What the Infrastructure Bill Means for Freight Trucking

Topic preview:

• Physical Freight Infrastructure Investments
• Driver Shortage Solutions
• Truck Driver Protections
• Carrier Fees

One of the primary goals of the The Infrastructure Investment and Jobs Act is to repair and maintain infrastructure that plays a crucial role in the trucking and logistics industry. As the crack in and subsequent closure of the Hernand DeSoto Bridge in Memphis highlighted, much of America’s physical infrastructure is nearing or past its expected service age. This reality poses a growing risk for American freight movement and, in turn, the greater American economy.

The legislation aims not only to improve existing physical infrastructure, but also to target other problem areas for the trucking industry: the current driver shortage, the shift to electric vehicles, truck driver safety, and more. The bill passed the Senate and, in light of recent events, is on the brink of a vote in the House of Representatives. 

As such, we wanted to take the time to lay out what the bill will be doing to help truck drivers and the entire trucking industry, as well as touching on places where truck drivers feel the bill does not go far enough. 

 

Physical Freight Infrastructure Investments

The infrastructure bill sets aside a large amount of money to invest in the creation and repair of infrastructure that is critical to the logistics industry.

• $40 billion is earmarked for the repair of existing bridges over the next five years. 
• $66 billion has been allocated to improve the American railway system, focusing on both freight and passenger rail. 
• $7.5 billion will be spent creating a nationwide network of electric vehicle charging stations, intended to help aid with the transition away from internal combustion engines. 
• $7.15 billion is allocated for the National Highway Freight Program and doubles the amount of roadway states can designate as both rural and urban critical freight corridors. 

Alone, these four projects represent over $120 billion in investment in infrastructure that is critical to the movement of freight throughout the United States.

As more of our roads and bridges reach their expected service age, it is imperative that the country get ahead of repairs to prevent more headaches and unnecessary costs for the trucking industry. Coupled with the investment in bridge repair, the expansion of the National Highway Freight Program will allow states to determine which lanes are most important to their freight ecosystem and provide direct funding for those corridors. 

The investment in rail improvements will also increase the nation’s freight capacity. Expanding access to rail freight will potentially have a positive impact on shippers, who might find themselves with cheaper, viable freight options that aren’t OTR freight. This may end up pushing trucking revenue down if rail freight becomes a better option for more shippers, but no major change will take place in the short term. This capacity increase will also hopefully mitigate future freight bottlenecks in Chicago, such as the recent backup that occurred at the end of July. 

 

Driver Shortage Solutions

One major issue facing the trucking industry is the increasing shortage of qualified drivers. The majority of truck drivers in the United States are over the age of 45 and the COVID-19 crisis prompted many truckers to leave the industry. To address the growing shortage, the infrastructure bill is creating various programs to bolster the driver workforce. 

The first is a new apprenticeship program for truck drivers under the age of 21 that will provide them experience with interstate freight, which was previously not legal in all states. In the near-term, expanding the lanes that truck drivers under the age of 21 can drive will inject more supply into the carrier market, helping shippers find a truck more easily. Allowing young truckers to gain experience and earn money earlier in their careers will more effectively highlight the benefits of a long-term career in the industry. 

The bill will also fund public service campaigns highlighting the benefits of a career as a truck driver, aimed at young professionals to consider freight careers.

Finally, the bill will create a Women of Trucking Advisory Board which will be tasked with researching and providing solutions for the gender gap in freight trucking. Currently, women account for only 6.6% of freight truckers. As such, there is huge potential to add truck drivers to the industry by targeting and attracting more women to become truckers. 

As the trucking industry grapples with the increasing disparity between driver demand and driver supply, taking steps to entice new drivers into the workforce is a welcome move. However, one of the biggest issues throttling driver supply was left unaddressed: the current annual turnover for long-haul truck drivers is over 90%, and has been as high for decades. This implies a significant population of qualified truckers having left the industry for the sidelines. The bill includes no provisioned resources or initiatives directed at getting those truckers back on the roads or attempting to resolve the issues that drove them away.

 

Truck Driver Protections

The Infrastructure Investment and Jobs Act contains legislation centered on improving the safety of commercial vehicles for both truck drivers and other roadway users. First, it will implement, over a two year period, a mandate for all new trucks to be equipped with Automatic Emergency Braking (AEB). Though most new trucks are already being manufactured with driver aids such as AEB, this legislation will institute a legal requirement on the grounds of driver safety. 

The addition of an AEB mandate will not cause major changes to the daily lives of truckers. This is because it will not mandate the integration of these systems into older tractors. Putting the mandate in writing is simply another small step in shifting the industry towards driver aids and protections.

Additionally, the bill will authorize various studies on driver safety and protections. The first aims to determine the major causes of accidents involving commercial trucks. The second investigates certain predatory lease-purchase practices for tractors, with the goal of mitigating some financially ruinous practices in the trucking industry today.

The two studies could significantly impact the future of the trucking industry, but how they affect the day-to-day lives of truckers will not be clear until their findings are published. Truck driving will become a more enticing career choice if truckers are able to enter the industry safely and are not forced to shell out their hard earned revenue to predatory lessors. The crash study could have more diverse impacts, from more driver aid mandates to even stricter hours-of-service regulations. But again, only time will tell what effects the trucking industry will feel.

Unfortunately, the bill passed by the Senate does not include any funding to increase the availability of tractor trailer parking along highways and interstates. The original bill contained provisions to add truck parking spaces, but that provision was lost when the bill was trimmed from its original $4.5 Trillion proposal to the $1 Trillion bill that passed in the Senate. 

Truck drivers have been left frustrated by the removal of safe parking funding, noting that safe parking spaces are necessary for the safe and efficient movement of freight, especially with the recent emphasis on enforcing hours-of-service regulations. The refusal to increase safe parking capacity seems counterproductive considering some of the major focuses of the bill. Neglecting truckers’ needs for safe places to park and rest not only endangers roadway users, but increases the everyday frustrations for current and future drivers. 

 

Carrier Fees

The only major change to carrier costs will come in the form of a Vehicle Miles Travelled (VMT) tax pilot program. This will institute a trial program that taxes vehicles per mile, essentially taxing vehicles for how frequently they use public roadways. The VMT tax is being trialled to potentially replace the current gas tax, which could become less effective in the face of rising electric vehicle production and use. 

The VMT presents positives and negatives for the trucking industry. Though there have been trials of a VMT system on the west coast of the U.S., it could potentially mean more red tape for carriers to wade through. That being said, replacing the gas tax could help keep gas costs, and thus carrier costs, lower on a day-to-day basis. This could ease some of the general financial burdens on truck drivers and owner-operators. Additionally, the lack of other carrier fees will hopefully prevent the costs of tractor trailer operation from spiraling too far out of control, helping to protect truckers and keep them in the industry longer.

 

Current Outlook

The House of Representatives voted to pass the budget resolution bill on August 24th. This paves the way for a vote on the $1 Trillion Infrastructure Investment and Jobs Act in the second half of September, which should be a relative lock to pass. With this development, it is becoming increasingly more likely that United States infrastructure will be receiving a large, and some would say much needed, investment in its long term future. That being said, we do predict an even tighter squeeze on freight capacity and driver availability in the near term. As the infrastructure bill funds public works projects across the country, be prepared for more drivers to potentially leave the trucking industry to take advantage of these new jobs that are created.

 

How MVMNT Can Help

MVMNT provides a digital freight marketplace that gives shippers access to over 56,000 carriers and allows carriers to find more favorable lanes. MVMNT also provides end-to-end freight management, handling every step in your shipment’s lifecycle from freight procurement to invoice tracking and payments.

For shippers, the expansion of your carrier network will allow you to field more bids on your annual RFPs and find more spot freight for last-minute shipments. MVMNT also allows you to track the compliance of every carrier in your network with daily updates and notifications. After your cargo is delivered, we provide your carrier with a quick pay option directly on our platform, allowing your carrier to be paid quicker and you to build better relationships with your network.

For carriers, MVMNT offers access to more shipments on more lanes. You can search for any load that travels within a set distance from your house, allowing you to find more favorable shipments. You also gain access to more shippers, letting you take advantage of more loads and pick the shipments you want to carry.