COVID-19 Disruption Continues to Affect Freight, Rates

The economies and nations are yet to recover from the sudden loss due to the global pandemic of Covid-19. And adding to the slow recovery phase, some countries have started their unlock strategy by which the companies witnessed an unusual demand for goods. The impact of Covid-19 on the freight industry is quite visible across the world, showing a downward trend. The Government announced the shutdown, and the trucking industry came to a near standstill except for essential goods’ transportation.

The logistics chains are going through unusual massive losses from the Covid-19 effect. The disruption is both from the demand and supply side—the industrial sector, which was already in a slow-growth pre-pandemic but has now seen a drastic downfall post-pandemic. The production and manufacturing activities are down by 8% from February and the shipment of durable goods by 6%. Since the Chinese economy is highly powered in the global economy, the epidemic has a broader impact on international supply chains.

The trucking industry has to face significant shipping constraints amidst the global pandemic as there has been a high demand for goods from high hotspot areas. Regarding crew and passenger health, difficulty with crew changes, or the staff refuses to go to an affected area. There have also been extended delays in subsequent ports, with cargoes being left unloaded or discharged. Adding to this, one of the most significant indicators of the disruption of Covid-19 in the supply chain industry is the inventory to sales ratio. Stocks relative to sales in retail showed the lowest figures in June by a long shot. The shutdown of factories and workforce scarcity to re-stuff cargo and drivers to operate trucks for cargo evacuation has derailed the trucking industry’s smooth trade functioning. The low inventory figures put pressure on the movement of daily goods like how to stuff into the retail arena and how to restock. The result is a cumulative loss of $9 trillion to the world’s global GDP, and the world trade has witnessed a decline of 32%. The ports have seen a fall in traffic with a delayed turnaround time of 12-14 days, previously just three days.

As estimated, the significant share of truck drivers has gone to their native places, and there’s a lot of restrictions on inter-state and Intra-state movement. This has also triggered a spike in freight rates.  Increased costs and panicked customers create a significant problem in the freight transportation and logistics market, says Susan Beardslee, Principal Analyst at ABI Research. Global air cargo volumes were down by 9% in the last month. New restrictions on passenger travel from Europe and the United States have further affected the air cargo capacity. All of this adds to the already current decreases due to the China- U.S tariff tensions.

Covid-19 disruption in shipping rates and operations

  • In 2020, the spot market has been on a wild ride – says Avery Vise, Vise President of Trucking. During the quarantine days of demand and panic buying, the groceries, toilet paper, and similar essential items were high for a brief period. Then things fell apart in April. Loads were down with rates going down nearly 25% in the April-mid.  One of the reasons why spot rates are currently high is that the capacity is now tight. The full sing operation of drivers hasn’t started yet. Other contributing factors include:
  • Freight carriers are slow to bring back their drivers because of uncertainty about whether the current surge in demand will continue or not.
  • With Federal assistance such as extra payments during unemployment, stimulus checks, PPP loans, some drivers feel less pressure to get back to work amidst this critical pandemic period.
  • The new drug and alcohol clearinghouse that has come into effect in January shows that about 29,000 drivers have been tested positive or refused to attend tests through July.
  • Considering the social distancing and COVID-19 safety measures, the Commercial Vehicle Training Alliance saw 40% fewer commercial driver’s licenses issued this year. This implies that there will be fewer drivers coming into the market this year.
  • Amidst the global Coronavirus pandemic, some temporary and permanent retirements as older drivers do not take up the risk to continue the job.
  • The existing drivers are calling out for double payment due to the risk involved.

Effect of COVID-19 disruptions on truck drivers

  • Commercial truck drivers are exempt from the non-essential business closures and were requested to stay-at-home implemented by most states.
  • Truck drivers have reported long wait times at pickup and delivery points due to shortage of on-site personnel ad busier receiving schedules.
  • Truck drivers are less willing to take loads to supply at hotspot areas causing spot market and hoc rates to climb.
  • Amenities like food, water and restroom are becoming a challenge for truck drivers, especially, when they are at interstate shipment.
  • There has been a massive volume drop in the lanes that have freight trailers.
  • Less Than Truckload (LTL) freight cannot be held in destination terminals due to limited space, resulting in extra fees. Hence many LTL carriers are returning freight less than one day after a load cannot be shipped to a closed facility.

What can transportation companies do to keep their goods moving to the market?

Accepting this new normal and working with the existing workforce using the following short-term action plans can help trucking companies control the situation:

  • Activate emergency plans – activate your emergency transportation and logistics response techniques. With disaster control towers and emergency response teams, you can handle the unforeseen emergencies like Covid-19 and its impact on the trucking business.
  • Communicate with carriers – talk with your transportation and logistics providers to analyse their situations and understand the potential impacts of your supply chain, if any. Maintaining a daily or weekly communication with the carriers ensures an updated status of the changing circumstances.
  • Stay informed on Federal and State regulations – during these uneven crises, the Federal and State develop laws that impact the trucking industry. These include travel restrictions and national emergency declarations.
  • Consider fleet strategies – assess alternative fleet strategies to cope with the driver and truck shortage. You can select alternative fleet strategies that provide additional capacity to your truck fleet.
  • Embrace new technologies that drive automation – due to changing needs, the urge to have an automated system can simplify the tasks more cost-efficiently. Transportation plays a vital role in customer service. There’s a series of processes that embrace new logistics technologies that include the right place, right time delivery, and non-defective product delivery. This will enable customer-centric requirements of anywhere reporting at anytime reporting. Thanks to Matrack GPS tracking devices, the freight manager knows whether the driver and assets are safe.
  • Enhance distribution capabilities – avoid complicated distribution channels and establish quick alternative fulfilment models. This includes investment in real-time GPS tracking solutions and electronic logging devices that save hours of IFTA tax filing time.

That being said, shippers need to evaluate options and model changes across various transportation modes to avoid delays, interruptions, and significant price hike. Both retailers and manufacturers need to develop prioritization plans for customers that meet with the set limits. Systems integration in line with the advanced tracking systems should be implemented wherever possible. This includes ERP, TMS (Transportation Management System), WMS (Warehouse Management System), and predictive analytics and scenario modelling.

Why choose Matrack for your changing logistics needs?

With the cutting-edge technology providing customer satisfaction, Matrack has been the leading provider of GPS fleet and asset tracking solutions for the past 12 years. Serving the industry by providing advanced tracking solutions for both individuals and businesses, Matrack holds a reputed brand in the fleet tracking industry. Whether your fleet size is small or big, the Matrack trailer tracking devices help assess where your vehicle is and when they require maintenance. When your fleet and driver are beyond your ability to see, the Matrack real-time monitoring devices let you know what is happening. You can also be assured of your driver’s and cargo safety. Thanks to the Matrack dispatch solution that provides real-time visibility into mobile applications, the fleet manager can guarantee that everything is fine and functioning properly.

Benefits of buying Matrack trackers for your fleet

  • All Matrack devices are waterproof and weatherproof
  • Tamper-resistant
  • 1-year warranty
  • email and SMS alerts
  • Speedy asset recovery in case of theft or vehicle breakdown
  • Aggressive tracking mode to find the lost cargo in case of any emergency
  • Dedicated 24/7 technical support in the back-end process
  • Roadside assistance provides the shortest and traffic-less route.

The Matrack ELD is another technologically advanced system solution for trucking companies to facilitate accurate reporting and efficient streamlining of business reports. The Matrack ELD is an electronic logging device that is easy to install and use by the driver. This FMCSA approved DOT compliant electronic logging device is Bluetooth compatible and features voice-recognition for making status changes. The loading and unloading procedures from start to end, the fleet companies can keep track of their freight operations, thereby strategizing alternate plans for unforeseen continencies.

FMCSA Extends Regulatory Waiver For Drivers Responding To COVID-19 Emergencies

As a result of the Coronavirus pandemic, the Federal Motor Carrier Safety Administration (FMCSA) has extended the emergency declaration no: 2020-002 through Dec.31.2020. FMCSA grants regulatory waiver that applies to interstate and intrastate commercial driver’s license (CDL) and commercial learner’s permit (CLP)holders and other interstate drivers operating commercial motor vehicles (CMVs). The Declaration was issued late Friday and is the first multi-month extension of the HOS exemption since the order was initiated in March. The five previous extensions lasted until the following month with the last set to expire on September 14. 

FMCSA is continuing to extend the regulatory waiver because of the presidential Declaration about national emergency and is needed to support the direct emergency assistance for some supply chains. The extension addresses national emergency conditions that create a need for immediate transportation of essential supplies and also provides necessary relief from federal regulations for motor carriers and drivers.

Who is applicable for FMCSA’s extended regulatory waiver?

  • Interstate and intrastate commercial driver’s license (CDL)
  • Commercial learner’s permit (CLP) holders
  • Interstate drivers operating commercial motor vehicles (CMVs)  

The exemption gives drivers and carriers regulatory relief and flexibility to move certain products and cargo in support of joined efforts related to Covid-19. According to FMCSA, this exemption applies to the shipment of the following supplies:

  • Livestock and livestock feed
  • Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19
  • Supplies and equipment required for community safety, sanitation and prevention of community spread of COVID-19. These include masks, gloves, soap, sanitizers and disinfectants. 
  • Food, paper products and other groceries that are essential for emergency restocking of distribution centres or stores. 

This FMCSA extension is not applicable for routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration. 

The employer’s role

Employers must continue to select drivers at the required rate of 50% of their average number of driver positions for controlled substances and 10% for random alcohol testing during the calendar year 2020. If a test is unable to be completed due to the COVID-19 public health emergency, the motor carrier must maintain written documentation of the specific reasons for non-compliance. 

For instance, employers should document closures or restricted use of testing facilities or the unavailability of testing personnel. Besides, employers should also register actions taken to identify alternative testing sites or other testing resources. 

Similarly, employers who are unable to ensure the dates for administering random controlled substances and alcohol tests are spread reasonably throughout the year should document the specific reasons why they did not meet this requirement. 

Emergency declaration details – restrictions and limitations

The Federal Motor Carrier Safety Administration (FMCSA) had set an Emergency Declaration in response to the Coronavirus pandemic to ease out the pressure building on fleet companies and truckers that directly assist the current situation.

By execution of this extension to Emergency Declaration 2020-002, motor carriers and drivers providing direct assistance to a national emergency are not granted emergency relief from FMCSA. They must continue to comply with the FMCSA’s following regulations and conditions:

  • Motor carriers and drivers providing direct assistance in support of relief efforts for COVID-19 outbreaks are granted emergency relief from Parts 390 through 399 of Title 49 Code of Federal Regulations. 
  • This includes transportation and immediate needs for relief items, including medical supplies, food for emergency restocking and persons necessary for providing medical or emergency services. 
  • If a driver informs his motor carrier company that they require immediate rest, then the driver must be permitted at least ten consecutive hours off duty. 
  • Operation of a CMV while a driver’s ability to drive is impaired or likely to become impaired, through fatigue, illness or any other cause making it unsafe for the driver to begin or continue operating the commercial motor vehicle. 
  • The motor carrier or fleet companies shall not require or allow fatigued drivers to operate a commercial motor vehicle. 
  • Prohibitions relating to texting while driving and using a hand-held mobile phone while driving. 
  • A motor carrier whose driver is involved in a crash while driving under this emergency declaration must report any recordable crash within five business days, by phone or in writing to the FMCSA Division Office where the motor carrier is domiciled. The carrier must report the time, date, location, vehicle ID and a brief description of the crash. 
  • The direct assistance relief is terminated when a driver or CMV is used in interstate commerce to transport cargo or provide services that are not related to emergency relief efforts of COVID-19. Or, when the motor carrier dispatches a driver or CMV to another location to begin operations in commerce. 
  • This waiver does not apply to medical examiner’s certificates issued initially for less than 90 days. 
  • Lastly, FMCSA reserves the right to revoke this waiver for driver’s involvement in crashes, motor carrier’s failure to report accidents and driver’s failure to comply with the restriction of this waiver. 

The driver doesn’t have to carry the Declaration in the vehicle with them while driving. However, it is recommended that the drivers and carriers keep a copy of the Declaration, which is easily accessible. It must also be noted that the FMCSA Emergency Declaration does not provide relief from Canadian HOS regulations. When a driver is moving from emergency support efforts to normal operations, a 10-hour break is required when the total time a driver operates conducting emergency relief efforts, or a combination of emergency relief and regular operation equalling to 14 hours. 

Restrictions and conditions of the regulatory waiver

This waiver covers states, CDL holders, CLP holders and interstate non-CDL CMV drivers for the period starting at 12:00 am on October 1, 2020, through 11:59 pm on December 31, 2020.

  • The waiver does not apply to a CDL or CLP holder if the driver’s license or permit has expired before March 1, 2020
  • The waiver becomes void to a non-domiciled CLP or CDL holder if the non-domiciled driver’s legal presence is invalid.
  • This waiver is not eligible for a CDL or CLP holder if the driver’s privileges have been suspended or withdrawn for traffic offences. 
  • Drivers who are claiming relief from this waiver must have proof of a valid medical certificate and any required medical variance following the periods of eligibility set forth above. They should also carry a xerox of their expired medical certificates. 
  • New drivers who have never obtained medical certification cannot cover under this waiver. This is also applicable for drivers who cannot produce evidence of a prior medical accreditation under the periods of eligibility mentioned above.
  • FMCSA’s regulatory waiver does not apply to medical examiner’s certificates that are originally issued for less than 90 days. 

As a fleet owner or manager, it is crucial to follow the FMCSA rules and regulations that continue to change to adapt to the pandemic situation. As a result, the agency encourages drivers to obtain their renewed licenses and medical certificates and also encourages SDLAs to bring their operations back to normal as soon as practicable, in respect with all applicable Federal, State and Local laws and guidance before December 31, 2020. 

Matrack in response to the FMCSA extension

Concerning the FMCSA regulation and extension, Matrack as a fleet company follows all the requirements, violation warnings, laws and rules. “Constant changes in the FMCSA regulations are bound to be part of the pandemic situation. We promise to keep our customers updated” says Cam Smith, VP at Matrack. You can also check the latest updates on asset and fleet tracking news at Matrack. The Matrack GPS trackers are one among those best-in-class trackers available for tracking your valuable assets and fleet. 

Young drivers To Get Training For Interstate Commercial Driving Through FMCSA’s New Pilot Program

On September 4th 2020, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration announced a historical proposal that would bring several economic benefits to the transportation industry as well as create enormous job opportunities. FMCSA proposed and asked for public comments on its new pilot program that would allow drivers under the age of 21 (18, 19 and 20 year olds) to operate CMV for interstate commerce.

The decision has been enthusiastically welcomed by the American Trucking Association, Truckload Carriers Association and others. David Heller, vice president of TCS said that they “will be submitting comments in support of the proposed pilot program, as it represents yet another opportunity for our industry to highlight the safe driving practices and accident reduction technology that professional truck drivers use on our roads today. This pilot program should provide meaningful data regarding the driving force of our industry that adds to the already tremendous support to further examine allowing younger drivers, ages 18-20, to operate on our highways.”

Chris Spear, ATA president and CEO also voiced his support and commended Trump administration for moving ahead with the new pilot program. He said, “This is a significant step toward improving safety on our nation’s roads, setting a standard for these drivers that is well beyond what 49 states currently require. This is an amazing block of talent with unlimited potential. If our freedom can be defended from tyranny around the world by our men in women in uniform, many well below the age of 21, then it’s quite clear that we can train that same group how to safely and responsibly cross state lines in a commercial vehicle.”

Proposal Timeline:

2018 July – FMCSA introduced a pilot program open to current and former military personnel between the ages of 18 and 20. Eligible drivers must have undergone specified heavy-vehicle driver training while in service and be sponsored by a participating motor carrier.

2019 February – The DRIVE-Safe Act or Developing Responsible Individuals for a Vibrant Economy Act was reintroduced in House of Senate. It proposed to lower the age requirement for interstate drivers to 18 as long as drivers under the age of 21 are participating in an apprenticeship program that includes separate 120-hour and 280-hour probationary periods, during which younger drivers would operate CMVs under the supervision of an experienced driver and must achieve specific performance benchmarks before advancing.

2019, May – FMCSA published a Federal Register notice requesting public comments on a possible new pilot program to allow drivers aged 18, 19, and 20 to operate commercial motor vehicles in interstate commerce. The May 2019 notice asked specific questions regarding training; qualifications; driving limitations; operational and participation requirements; insurance; research and data; and vehicle safety systems that should be considered in developing a second pilot program for younger drivers.

2020 September – FMCSA Proposes New Under-21 Commercial Driver Pilot Program

What is in the proposal?

In the Federal Register notice, the FMCSA requests public comments on a new pilot program that would allow younger drivers to operate in interstate commerce. The pilot program is open for drivers to participate if they fall within two categories:

  • Young drivers between18- to 20-year-old with commercial driver’s license (CDL) having experience in operating CMVs in interstate commerce while taking part in a 120-hour probationary period and a subsequent 280-hour probationary period under an apprenticeship program established by an employer; or
  • Young drivers between 19- and 20-year-old with CDL having experience in operating CMVs in intrastate commerce for a minimum of one year and 25,000 miles. Keeping their safety in mind, the study group drivers would not be allowed to operate vehicles hauling passengers or hazardous materials or special configuration vehicles.

In the Unites States, currently, 18-20 year old CDL holders are allowed to operate commercial motor vehicle within the borders of the state in 49 states and the District of Columbia. Under-21 drivers in these states can operate CMVs in intrastate commerce if they hold a commercial driving licence. 

The FMCSA’s new proposal also ensures the safety of the drivers. FMCSA’s Deputy Administrator Wiley Deck said, “This action will allow the Agency to carefully examine the safety, feasibility, and possible economic benefits of allowing 18 to 20-year-old drivers to operate in interstate commerce. Safety is always FMCSA’s top priority, so we encourage drivers, motor carriers, and interested citizens to review this proposed new pilot program and share their thoughts and opinions.”

Benefits of the proposal:

The proposal has amassed significant support as it seeks to solve several problems at once. Here is how the transportation industry will benefit from this program:

  • The program would provide new opportunities for young people to enter the labour force and strengthen the economy.
  • In the past decade or so, there has always been a shortage of drivers in the transportation and fleet industry. With many old drivers thinking of retiring due to the pandemic, recruiting younger and new drivers will bridge the gap, allowing the industry to operate at full potential.
  • Instructing safety standards and responsibility at a young age ensures better driving behaviour, creating a better-prepared and much safer driver.

The International Foodservice Distributors Association (IFDA) also came forward to show their support to the program. In a statement, they said, “the program would provide a path to bring needed younger drivers safely into the industry as aging drivers retire and growing online purchasing increases long-term freight demand. The trucking industry is a good paying career choice for America’s emerging workforce. Training programs like this are critical game changers for not only developing a highly skilled workforce but also creating pathways to financial stability— without the need to incur college debt.”

The opposition:

When the FMCSA first came up with the idea of new pilot program for younger drivers, it was met with severe opposition from the Owner-Operator Independent Drivers Association. According to them, younger drivers lack overall experience and are less safe behind the wheel than more seasoned colleagues, and hence should not be allowed interstate commercial travel. “Launching this pilot program would go against FMCSA’s goal of improving highway safety,” OOIDA President and CEO Todd Spencer said in the release. “The agency should not be used as a tool for large motor carriers to expand their driver pool instead of fixing the problems that have led to their extremely high turnover rates. If highway safety is the priority, the age should go up, not down. Instead of efforts to entice the least experienced, the focus should be hiring and retaining the most experienced drivers, not expanding the funnel or driver churn.”

Voicing the same apprehension, International Brotherhood of Teamsters General President Jim Hoffa said, “The program is of grave concern to those who use the roadways as their workplace.  It could potentially jeopardizing the safety of all road users.”

To read more about the proposal, click here.

As a part of fleet industry, Matrack Inc. believes that the program will definitely create a better drivers, thereby ensuring safety on the road. We support the new pilot program as it lines up with our vision – to make commercial interstate driving safer, a vision we inculcate while designing our GPS tracking, ELD and other Fleet management products and services. The safety of your vehicle, assets and your drivers is given the utmost priority through the best and latest of technology. We create GPD and ELD solutions that are practical, smart and seamless. We also offer 24/7 tech support to all our clients.

For more updates on FMCSA’s new pilot program for under-21 CDL drivers, follow this page.

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