What’s in it and what does it mean for you…
The Moving Forward Act is a $1.5T infrastructure package that was recently passed by the US House of Representatives. The bill includes an influx of cash for rebuilding roads, bridges, and transit systems along with funding for schools, housing, clean water, the postal service, rural broadband access, and more.
DigCargo supports many of the items in the bill that improve #trucking, such as the improvement of the country’s degrading infrastructure, making transit safer with added truck parking, and establishing federal mandates on detention. These types of actions, especially during the current shortfall of government funding due to COVID19 are welcome, will create jobs, create a safer infrastructure and assist the recovery of the US economy.
But…and it’s a big but (no pun intended)
The act also includes an amendment to hike truckers’ insurance coverage to $2M (from $750k). This requirement would be detrimental the backbone of the freight and brokerage industries, the small independent owner owners, drivers, and carriers. The 167% increase in required insurance coverage would make the premium payments out of reach for many carriers who have held the front line and continued through harsh conditions, historically low rates, and risk of their own health to keep this country moving during this COVID19 economy. Further, the increase in premiums would likely be shared with freight brokerages and passed on to their customers in the form of an increase in rates. This will put pressure on margins and freight shipping costs in an economy that’s already struggling.
#DigCargo joins the industry in opposing this amendment of this act as it will due further harm to the already struggling small, independent owner operators and drivers. Furthermore, it is disappointing this amendment lacks any sound basis of how the increased insurance requirement would make the roads safer. Just .06% of crashes result in damages exceeding $750k.
The OOIDA (Owner-Operator Independent Driver Association), the ATA (American Trucking Association), NATSO (National Association of Truck Stop Owners) as well as the major domestic railroads spoke out against this Act, which is unlikely to pass the Republican lead senate.
What do you think of this bill if it were to pass? How would your operation handle a large insurance premium increase? Even during good times, this would likely be a hard hit. Many independent owner operators would either shut down or be forced to drive for larger fleets. It’s likely that we’ll see smaller carrier operations folding or being acquired by the large carriers which would gain more of the freight market, making it even harder for independent drivers to stay independent. Brokerages and 3PL’s would take a hit as well, as their carrier pool would shrink, rates would rise, and their profit margin would shrink.
If your in agreement with #DigCargo on this bill, please contact your local congressman and let them know of your thoughts on this subject.