challenges in the industry, and our significant debt obligations, Celadon was unable to address our significant liquidity constraints through asset sales or other restructuring strategies.” 

The Impact of Celadon’s Bankruptcy

Things are looking down for Celadon. However, the lasting impact of this momentous bankruptcy range from negligible to positive for the rest of the trucking industry.

Let’s explore the bankruptcy’s impact on the following market players:

• Shippers - Celadon’s shutdown won’t cause much disruption for the majority of shippers. There’s a surplus of other trucking companies to work with. Finding carriers to take over Celadon’s scheduled freight should not be an issue. Furthermore, powerhouses like Walmart have private fleets at their disposal to take on the load.

• Competitors - Celadon’s cross-border competitors, like CFI and PAM, will benefit from the removal of Celadon’s presence in the market. It presents a wonderful opportunity for them to absorb the open market share.  

• Drivers - Celadon’s drivers may have the most to gain, due to the industry’s driver shortage. Laid-off Celadon drivers are in high demand at the moment. Trucking companies have sent over recruiters to entice newly laid-off drivers, even providing them with food and bus tickets home. The CEO of Dart Transit promised to match or exceed Celadon’s salaries.

The Impact of Celdadon’s Bankruptcy on The Holidays

Celadon’s shutdown occurred during the busiest time of the year: the holidays.  Fortunately, it should not have any noticeable impact on holiday shipments. 

Most shippers using Celadon canceled their loads in time to find alternative carriers.  Furthermore, Celadon committed to completing any en-route loads during the time of the shutdown. 

The Rise and Fall of The Celadon Group 

Celadon going out of business is a testament to 2019’s trucking challenges. While accounting fraud pushed them over the edge, they were struggling with many of the same issues other carriers experienced this year. Most trucking firms can relate to the inflated costs of running a business, due to the oversupply of trucks and shortage of drivers.

Fortunately, with Celadon out of the market, new opportunities present themselves for competitors and drivers alike. 

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

Sources:

The Wall Street Journal. Trucker Celadon Group Files for Bankruptcy. https://www.wsj.com/articles/trucker-celadon-group-files-for-bankruptcy-11575885873

PR Newswire. Celadon Group, Inc. and Affiliates Commence Voluntary Chapter 11 Cases. https://www.prnewswire.com/news-releases/celadon-group-inc-and-affiliates-commence-voluntary-chapter-11-cases-300971115.html

Transport Topics. Bankruptcy Judge OKs Plan to Keep Celadon’s Taylor Express Operating. https://www.ttnews.com/articles/bankruptcy-judge-oks-plan-keep-celadons-taylor-express-operating

Transport Topics. Federal Judge Approves First Stage of Celadon Bankruptcy Plan. https://www.ttnews.com/articles/federal-judge-approves-first-stage-celadon-bankruptcy-plan

The Trucking Industry in 2019 and Looking Ahead to 2020

As the new year approaches, it’s time to take stock of 2019 and set goals for 2020. To that end, the trucking industry experienced a variety of challenges in 2019. 

We’re here to break them down and highlight ways to improve efficiencies for the new year.

We’re here to help you set goals!

Challenges of The Trucking Industry in 2019 

2019 was a tough year for the trucking industry. Due to financial hardships, 795 trucking firms went bankrupt. But what exactly caused these onerous market conditions? 

An Oversupply of Trucks 

After 2018’s booming business, many trucking firms optimistically expanded their fleets. In fact, there was a record number of trucks ordered in 2018. To their new owners’ dismay, 2019 had slower economic growth than anticipated.

As the 2019 market cooled, it left an expensive oversupply of trucks in its wake. Here are some notable truck supply statistics:

• Truck registrations increased by 30% in the first half of 2019, as compared to 2018. 

• Midway through 2019, truckload volumes were 4% lower than in 2018. 

• There are currently 75,000 unneeded tractors on the market. 

Even with so many firms going under this year, few of them owned more than 50 trucks. These bankruptcies won’t solve the overcapacity problem on their own. Fortunately, it’s predicted that the oversupply will balance out within the next 6 months or so, according to Werner CEO Derek Leathers. 

A Shortage of Drivers

In addition to having expensive, oversized fleets, trucking companies felt the pressure of the current driver shortage. This shortage has been compounding in severity for the past 15 years. There are a few reasons for this.

Firstly, trucking has historically drawn a limited demographic. Only 6.6% of drivers are women. Additionally, you must be 21 to get hired, barring a younger demographic that could better handle time away from home. For people with families, this is a major deterrent.

The shortage is amplified by the fact that the current truck driver pool is aging. The average driver age is 46. In 2020, the market needs 110,000 new drivers in order to ease the shortage. Of this figure, 54% will be required just to replace retirees.

How to Fix The Driver Shortage

Some ways to reduce the shortage include:

• Lowering the driving age to 18. 

• Increasing pay and improving benefits.

• Offering drivers more time at home.

• Utilizing semi-autonomous trucks.

• Rebranding the image of truck drivers.

Improving Efficiencies With Technology in 2020

In 2020, the trucking industry will experience more efficiency brought forth by the adoption of new technologies. These innovations will increase productivity, improve decision-making, and reduce the cost of running a business.

Let’s examine the most notable trucking technologies of 2020. 

Cloud-Based Applications

Cloud-based business applications automate a plethora of burdensome, manual tasks. In turn, they increase efficiency, decrease errors, and enhance productivity. For example, bar-code scanning applications can streamline inventory management, saving time and money for everyone involved. 

Artificial Intelligence

Artificial Intelligence (AI) is finding its way into a wide range of industries. The trucking industry is no exception. While fully-autonomous vehicles won’t be ready for decades, AI still has many uses within the trucking industry. 

AI works by analyzing data points with more efficiency than a human could. Combined with machine learning, AI trains itself to improve over time. 

Here are some beneficial applications of AI in the trucking industry:

• Analyzing driver behavior to improve quality hires

• Optimizing for effective preventative maintenance, reducing accidents

• Pinpointing the cause of collisions to improve driver training

• Determining optimized route and fleet mix for greatest efficiency

• Avoiding human bias when employing new drivers, reducing the driver shortage

Blockchain

Blockchain is another flexible technology that has positive implications for the trucking industry. It was popularized by BitCoin and other cryptocurrencies, but it’s applications are much broader than that. 

For example, it could be transformative in matching shippers and carriers, reducing the problematic fragmentation seen in the industry. It can also improve freight transparency, which shippers are demanding increasingly these days.

The Blockchain in Transport Alliance is exploring how blockchain can tackle tricky trucking problems that are hindering the industry. However, for it to truly work in trucking, it needs to be adopted by the majority of the market and must employ data entry standardization. 

ELD Mandate

2020 marks the year that electronic logging devices (ELDs) will be congressionally mandated. Up until mid-December 2019, drivers could get away with automatic onboard recording devices (AOBRDs). However, this is no longer the case. 

ELDs ensure that drivers keep within the limits for safety purposes. ELD technology also promotes efficiency by reducing logging paperwork. It shares the real-time driver status, allowing dispatchers to plan loads appropriately.

As we enter the new year, the trucking industry will continue to evolve. While tariffs, the economy, and stricter regulations are all facets of the trucking climate, there’s one thing in carriers’ direct control: adopting new technologies. 

In order to bounce back from the challenges of 2019, trucking companies should focus on implementing technologies that will impact their efficiency and reduce the cost of running a business. 

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

Sources:

The Wall Street Journal. Trucker Celadon Group Files for Bankruptcy. https://www.wsj.com/articles/trucker-celadon-group-files-for-bankruptcy-11575885873

JOC.com. Not enough trucks leaving market to dent oversupply. https://www.joc.com/trucking-logistics/truckload-freight/not-enough-trucks-leaving-market-dent-oversupply_20190808.html

Freight Waves. Why 2019 has been the worst year for trucking operators. https://www.freightwaves.com/news/why-2019-has-been-the-worst-year-for-trucking-operators

Commercial Carrier Journal. 2020 projected to be ‘a tough year’ for trucking. https://www.ccjdigital.com/2020-trucking-industry-forecast/

American Trucking Association. Truck Driver Shortage Analysis 2019. https://www.trucking.org/ATA%20Docs/News%20and%20Information/Reports%20Trends%20and%20Statistics/ATAs%20Driver%20Shortage%20Report%202019%20with%20cover.pdf

TechCruch. Blockchain will work in trucking -- but only if these three things happen. https://techcrunch.com/2018/03/02/blockchain-will-work-in-trucking-but-only-if-these-three-things-happen/

Improving Truckers’ Health and Wellness

Truck Drivers Face Unique Challenges Maintaining Their Health

Truck drivers are at the frontlines of the trucking industry and put in long hours on the road to keep it going. Away from home for days at a time, truckers may have difficulty maintaining a consistent, healthy routine. Unfortunately, their health has for too long paid the price: obesity rates among truck drivers are two times higher than the general population’s. 

What’s more, most truck drivers report getting less than six hours of sleep per night on the job, and 50% smoke. 

It’s no surprise that truckers have difficulty maintaining their health. The challenges of the job include:

• Lack of access to healthy food

• Long periods of sitting

• Little opportunity for exercise

• Long periods away from home and loved ones

Thankfully, there’s a new movement to improve truckers’ health and wellness—both on the road and at home. With this new wave, drivers have more resources than ever before to develop a routine to get healthy and stay healthy. 

The Risks of Poor Health on The Road

When truckers are in poor health, it puts their jobs at risk, too. Commercial Drivers Licenses require a valid Medical Examiner’s Certificate. And 48% of professional truck drivers receive a one-year-or-less CDL due to chronic conditions including diabetes, high blood pressure, and obesity. 

When a driver loses their Medical Examiner's Certificate, they can lose their license permanently. 

What’s worse, unhealthy lifestyles can put truckers at risk for serious, long-term health consequences, including an increased risk for motor vehicle accidents, and for heart attacks and other medical emergencies.

The Movement to Improve Health and Wellness

The new movement taking place at trucking companies and in the broader economy is aimed at improving drivers’ health and wellness, their quality of life, and their job security.

Melton Truck Lines of Tulsa, Oklahoma now seeks to create a “Culture of Wellness.” This was motivated not just by high driver turnover rates, but also by the company’s experience of human loss and lives cut short. To improve employees’ health and well-being, Melton created an on-site wellness center at its headquarters, making quality healthcare more accessible. What’s more, they created a health tracking app and added employee incentives for participation.

Private Players and Free Resources

Not every fleet has yet invested time and resources into improving drivers’ health. Luckily, start-up players are helping individual drivers make healthy changes to their lifestyles. With all the resources that are now available, it’s easier than ever for drivers to educate themselves on health and wellness as well as find the tools to support lifestyle changes.

• Start-ups provide direct support. Apps like Rolling Strong provide fitness routines designed specifically for drivers, along with coaching and meal suggestions. Individuals can download the app and get started on their own, but fleets and carriers can also partner with the company for a wider rollout. 

• Nonprofits provide free resources. The Virginia Tech Transportation Institute created Driving Healthy, a free database of resources on Living & Eating Healthy, Preventing & Screening, and Driver Safety. 

• Truck stops are changing to support the movement. Travel Centers of America pioneered the StayFit program, which has introduced medical facilities, fitness centers, and trail guides across America. In addition, stops are stocking more healthy, fresh food options.

Lifestyle Changes Are The Key to Change 

For busy drivers, making lifestyle changes can seem like a difficult challenge. After all, conventional wisdom often says that we need to exercise for 30 minutes per day, sleep eight hours per night, and eat fresh-cooked meals. All of that can be impossible for a driver switching between day and night shifts on the road.

The good news is that the new movement to support truckers shows us that conventional wisdom isn’t always right. There are any number of small changes that drivers can make to improve their physical and mental health. Advocates of this new movement recommend changes in the following areas:

• Dietary changes - Start by eliminating sugary drinks and reach for water or black coffee instead. From there, try swapping saturated fats (hamburgers, mayo-based dressings, fried foods) for healthy alternatives (chicken sandwiches, vinaigrettes, fruit). To up-level, try a calorie tracking app to keep track of what you’re eating.

• Exercise - Exercising for just 15 minutes before the start of a drive can kick your metabolism into gear. Try running around your truck—32 laps is 1 mile (generally). Your truck can become a workout space, and apps like Rolling Strong provide routines you can do with only a few square feet. 

• Sleep - To make sure you’re catching ZZZ’s, start by making your sleep environment as comfortable as possible. It should also be pitch black and a white noise machine might help you to relax and fall asleep.

• Stress management - Long periods away from home can make it hard to maintain connections. Be sure to spend time with friends and loved one when you can, and to make time for phone calls when you’re gone. Try meditation and deep breathing at night to improve your stress response. 

Trucking Away From Bad Health

The key is creating habits that are easy to maintain, and taking small steps towards better health. Amazingly, with the movement for truckers’ health and wellness in full swing, there are more ways to find support than ever before.

The industry, at large, wants its truckers to reclaim their health. 

And they’re starting to. 

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

Sources: 

Transport Topics. Options Abound for Elevating Drives’ Wellness. http://www.ttnews.com/articles/options-abound-elevating-drivers-health-and-wellness

Encore. Truck Driver Health and Wellness. http://www.encoreprotection.com/blog/truck-driver-health-and-wellness/

Trucking Info. The Impact of Truck Driver Wellness Programs. https://www.truckinginfo.com/156430/the-impact-of-truck-driver-wellness-programs

Rolling Strong. https://rollingstrong.com/

Driving Healthy. https://www.drivinghealthy.org/ 

Trucking Companies Are Becoming Victims of Privacy Attacks

The invention of the World Wide Web has opened up exciting new possibilities, including the creation of tools for businesses that streamline efficiencies. From communication systems to data storage and analysis, many processes (across various industries) are now digitized. 

Yet, being connected to the internet does come with risks. And the trucking industry is now realizing this phenomenon, seeing as they’re becoming victims of Privacy Attacks.. 

Trucking Companies Are Becoming Victims of Privacy Attacks

Today, privacy attacks are increasingly more sophisticated, with trucking companies among the most susceptible. Anything that connects businesses to the web is at risk, and trucking companies utilize a wide range of online tools. 

Trucks, mobile devices, and computers are all potential access points for hackers. 

There’s even more room for vulnerability when these businesses use external web-based platforms to run operations. 

Ransomware Attacks

A common form of a privacy attack used to target trucking companies is called ransomware. According to Norton, ransomware “holds your personal files hostage, keeping you from your documents, photos, and financial information. Those files are still on your computer, but the malware has encrypted your device, making the data stored on your computer or mobile device inaccessible.” 

Victims of ransomware privacy attacks rarely make it out with their finances intact, so prevention is essential. Different types of ransomware to be on the lookout for include:

• Crypto-malware – Encrypts files, folders, and hard-drives

• Lockers – Infects operating system to totally lock you out

• Scareware – Fake software that looks like an antivirus

• Doxware – Threatens to publish stolen information if you don’t pay 

Prevention

Prevention is key when it comes to maintaining cybersecurity. This includes everything from staff training to penetration testing. 

Hire Your Own Hacker

One way to prevent a breach in security is to hire a computer security specialist to conduct a penetration test. 

• A “white hat hacker” will attempt to break into your systems just as a hacker would. They look for weaknesses in your security systems so that you know where to make improvements. 

• This should be done randomly and without employee knowledge so that everything runs like it would in a real scenario. This, of course, is the most accurate form of penetration testing.  

Staff Training

Privacy attackers look for any point of entry to gain access. And guess what is one of the biggest vulnerabilities? Human error.

Thus, employee training is paramount. 

• Security Training – Train workers to be vigilant and teach them to identify the various different strategies hackers use to breach a system. 

• Employee Verification – You can also prevent cyber attacks by implementing employee verification requirements to access sensitive data. For example, create a unique passcode specific to each user. 

• Plan Ahead – Create a plan of action with procedures that employees can follow if they notice suspicious activity. 

Incident Response Plan

If your business is potentially under an attack, you need a response plan. Create a clear and concise document outlining what to do in the case of a breach. It’s best to have everything in place ahead of time rather than scrambling when an attack occurs. 

Your plan should answer the following questions:

• Who is the lead cybersecurity specialist?

• Which employees are trained in handling this type of situation?

• Who needs to be informed when a breach occurs?

• Will you pay a ransom?

Legal Team

Your plan should also include legal contacts who you can support you should a breach occur.

• Who is your forensics team? It’s critical to speak with a forensics company when you’re formulating this plan, not when you’re already under attack. 

• You should also set up an FBI or DHS contact ahead of time so that the matter is handled as quickly as possible (they’ll already have your brief and understand your software/hardware). 

Update Software 

Another way to prevent hackers from breaking into your systems is by consistently updating your software. Software patches block viruses and remove vulnerabilities in the systems so long as they are done routinely. 

• You can also invest in security software for your business with antivirus protocols and ransomware detection. 

Cyber Insurance

Cyber insurance plans can protect you if your data becomes compromised. 

• There are various plans available, fit for all types of businesses

• Plans may require you to have a vigorous cybersecurity program in place

• They can protect your business from claims and expenses from a cyberattack

Today, with so many businesses operating online, cybersecurity is paramount. Ransomware and other privacy attacks can result in devastating financial losses, and trucking companies are more exposed than ever before. 

Avoid security breaches with preventative action, updated software, and a response plan. 

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

Sources: 

HDT Truckinginfo. Why Trucking Companies Need to Plan Now for a Cyber Attack. https://www.truckinginfo.com/341883/why-trucking-companies-need-to-plan-now-for-a-cyber-attack

Norton. What is ransomware and how to help prevent ransomware attacks. https://us.norton.com/internetsecurity-malware-ransomware-5-dos-and-donts.html

Top Identified Issues in The Trucking Industry

The trucking industry is a driving force behind the success of our economy. 80% of all domestic freight is transported by large tractor-trailer trucks, equating to more than $700 billion in annual revenue. More than 7.5 million people work in the trucking industry, and about 15.5 million trucks operate throughout the nation. Despite its positive impact on the economy, the trucking industry is facing challenges. Here are the top identified issues in the trucking industry: 

1. Truck Driver Shortage

“There is no one reason for the driver shortage, which means there is no one solution,” says Bob Costello, ATA’s chief economist. The driver shortage is a major disruptor in the trucking industry. According to the ATA, the trucking industry is missing an estimated 63,000 drivers, and this number is excepted to continue to grow. The average age of a truck driver, which is 49 years old, is a factor that is contributing to the driver shortage. Older truckers are retiring, but are not being replaced by their younger counterparts. This is worrisome, especially noting that Costello estimates the annualized turnover rate at 94%.

2. Hours of Service Rules

The Hours of Service (HOS) is the second issue affecting the trucking industry. The regulations call for additional flexibility that is applied to truck drivers, specifically for the sleeper berth provision. The Hours of Service rules limit the amount of time truck drivers are required to rest between driving shifts as well as limits the daily and weekly hours spent driving and working. Gary Helms a driver for Covenant Transport says, “the new rules are in fact not flexible enough and that they do not take into consideration the real sleeping habits of drivers. The mandated rest breaks have made truck parking worse.”

3. Truck Driver Compensation

Truck driver salaries have increased this past year in order to attract more workers to the industry. This comes in response to the overwhelming driver shortage and a result of many truck drivers expressing concern that their pay was not keeping pace with inflation. While driver compensation did rise along with the freight economy boom in 2017 and the beginning of 2018, this is not an issue that carriers can easily resolve. 

4. Truck Driver Detention at Customer Facilities

Truck driver detention at customer facilities has negatively impacted productivity, regulatory compliance, and compensation. Truck drivers have reported a 27.4% increase in delays of six hours or more, with truck drivers reporting that dockworkers at customer facilities being the culprit for their delays.  

5. Crumbling Infrastructure 

According to the Chairman and CEO of XPO Logistics, Brad Jacobs, the problems of the United State’s infrastructure is widespread and include “crumbling bridges, roads, and tunnels.” Unsafe infrastructure interferes with a truck driver’s ability to transport goods safely and efficiently. Despite the fact that the Trump administration has proposed funding, Jacobs said that it is about 25 years late, and the spending plan outlined does not come without a cost: an increase in gas prices. 

6. Safety

Safety in the trucking industry is crucial, and it is important to prepare for the unknown. Truck drivers need to remain safe while driving, which includes being provided with the support they need to be aware of their actions and surroundings. This also includes making breaks a non-negotiable. 

7. Variable Costs

While trucking industry expenses tend to remain consistent, but uncontrollable variables can come to play. Staying informed about the decision being made on a federal- as well as a state-level will help to avoid surprise costs. 

If you are a trucking owner and want to learn more about how TPIA is leading innovation in this space please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools please contact team@truckingproudins.com.

5 Trucking Industry Myths Debunked

In the early 1990s, stereotypes about truck drivers started to emerge. TV shows, movies, music, and new lingo all contributed to a certain perception of the trucking industry that has led to widely believed misconceptions. It is time some of these myths are debunked. 

#1. Truck Drivers Are Men Only

Many individuals incorrectly believe that truck drivers are men only when in fact, there are more than 200,000 women who drive long haul trucks. This indicates that women are an integral part of the trucking industry.

#2 Truck Drivers Are Never Home

Being a truck driver is not easy, especially when it is required to travel long distances. However, there is a large number of truck drivers who work near their homes. Truck drivers who have families are given the flexibility to choose routes that given them the ability to be able to go home after their shift and spend time with their family.

#3 Truck Drivers Are Not Educated

In order to be hired as a certified truck driver, there are many requirements and tests to complete. Many truck drivers are educated. The industry continuing to place more incentives into creating opportunities based on the truck driver’s level of education. Some companies are starting to offer reimbursement plans for those who want to attend college.

#4 Drivers Earn a Low Income

According to the Bureau of Labor Statistics, truck drivers on average made an annual income of $47,000 in 2019. Partly because the demand for truckers has increased in recent years, their salaries have followed suit. The highest-paid truck drivers are found in the Northeast. Truck drivers in New York and Massachusetts can make over $65,000 annually. The bottom 10% of truck drivers make on average $28,000 a year. Truck drivers often receive bonuses at the end of the year from their employers due to the hours and miles accrued. 

#4. Truck Drivers Cause Accidents

Large haul trucks are on the road constantly because they have deliveries to make. Despite the fact that trucks are often seen as annoyances, truck drivers are aware of their surroundings because of the technology and mirror systems that are in place to help them stay safe on the road. It is estimated that large haul trucks are three times less likely to have an accident than smaller vehicles. 

#5 Truck Drivers Speed

The goal of most truck drivers is efficiency. Speeding increases the risk of collision and the chances of being pulled over and receiving a citation. This is why the majority of truck drivers obey traffic laws, so they are able to get to their destination safely.

If you are a trucking owner and want to learn more about how TPIA is leading innovation in this space please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools please contact team@truckingproudins.com.

Looking Ahead: The Trucking Industry's Growth Will Continue

The annual projection of the state of the freight economy released this year shows the trucking industry is expected to have an increased growth rate over the next decade as the country’s economy and population continue to expand. ATA Chief Economist, Bob Costello says, “our annual Freight Forecast is a valuable look at where we are headed so leaders in business and government can make important decisions about investments and policy.” 

Our economy just came down from a high in 2018 after being lucrative in transporting goods. Manufacturers were making more goods, the housing market started to boom again, and people were spending money. The most recent years have proven growth within the industry representing a 5.4% increase in 2018, and the industry projects its revenues will increase by 53.8% to $1.601 trillion over the next decade. In 2019, the economy has started to experience a decline, which is an indicator that there are improvements that can be made to assure that these goals and productivity are met in the next decade.

The main delivery system for delivering goods is by using trucks, but a shortage of drivers is causing conflict within the industry. Being the main and literal driving force behind the industry, having the means and ability to deliver all of the goods is pertinent for their very success. While there may be a shortage of drivers operating trucks, there are also many other factors that could be affecting rates within the industry.

The following should be considered:

1. Reduce the miles driven with empty trailers: an estimation from reports about trucking mileage is that empty trailers are transported for almost 65 billion miles annually. If a truck is not full, they will often charge more money for space on the truck, but there are times when drivers aren’t even notified in advance of deliveries that weren’t planned out properly. 

2. Decrease the delays at shipping docks: more than 60% of drivers recorded that the wait time at the shipping docks can be three or more hours of idling. The industry requires that a driver wait no more than two hours because this is the time that a driver isn’t paid for, and it affects the number of hours they are permitted to drive on a daily basis. 

3. Coordination of broker shipments: there are freight brokers who arrange shipments with the truck drivers, but this first requires a broker to win the freight on the truck. After this, the driver of the truck is located and then the rates and pickup have to be agreed upon. This process overall can take hours, so being efficient with the time it takes is crucial. 

There are also quite a few variables that are affecting the trucking industry currently. First, are the Chinese tariffs that were implemented over the past few months. “There are two things that are working that makes me feel this problem is going to go away,” said Economist, Noel Perry. “First off, demand for manufactured goods in China has slowed. So, they’re looking to make stuff for somebody. The other thing is that, of course, they send a lot more to us than we send to them. And therefore, if both sides put up the same level of tariffs, it hurts them a lot more than it would hurt us. So maybe the Chinese leaders have decided they should compromise.”

It is also expected that in 2019 the driver’s pay will increase for truck drivers to keep satisfied. All the while, trucking companies are also offering hefty sign-on bonuses in expectation of the industry’s growth. “2019 looks to be an OK year, but people will feel in our business that it is not a good year because they’re used to the wonderful things that happened in 2017 and especially 2018,” remarked Perry. Maybe it won’t be as wonderfully lucrative as last year, but FTR Vice President of Commercial Vehicles, Don Ake said, “the industry is still looking good going into 2019.”

Not only are trucking companies used to delivering goods to a retail location, but they are also bringing materials and products to disaster relief areas, such as the California forest fires and the East Coast hurricanes. As retail grows and more people purchase online, most deliveries are going across the country. The convenience of online shopping makes deliveries more frequent and will continue to grow over the next decade. 

This year has generated 11,700 jobs so far, but truckers still are feeling anxious about this next year and whether they will be able to alleviate their recession fears.  

Seidl of Cowen wrote to investors in May, "the death of freight has been greatly exaggerated." Seidl said in his note that "the tremendous strength in the freight market in the first half of 2018" just makes 2019 look really bad. So all-in-all, it still looks like the industry will continue to experience growth. 

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

Solar Panels on Trucks?

Solar power has evolved from benefiting households to now powering commercial vehicles on the move. With easy access to direct sunlight and a large surface area, it is logical that this is the next way to use solar panels. The energy collected can be used to supplement power to the HVAC systems and hotel loads to eliminate the need for additional batteries. 

In recent years, the United States Environmental Protection Agency (US EPA) and the National Highway Traffic Safety Administration (NHTSA) have enacted greenhouse gas emissions regulations on commercial vehicles which extend to 2030. The regulations require manufacturers to develop and sell technologies to improve efficiencies.

Not to confuse these solar panels with the traditional thick ones utilized on home rooftops. Truck solar panels are thin, flexible, and lightweight. The truck panels are specifically designed to be on top of a moving automobile and are resistant to mother nature. The solar power is useful for supplying energy to parts of the vehicle that normally would be powered by the battery. “Solar panels can extend the runtime of battery HVAC systems not only to help the HVAC system make it through the night without draining the truck’s batteries, but also to reduce the load on the alternator the next morning resulting in fuel savings” reads the NACFE Confidence Report: Solar for Trucks and Trailers.

The batteries inside of large, heavy-duty trucks are constantly running, and fleet owners are faced with the expenditure of replacement battery bills on a regular basis. This is one of the cost-saving measures that has been evaluated for operating the trucks. According to the Confidence Report on Solar for Trucks, “considerations also include cost savings due to reduced idling, less load on the alternator during normal tractor–trailer operation, increased battery life, and avoidance of emergency roadside assistance.” 

Trucks are typically not permitted to idle, although they most often need to while loading and unloading deliveries with the liftgate. Cities, such as New York, give out thousands of dollars in idling tickets in a week alone. Fleet owners get hit the worst with these tickets having to pay continuous fines for a situation they cannot control. In addition to being fined for it, the constant idling wears on the battery, putting an average of seven miles on the truck for every hour spent with the truck running.

Using solar panels on trucks would be helpful to save on fuel costs, but as of right now the technology is not fully in place. Manufacturers say that the surface combined with the weight of heavy-duty trucks makes it somewhat of a challenge to harness enough energy to power the engine. However, fuel efficiency is an important issue that should not be dismissed. With the average eight-wheeler truck getting 6.4 miles per gas and traveling about 100,000 miles a year, solar panels could help account for thousands of dollars in savings. 

According to eNow, a builder of solar panels in Warwick, Rhode Island, there are six benefits to using solar panels on trucks. They are:

• Increased run time

• Reduced idling

• Increased battery life

• Reduced downtime and maintenance

• Reduced spoilage of perishable products

• Improved customer satisfaction

In a test by eNow, they proved they could cut harmful diesel emissions on a refrigerated truck trailer by almost 100%. Solar panels can help to build power systems for big-rig air conditioning, lift gates for straight and semi-truck trailers, provide safety lighting for emergency vehicles, and telematics systems that require an energy source to ensure batteries are always charged. 

The NACFE report calculated a payback scenario for a solar panel installation on top of a tractor to support a battery HVAC system. The cost and installation were $2,500 and the payback was about three years. Return on investment is key for the trucking industry, and the potential of a truck being taken out with solar panels would mean a huge loss in their investment. 

Mike Roeth, the executive director of The North American Council of Freight, said “the “slam-dunk” applications for solar, are maintaining the batteries on liftgates, refrigerated trailer diesel power units and trailer telematics systems that relay GPS, temperature and other data to the fleet…The battery savings and the benefits to the drivers generally make solar something fleets should be considering.”

There are many benefits utilizing solar panels on trucks, however, the energy “is used very little right now,” said Antti Lindstrom, an analyst with IHS Markit. “I don’t really see much growth there because trucks operate in so many different environments and many are not that constantly exposed to sunlight.” This affects the decision to invest in solar energy for fleets.

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com.

New Federal Government Concerns Met With Backlash

The Federal Motor Carrier Safety Administration (FMCSA) made changes in the Notice of Proposed Rulemaking that was published on August 14. The proposal has been met with both acceptance and controversy from different groups nationwide. The mission of the FMCSA is to provide greater flexibility for drivers to subject to the Hours-of-Service rules without adversely affecting their safety. Included in the changes is the ability for drivers to split their off-duty time, which will create more flexibility during their travels.

Here are five changes that have been proposed:

1. A change in the short-haul exception by lengthening the driver’s maximum on duty from 12-14 hours and extending the distance a driver may operate from 100 air miles to 150 air miles. 

2. Modification of adverse driving conditions exception by extending the window of time in which driving is permitted by two hours. 

3. Increase flexibility for their 30-minute break rule by requiring a break after eight hours of driving time, and instead allowing the requirement to be satisfied by an on-duty break from driving instead of requiring an off-duty break. 

4. Changes to the sleeper berth exception to create an allowance for drivers to split their required 10 hours off duty into two periods. One period of at least seven hours in the sleeper berth and the other period of not less than two consecutive hours either off-duty or in the sleeper berth. 

5. One off-duty break of at least 30 minutes, but not more than three hours. This would create a 14-hour driving window for the driver provided that the driver takes 10 consecutive hours off-duty at the end of their work shift. 

Not everyone was pleased by the proposal as it was met with backlash around the country. One of the advocacy groups in disagreement is the Advocates for Highway and Auto Safety (AHAS). Based on the schedule outlined above, it averages that a truck driver can work about 77 hours a week, which is almost double the average American. The AHAS writes, “any proposal that increases pressure on truck drivers, opens new opportunities for abuse of the rules, and further endangers truck drivers and all those who share the roads with them should be rejected.” A major dilemma associated with this new proposal is that altering schedules for drivers causes serious fatigue and increases the risk associated with driving long distances. 

As an advocate as well as the implementor of the new shift in HOS regulations, the federal government considers this to be a change in the right direction. “This proposed rule seeks to enhance safety by giving America’s commercial drivers more flexibility while maintaining the safety limits on driving time,” said U.S. Transportation Secretay, Elaine L. Chao in a statement issued by the U.S Department of Transportation. It is also estimated to save the U.S. economy and American consumers $274 million because it will better manage one of the largest components of the American national economy. Todd Spencer, president of the Owner-Operator Independent Drivers Association stated, “there may not be a one-size-fits-all solution, but the proposed changes are a positive start since truckers don’t have any control over their schedules or traffic conditions. For too long and too often, they find themselves in unsafe circumstances because of current, overly restrictive rules that decrease highway safety.” 

The new flexibility in the truck driver’s workdays is exactly what many groups, such as the Advocated for Highway and Auto Safety, argue will inhibit the drivers. Less restriction and the increased ability to work a flexible schedule that does not require eight hours of continuous sleep can also result in a decrease in highway safety. Breaks are no longer to be required to be taken off-duty, which means the entire workday can be completed without even having a real break. In conjunction with the split duty provision, this could potentially create a larger risk due to the possibility for drivers to pause their duty clock from 30 minutes to three hours, resulting in a workday of 17 hours. For those on the road, it may increase the accident rate of truck drivers. On average, almost 50% of truck drivers reported falling asleep at the wheel at least once this past year. 

Although the overall proposal is not totally changing the on- and off-duty time, it is pushing the limit on quality sleep and crash prevention. The FMCSA says, “[FMCSA’s] proposal is crafted to improve safety on the Nation’s roadways.” In retrospect since 2009, truck crash deaths have risen by 41%, and the industry still receives push back to weaken Hours-of-Service rules along with other truck safety regulations. The FMCSA calls these safety rollbacks “flexibility.” The AHAS says this is a guise as it is “nothing more than thinly veiled attempts to force drivers to work even more arduous schedules.”

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com. 

Trucking Groups Not Happy With Excise Tax

The Federal Excise Tax (FET) is one of the oldest taxes in American history. Since it was enacted twenty years ago, it has had a noticeable consequential effect. For example, the trucking industry is finding that upgrading their fleets is incredibly expensive. The Modern Trucking Fleet  (MTF) coalition that was established in January 2019, is now taking action to remove this antiquated excise tax that was enacted 102 years ago by Congress to pay for World War I efforts. In a letter to Congress, the MTF wrote: “repealing the tax would deploy new, cleaner, and safer heavy-duty trucks and trailers by making them more affordable—particularly for small businesses,” that is dated July 24.

The money that is collected from this tax is given to the Highway Trust Fund to finance most government spending for highway and mass transit projects. Representative, Doug LaMalfa (R-CA) who is a supporter of repealing the FET is quoted saying, “the FET is also the highest percentage-based tax that Congress imposes on any product, and it’s not even a reliable source of funding for the Highway Trust Fund.”

In an effort to appease Congress, the MTF has been working to find an alternative source for the percentage of tax that supports the Highway Trust Fund in order to alleviate the potential loss. The American Truck Dealers (a division of National Automobile Dealers Association) states that the FET tax has been the most inconsistent source of revenue to the MTF over the past 20 years. They are fighting for the rights of business owners to purchase new trucks because they would improve highway safety and drive economic growth. The advanced safety features would help prevent crashes and protect motorists on the road. It is also evident that the tax itself depresses truck sales and stunts job growth. 

“[The tax] is an outdated and unnecessary barrier that discourages truck buyers from upgrading to more modern, cleaner, and safer vehicles,” LaMalfa, a member of the Transportation and Infrastructure Committee, said in a statement. “Most heavy-duty truck owners can’t afford a $20,000 tax bill per new truck, so they don’t buy them. They’re far more likely to purchase used or older trucks with older technology that are not as fuel-efficient or don’t achieve the air quality goals the government demands.” The FET applies the tax on gross vehicle weight (GVW). This includes vehicles above 33,000 pounds, trailers above 26,000 pounds, and tractors above 19,500 pounds on their first sale.

The trucking industry has been facing disagreement from several angles. On average, the age of trucks on the road is 10 years. Representative, LaMalfa (R-CA) said, “the 12% FET limits truck replacement by discouraging truck owners from upgrading their outdated vehicles–leading to higher emissions and more dangerous roads. We won’t truly see a modern truck fleet in the U.S. until it’s repealed.” 

It is apparent that the astronomical price of this tax takes precedence over the environmental and safety concerns associated with the outdated vehicles. The automobile industry has improved the technologies built into current trucks since 2000. These advancements have been made to meet emission standards to reduce the nitrogen oxide emitted by large trucking fleets by 97%. This is a dramatic improvement that would benefit to businesses nationwide. However, this upgrade in truck manufacturing has a pretty hefty price tag, adding close to $40,000 to each truck.  

Allen Schaefer, executive director of the Diesel Technology Forum, is a leader in the strong efforts to encourage clean diesel technology. He expressed his views that the FET Repeal bill represents a great opportunity to accelerate the equipment turnover of existing fleets from old technology to new. He stated that new diesel engines were not only cleaner, but also more fuel-efficient. The benefits of these new trucks will not be realized while they sit on dealer lots.

“The FET discourages truck buyers from purchasing the newest, safest, and cleanest trucks and trailers available,” said Jodie Teuton, Chairwoman of the American Truck Dealers (ATD) and member of the MTF’s Steering Committee. “This tax is as outdated as biplanes and trench warfare. MTF applauds the bipartisan leadership Representatives Peterson and LaMalfa have shown by introducing this bill. MTF urges Members of Congress to cosponsor H.R. 2381 to repeal the FET, which will help turn over the truck fleet and put newer, more fuel-efficient and safer trucks on the road.” 

Jodie Teuton concludes, “this Congress, we have a unique opportunity to make FET repeal a reality,” Teuton added, “both Congress and the administration are discussing a comprehensive infrastructure bill that would address funding. This is our best shot in decades to eliminate this tax.” The movement is strong, and the effort is continuing to improve and succeed in a fight to change history.

If you are a trucking owner and want to learn more about how Trucking Proud Insurance Agency (TPIA) is leading innovation in this space, please contact jamie@truckingproudins.com. If you are an insurance broker interested to learn more about joining the TPIA team to leverage these unique tools, please contact team@truckingproudins.com. 

How Nurse Triage Can Lower Your Claim Cost

In the space of a year, freight drivers will spend tens of thousands of hours behind the wheel transporting and delivering goods. Logically, that much time spent driving increases the odds that they will be in a motor vehicle accident or get injured on the job. According to the Federal Motor Carrier Safety Administration (FMCSA), there were 116,000 injury crashes involving large trucks or buses in 2017 alone. Although that figure merits surprise on its own, it fails to account for the millions of smaller injuries that occur annually from simply doing the job. 

As a trucking carrier, it’s your duty to provide employees with worker’s compensation and an avenue for making injury claims. Knowing that the faster an injury claim can be completed, the lower the costs of the claim will be, it’s essential that you do everything in your power to expedite that claims process. One way you can do this is by utilizing TPIA’s instant claim reporting program. Below, we’ll describe the claim process then detail how the program will immediately put a defensive team together to get your employee back on their feet and lower claim costs: 

Freight Injury Claims

There are three primary injuries that occur to drivers in the line of duty. They are:

• Accidents – Typically, driving accidents result in the most serious of injuries, ranging from minor bumps and bruises to traumatic and permanent injuries including:

  • Bain injuries

  • Herniated disks

  • Broken bones

  • Sprains

  • Strains

  • Neck and shoulder issues

  • Death

• Repeated stress over extended periods of time – Navigating in a stationary position for tens of thousands of hours per year can lead to lingering injuries particularly in the wrists, ankles, knees, shoulders, neck, and back. 

• Unloading and loading – Drivers that help move cargo are especially vulnerable to injuries during these activities. This is particularly true for those drivers that repeatedly move awkwardly shaped cargo without being given proper equipment. 

If your driver experiences one of these injuries while on the job, they are legally encouraged to make an injury claim without fear of being fired for the claim. Educate your drivers as to the following:

• Accidents – If your driver is involved in an accident, encourage them to take the following steps:

  • Call 911 if immediate medical attention is needed.

  • Report the accident to your head office for a hands-on direction.

  • Take plenty of pictures of the scene of the accident.

  • Obtain witness information. 

  • Call the TPIA claim line. 

• Report the injury right away – If you utilize independent contractors, you may not have much direct contact with your drivers for long periods of time. Despite this, it’s essential that you let them know who they can contact if they are injured. 

Additionally, create a strict guideline wherein injuries need to be reported immediately. As mentioned, lost time can have a massive impact on the final claim cost, so encourage your drivers to get the process going immediately. Additionally, the cost of a claim directly impacts the cost of worker’s compensation insurance, so it behooves you to try and keep both costs down. 

How Nurse Triage Can Lower Your Claim Cost

In order to lower claim costs, TPIA created a claim reporting line that is a recorded line with a medical nurse who also documents the claim for reporting to the insurer. This system essentially acts as a 24/7 injury hotline. When an injury occurs, your driver calls the TPIA  1-800 number in order to speak with a trained nurse. From there, the nurse can direct the driver to self administer first aid or recommend a carrier-designated medical care facility. 

At the conclusion of the call, the claim is immediately reported to the trucking carrier, TPIA, the insurance company, and the treating medical facility.  Benefits of this include:

• Cuts down lag (reporting time to the insurer). 

• Reduces the litigation rate. 

• Collates evidence and documentation to prevent fraud.

• Cuts down indirect bottom line costs. 

• Provides employers with a simple and cheap way to report injuries that occur from or during work. 

• Signals to employees that you care about their health and safety.

• Puts employees in insured networks and helps them avoid expensive ER visits.

• Helps the carrier gather information and data regarding injuries and accidents.

Trucking Proud

As a trucking carrier, it’s important that you understand and acknowledge that workplace injuries are part of the business. Because of that, it’s crucial that you do everything in your power to protect your employees and take care of those that do get injured on the job. Taking action such as utilizing the TPIA claim reporting program will provide you with the dual benefits of happy and healthy employees and lower claim costs. 

That’s a win-win for your freight company. 

Sources 

FMCSA. Large Truck and Bus Crash Facts 2017. https://www.fmcsa.dot.gov/safety/data-and-statistics/large-truck-and-bus-crash-facts-2017

Lile, C. Trucking Info. 3 Things Drivers Need to Do in Workers’ Comp Claims. (2014). https://www.truckinginfo.com/155763/3-things-drivers-need-to-do-in-workers-comp-claims

Truck Wreck Justice. Injured Dirving a Truck? Here are 3 Things You Need to Know. (2018). https://www.truckwreckjustice.com/injured-driving-truck-3-things-need-know/

Post Trip Inspections: Your New Secret Weapon

If you’re the owner of a fleet, optimization needs to be your mantra. You want a business that’s a well-oiled, efficient machine. Doing so reduces costs, increases output and profit, and removes much of the uncertainty that surrounds the freight industry. Naturally, there are steps your drivers can take to help your fleet continue to raise the bar. One such measure that they should be performing with each drive is the Driver’s Vehicle Inspection Report (DVIR). Also known as a post-trip inspection, a DVIR is one of the simplest ways you can reduce liability and increase efficiency. 

You might read this and think, but aren’t DVIRs already mandatory? The answer to that is yes; however, it’s also one of the most common areas where drivers fail to comply. So, if you wish to prevent that, take the following measures to ensure that your fleet is following safety standards. 

Post-Trip Inspections: Your New Secret Weapon

According to 49 CFR § 396.11, titled the Driver vehicle inspection report(s), motor carriers are obligated to have their drivers prepare a written vehicle report at the end of each workday. The report is meant to detail the condition of parts and accessories and make note of any glaring issues. 

According to the Federal Motor Carrier Safety Administration (FMCSA), the law states: 

“No commercial motor vehicle shall be driven unless the driver is satisfied that the following parts and accessories are in good working order, nor shall any driver fail to use or make use of such parts and accessories when and as needed: Service brakes, including trailer brake connection, parking (hand) brake, steering mechanism, lighting devices and reflectors, tires, horn, windshield wiper or wipers, rear-vision mirror or mirrors, coupling devices, wheels and rims, emergency equipment.”

Despite the fact that this has been a rule for years, failure to perform a proper post-trip inspection is one of the most commonly cited violations that occur during audits. It’s easy to understand why this occurs:

• Tired drivers – After a long day driving, often, the last thing your driver wants to do is spend an additional 30 minutes inspecting their vehicle. They make the false assumption that if the truck was running flawlessly, then there would be no need for repairs.   The TPIA inspection will also greatly reduce inspection time (see below). 

• The notion that the pre-trip check will cover it – Employee drivers shouldn’t lose any money if their truck doesn’t run since that falls on the carrier. As a result, they’re often willing to let the driver responsible for the pre-trip inspection make note of any issues. 

In addition, they may be lazier about their inspection. They might go through the motions without performing as thorough a check as they should since they know the pre-trip check can flag any glaring issues.

Benefits of Post-Trip Inspections 

Encouraging your drivers to comply with the rules has several benefits to your fleet operation. These include: 

• Decrease your liability – Failure to comply with legal requirements can result in serious liability issues. For instance, these types of crashes can leave your freight company vulnerable to serious liability issues:

• Bodily harm;

• Property damage; and

• Death

• Increase efficiency – Few things ruin a carrier’s credibility more than shipping delays. If a truck breaks down or needs to be in the shop for repairs (particularly repairs that could’ve been avoided had they been pointed out earlier), your entire operation slows down. Nipping issues in the bud ensures that fixes can be made immediately. 

Also, pointing out small issues saves you money on repairs since it is more cost-effective to have minor maintenance and patch-ups than it is to replace parts or vehicles wholesale. 

• Keeps you in compliance – If your drivers repeatedly fail to perform and log their post-trip inspections, your company will inevitably receive compliance safety and accountability (CSA) violations during audits. Violations can result in any of the following consequences:

• Increase the frequency of audits on your business

• Raise your insurance rates

• Make it harder to entice high-quality drivers to work for you

• Decrease trust in your operation 

How TPIA Helps You Optimize Post-Trip Inspections 

Seeing that this continues to be a glaring issue for carriers, TPIA sought a way to optimize post-trip inspections. They found their solution in the form of a mobile post-trip inspection application. This app allows drivers to go through a streamlined post-trip checklist—taking pictures of each part—instead of having to make physical notations of glaring issues. In fact, many trucking carriers start with a streamlined version that verifies the five most important items are inspected: 

1. Trailer hook securely fastened in fifth wheel

2. Tread depth of tires acceptable

3. Brakes properly adjusted

4. All lights in working condition

5. Placard positioning appropriate

Benefits of using the app include:

• Speeds up the process

• Consolidates reports in one place

• Removes needless paperwork and documentation 

The TPIA app has brought DVIRs into the 21st century. So, take advantage of this new secret weapon by requiring your drivers to download and use the app. It’ll optimize your logistics and ensure smooth sailing.  

Sources

Federal Motor Carrier Safety Administration. 49 CFR Parts 392 and 396. https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/Final%20Rule_DVIR_2_0_09-12-14.pdf

Rudick, Z. Fleetio. Safety and Compliance: Navigating the Complex World of DVIRs. (2017). https://www.fleetio.com/blog/safety-and-compliance-dvirs

Colley, J. Whip Around. What is DVIR (Driver Vehicle Inspection Report)? (2018). https://www.whip-around.com/blog/what-is-a-dvir-driver-vehicle-inspection-report

The (Unlikely) Key to Increasing Fleet Efficiency

When it comes to running a shipping fleet, efficiency is the name of the game. Every chance you can take to make your operation run smoother, quicker, and with fewer missteps will increase output and drive revenue. While you may have already taken the usual steps necessary to increase your fleet’s proficiency, there may be one seemingly small but vital task you’re overlooking—post-trip inspections.

Below, we’ll discuss the importance of post-trip inspections and then explain how TPIA’s application can help streamline and optimize this process. 

49 CFR § 396.11 - Driver Vehicle Inspection Reports

Even though post-trip inspection reports, also known as Driver’s Vehicle Inspection Reports (DVIR), have been mandatory for a number of years, failure to do so remains one of the most regularly noted violations discovered upon compliance review. According to the Electronic Code of Federal Regulations, Title 49, Subtitle B, Chapter III, Part 396—Inspection, Repair, and Maintenance: 

“Every motor carrier shall require its drivers to report, and every driver shall prepare a report in writing at the completion of each day's work on each vehicle operated, except for intermodal equipment tendered by an intermodal equipment provider.”

Drivers are expected to perform a post-trip check the following: 

• Coupling devices

• Emergency equipment 

• Horns

• Lighting devices

• Parking brake

• Rear vision mirrors

• Reflectors

• Service brake

• Steering mechanism

• Tires

• Trailer brake connections

• Wheels and rims

• Windshield Wipers

According to laws, freight operators are required to highlight any defect or deficient parts or accessories that might impact the safety of driving the vehicle or cause the truck to malfunction and/or breakdown—this must be done at least once every 24 hours. Upon discovery of an issue, a carrier is required to take corrective action. 

The (Unlikely) Key to Increasing Fleet Efficiency

Post-trip inspections are key to making sure your fleet is ready to roll come morning time.  As we know, frequent driving, especially over long distances, tends to lead to damage or wear-and-tear over time.  Even an accident-free drive can result in parts failing. Breakdowns can lead to a host of problems including:

• Delays – If the vehicle fails to pass a pre-trip inspection, the truck will be sidelined until repairs are made. Highlighting it the night before gives you the ability to immediately fix issues, order parts, and avoid further delays. 

• Increased maintenance costs – Fixing a minor issue is much cheaper than allowing it to fester and become a larger problem. Patching a leak in the suspension is far smaller cost than completely replacing it wholesale or losing the whole truck because of a crash caused by a suspension failure. 

• Increased liability – If you fail to comply with safety codes and standards and an employee or innocent driver on the road suffers harm as a result, you open your entire company up to potential liability. Just one unsafe labor practice lawsuit could completely destroy your entire freight business. 

• Decrease CSA violations – Compliance, safety and accountability (CSA) violations can be seen by:

• Law enforcement

• Insurance companies

• Shippers

• Employers

They can be used to gauge the riskiness and safety of your fleet. A good score results in fewer audits, more trust, better drivers, and lower insurance rates.

Simply put, vehicle inspections can save you time, money, and lives. 

Post-Trip Vehicle Inspections With TPIA

Typically, a post-trip inspection will take at least 30 minutes and cover 50+ items in order to satisfy safety standards. Seeing this, TPIA’s mobile application sought to streamline the process and increase the accuracy and reporting methods. 

But how do you use it to increase the efficiency of post-trip inspections? It’s simple. First, your drivers will have to go to the “Client Portal” on their smartphone. From there, they can use the “Truck Inspection Application.” This allows them to go through an efficient process wherein they quickly take photos of all the parts and accessories. This accomplishes the following:

• Creates a uniform set of pictures detailing the condition of the truck. 

• Eliminates the need for written documents and record keeping.

• Centralizes all reports so that retrospective reviews can be made to ensure accuracy or note damages. 

• Speeds up the entire process and makes it easy for fleet operators to verify damages without needing to physically inspect the vehicles in person. 

Increasing Your Fleet’s Efficiency

One of the easiest ways to optimize your freight business is to increase efficiency. Ensuring that your operators fill out Driver’s Vehicle Inspection Reports is one unlikely way you can do that. In order to facilitate your efforts, the TPIA app has modernized the entire process. 

So, encourage your drivers to download and begin using the app every day. Doing this will save you time, money, and lives. 

Sources

Cornell Law. 49 CFR § 396.11 - Driver vehicle inspection report(s). https://www.law.cornell.edu/cfr/text/49/396.11

Robinson, J. Fleetio. CSA Scores: Effects on Your Fleet and How to Improve. (2017). https://www.fleetio.com/blog/csa-scores-effects-on-fleet-how-to-improve

Part380. Safe Vehicle Inspection Protocol. (2014). http://part380.com/blog/tag/post-trip-inspection/

What Owner Operators Should Do Following The Dynamex Decision

In early 2019, California legislators pushed through labor legislation what many business analysts suggest will have a negative impact on the freight industry as a whole. At the heart of Bill AB-5, referred to as the Dynamex Decision, is an attempt to quash a freight company’s ability to outsource independent contractors to handle tasks that go beyond the purview and/or scope of their traditional business model. 

Despite protests from the California Trucking Association, the pro-labor bureaucrats in Sacramento have pushed along the Dyanmex Decision, consequences are damned. As a result, this change to independent contract status could have negative impacts on your business, particularly if you don’t meet compliance. Therefore, it’s essential that you take the steps to align your business with this new legislation or else face fines. To help you avoid such consequences, TPIA will discuss the decision and outline what you need to do to meet compliance. 

Read on to find out what those steps are.

The Dynamex Decision 

Dynamex Operations West Inc. v Superior Court was a labor interest battle that used the ABC test to claim that all workers, including independent contractors, would be considered employees and thus be protected by California’s wage laws. This meant that they would be guaranteed:

• Overtime pay

• Meal and rest breaks

• Minimum wage guarantees 

This ruling failed to account for the fact that the vast majority of smaller owner-operator freight companies wouldn’t pass a strict ABC test due to their reliance on independent contracting in order to compete with larger companies. According to Laura Curtis, a policy advocate who opposed the decision:

“Failure to add exemptions could eliminate the majority of independent contractors in California. This not only hurts the business model of a broad swath of industries and billions of venture capital dollars that are increasingly invested in the business, but also it hinders California as a national leader in the innovation economy.”

As has been the case with minimum wage laws, which forced small businesses to eliminate jobs or reduce employee hours, this ruling will have “unintended consequences” that impact the very people they’re intended to help, particularly minority-owned businesses. For example, Swift has already abandoned the use of owner-operators in California in order to avoid potential liability. 

What Trucking Carriers Should Do Following The Dynamex Decision

Naturally, if your operation utilizes owner-operators of 10,000+ lbs. trucks, you might be worried about the ramifications this decision could have on your business. TPIA understands your concerns and is partnering with Sheppard Mullin to audit our client’s:

• IC Contracts

• DMV Motor Carrier Permits

• US DOT

Our goal is to help you avoid unexpected fines as well as retroactive fines. So, in order to avoid employee misclassification, you need to ensure that your workers meet the three criteria to be categorized as an independent contractor: 

1. The worker must be free from control and direction of the hiring entity.

2. The work performed must be outside the usual course of the hiring entity's business.

3. The worker must be engaged in an independently established trade, occupation or business.

Criteria #2 is where the vast majority of owner-operators will run into trouble since driving trucks lies at the very heart of a trucking company’s business model. Shawn Yadon, CEO of the California Trucking Association, had this to say about the issues this ruling raise:

“Owner-operators are integral to the trucking industry and many of today’s largest trucking companies started with just a single truck. Not only is the new ‘A-B-C’ test, set by the Dynamex decision, to determine whether a worker is an employee or independent contractor unconstitutional, but its implementation and enforcement will also deprive the next generation of truckers the entrepreneurial opportunity to grow.”

So, what can you do to protect yourself? To start, TPIA suggests you take three actions:

1. Add a brokerage to your operations – This allows you to circumvent the rules by separating trucking operations from lease owner operations. 

2. Have leased-on drivers obtain their own MC numbers – This grants drivers their own MC and DOT numbers, state and federal permits, and allows them to further avoid the employee classification requirements. 

3. Independent drivers procure their own insurance - This further separates your business entity from the driver and helps establish that the driver is acting as a sole proprietor. 

Besides these steps, TPIA will work tirelessly with you to ensure that you can continue business as usual. Rest assured that we’ll notify you as to any changes to the decision or alternative solutions that you can employ.  

Moving Forward

Trucking Proud Insurance Agency wants to help trucking carriers avoid the negative ramifications of the Dynamex Decision. Going forward, we will work with you to ensure that you meet these evolving compliance issues. 

If you have further questions or concerns, reach out and we’ll be more than happy to assist you. 

Sources

Zwahlen, C. Trucks. New Labor Rulings Favor Motor Carriers Operating in California. (2019). https://www.trucks.com/2019/05/15/trucker-labor-rulings-california-dynamex/

Pitz, P. DAT. End of Owner-Operators in California? (2019). https://www.dat.com/blog/post/end-of-owner-operators-in-california

HDT. California Truckers Sue to Prevent Application of Dynamex Driver Wage Decision. (2018). 

https://www.truckinginfo.com/317798/california-truckers-sue-to-prevent-application-of-dynamex-driver-wages-decision

Jaillet, J. Overdrive. California lawmakers proceeding with bill that imperils owner-operator model. (2019). https://www.overdriveonline.com/calif-lawmakers-proceeding-with-bill-that-imperils-owner-operator-model/?utm_source=daily&utm_medium=email&utm_content=07-14-2019&utm_campaign=Overdrive&ust_id=[-MD5-]

The Mistakes That Could Cost Your Company Millions: Understanding The Importance of Complying With The Labor Code Under PAGA

Is there a worse feeling than having to pay a fine for breaking a law you didn’t even know you were breaking? Due to a recent uptick in lawsuits filed under the Private Attorneys General Act (PAGA), claims filed related to labor code violations, several California companies are becoming familiar with the feeling. 

And because California’s labor code features myriad complexities, your company could be next. Read on for an overview PAGA, why it’s become all the rage with disgruntled employees, and how you can prevent your trucking company from getting swept up beneath it.

A Brief History of PAGA

PAGA was incorporated into California state law in 2004 as part of the state’s effort to compensate for its minimal resources in enforcing California’s labor code. 

In essence, PAGA protects statewide employees, both current and former, by enabling them to serve as their own private attorney when they believe that their employer has violated the state's labor code.

PAGA’s popularity experienced a dramatic surge on the heels of the following court rulings:

• 2009 – The California Supreme Court rules that many of the strict requirements for filing class-action lawsuits don’t apply to suits under PAGA, making it ridiculously easy for PAGA claims to be tacked onto class action claims.

• 2014 – The state high court rules that previously executed arbitration agreements don’t apply to PAGA. This resulted in an unprecedented boost in PAGA-only claims.

• 2017 – The California Supreme Court rules that employees filing PAGA claims are entitled to full cooperation from the employer in providing information upon request. Most companies prefer to avoid the staggering litigation costs this entails altogether by settling out of court early in the litigation process.

• 2018 – A state appellate court adjusted a PAGA provision to allow PAGA plaintiffs affected by one or more labor code violations to file claims for other labor code violations, even if the plaintiff wasn’t affected directly by them. This means that there’s nothing stopping a disgruntled employee from tossing proverbial labor code violation spaghetti against the wall and seeing what sticks.

Why PAGA Lawsuits Are Destructive

With PAGA lawsuits, the litigation costs alone will put a massive dent in your bottom line. But PAGA claims really begin to hurt when the court rules in favor of the employee, as this results in you having to pay damages to:

• The individual(s) who filed the claim

• The state, which recovers 75% of the total penalties

• And (here’s the kicker) every employee on your staff at the time the PAGA claim was filed receives a cut, whether they participated in the claim or not

Depending on the violation, penalties range from $100 to $200 per employee at the time of the alleged violation.

Encouraged by his experience as president of a company that was hit with a PAGA lawsuit, Tom Manzo started the California Business and Industrial Alliance (CABIA). He believes:

“The Private Attorneys General Act takes everything dysfunctional about California's 1,000 plus page labor code and allows plaintiffs' attorneys to weaponize it. Our lawmakers need to realize small business owners cannot afford such excessive fines and penalties over a late lunch, a typo on a pay stub, or other minor violations that carry big consequences.”

Today, the CABIA is suing the state over PAGA lawsuits and asking it to enforce its own labor laws. Learn more about the CABIA’s work by visiting their website: www.cabia.org.

What Constitutes a Violation of California’s Labor Code?

A former or current California employee may file a PAGA claim if their employer has failed to do one or more of the following:

• Provide Regularly Scheduled Breaks – This includes providing daily lunch breaks of at least thirty minutes.

• Provide Proper Sick Leave – Depending on the number of employees on staff, companies may also be required to provide special leave for new parents, organ donors, members of the US Military, and victims of domestic violence or stalking.

• Pay Employees Minimum Wage – The minimum wage may be upped in regions where the cost of living is higher, such as in Los Angeles and San Francisco.

• Calculate Overtime Pay and/or Bonuses Properly – California state law stipulates that employees must be paid overtime whenever they work in excess of eight hours in one workday, 40 hours in one workweek, or seven consecutive days. And if more than one of these applies in a given workweek, the employer is required to pay whichever rate gives the employee a better payoff.

• Provide Suitable Seating Arrangements – This is currently a hotly debated topic in California law. While it’s intended to apply to any job in which the nature of the work lends itself to sitting, there’s a tricky gray area for industries like retail and banking. In these, employees typically stand while working but aren’t required to do so.

• Providing Commuter Benefits – This applies to companies located in large urban areas.

• Providing Paychecks Promptly – In California, when an employee is fired, they must be issued a paycheck immediately upon termination of employment.

An Additional Note for Fleet Managers

In some industries, employers are required to regulate prevention of injury and cell phone use while driving. This leaves fleet managers in the transportation industry with yet another potential labor code violation to worry about.

Experts on PAGA Law

In many of the scenarios listed above, it’s easy to see how an employer could violate California’s labor code by way of an honest mistake. This is especially true of fleet managers. With your employees constantly on the road, it’s extremely difficult to track things like breaks and overtime pay.

Thankfully, at the Trucking Proud Insurance Agency, we have resources that are experts on PAGA law, and we’re on your side. Count on us to help you ensure that your daily operation is free of potential labor code violations and the hefty fines that come with them.

Sources

“5 Important Steps to Protect Yourself from a PAGA Lawsuit” by Annie Pilon

https://smallbiztrends.com/2018/10/paga-lawsuit.html

“More California Employers are Getting Hit with PAGA Claims” by Jonathan Janove

https://www.shrm.org/resourcesandtools/hr-topics/pages/more-california-employers-are-getting-hit-with-paga-claims.aspx

“California Labor Laws: What Small Business Need to Know” by Laura Handrick

https://fitsmallbusiness.com/california-labor-laws/

PAGA Video

Great video put together by Tom Manzo of California Business and Industrial Alliance (CABIA). This helps explain just how scary PAGA is. It is literally causing business owners to file bankruptcy not just on their businesses, but personally as well. It has massive teeth:

Is your company using telematics to control risk?

#makingtruckingproudagain

Is Your Transportation Company Capturing The Most Impactful Driver Behavior Data to Effectively Mitigate Risks

As a fleet manager, no matter how many times you review safe-driving guidelines with your drivers in person, you can’t go with them on their route to supervise their driving and enforce safety standards. Or can you? Cutting edge driver data technology from industry leader, Netradyne, enables fleet managers to see their trucks in action and understand precisely what’s going on around them. 

Read on to learn how this extraordinary innovator in driver data technology can help your company save money, eliminate the worry of false claims, and most importantly, ensure the safety of your drivers on the road.

Why Driver Data is Important

Being aware of both the habits of your drivers and the incidents they experience during their route is essential to your fleet management operation for several reasons:

• It Cuts Fuel Costs – Idling for extended periods of time, accelerating rapidly, and slamming on the brakes of a truck all share one thing in common. They’re big-time gas guzzlers. Course-correcting all the above with your drivers will save you truckloads on fuel costs, especially as gas prices continue to rise.

• It Saves You Money on Insurance – The more frequently your drivers complete a route safely without any issues, the better your chances of scoring a lower insurance rate with a trucking insurance company. If your drivers maintain clean driving records, it also greatly reduces the cost of insurance claims if an incident does occur.

• It Could Prevent Serious Consequences – Short of an alien spaceship landing on the highway, trucks are the largest moving objects on the road. And as such, they’re the most dangerous. When you’re able to give your drivers specific instructions about what not to do behind the wheel, you encourage safe driving habits that mitigate the risk of future harmful, perhaps even fatal, accidents.

The Major Problem With Using Standard GPS’s to Collect Driver Data

Many fleet managers rely on standard GPS tracking systems to collect driving data. And that’s a crucial mistake.

Why? Because most GPS units are programmed to capture “change of inertia”—circumstances like hard braking, lane departure, and collisions. But without a video component, standard GPS users are left with a whole bunch of stats and zero context to shed light on them.

How Netradyne is Changing The Game

The Trucking Proud Insurance Agency utilizes cutting-edge fleet management software from Netradyne, the first driving technology to combine artificial intelligence with high-tech video and intuitive onboard sensors. With Netradyne, you can capture the full driving experience to bring you meaningful, comprehensive data.

Whereas most driver technology platforms are only capable of uploading videos to the Cloud for later viewing, Netradyne’s signature Driveri technology platform can process data in real-time. Plus, it comes with up to 100 hours of storage. This enables you to observe your drivers in real-time and experience their route almost as if you’re riding shotgun next to them. 

But Driveri offers far more than just live video. It also comes equipped with the following features:

• Portal – The Driveri Portal brings you valuable, real-time metrics about your drivers’ following distance behind other cars on the road, their response to traffic signals, and their current driving conditions—including details as minute as the texture of the road. The Portal also sends both you and your drivers customizable instant alerts. This lets you choose which specific actions you want to focus on with your drivers. Talk about painting a complete picture.

• 360-Degree View – Driveri’s cameras provide a live view through the driver’s front windshield that identifies all potential risks. Additionally, the camera lets you see through the truck’s side windows, and even gives you the option of setting up a third angle on the driver, so you can observe their behavior behind the wheel. You’ll see everything that’s happening from every angle, both inside and outside of the truck.

• Driver Recognition – Conversations with your drivers shouldn’t just be rooted in constructive criticism. You should also reward your drivers for the things they do well. Driveri’s unique recognition system notifies you when your drivers hit certain safety milestones so that you can make sure to high-five them later.

• High-Definition Maps – Thanks to commercially deployed Driveri devices, you’ll be given an in-depth overview of both the area surrounding your driver’s trucks and the places where your trucks are headed.

Goodbye, False Claims!

In addition to lessening the chance of an accident, Driveri’s capacity to record and contextualize eliminates the possibility of another driver on the road filing a false claim that sends your insurance rates through the roof.

Drivers will have a tough time convincing anyone that one of your drivers made a mistake when a 360-degree, high-definition video proves otherwise.

Get Netradyne For Your Fleet

When it comes to fleet management, an informed operation is a successful operation. And it doesn’t get more informed than when Netradyne’s unrivaled Driveri platform covers every square inch of your drivers’ routes.

To back your fleet of trucks with driver technology that boosts morale, mitigates risk, and gets rid of false claims altogether, call the Trucking Proud Insurance Agency today!

Sources:

“How AI is Protecting Fleet Equipment” by Aaron Marsh

https://www.fleetowner.com/technology/how-ai-tech-protecting-fleet-equipment

“How AI Can Help Drivers Avoid Reckless Speeding” by Pooja Singh

https://www.entrepreneur.com/article/331202

“Artificial Intelligence Can Help Drivers Subconsciously Stay Away from Reckless Speeding” by Vishnu Rajamanickam https://www.freightwaves.com/news/insurance-and-risk-management/artificial-intelligence-can-help-drivers-subconsciously-stay-away-from-reckless-speeding