Infrastructure Bill: How Will Trucking Companies Be Affected Positively (Growth?)
Apr 28, 2022 - Back to Blog
We've been hearing about this for a long time, but the United States Infrastructure Investment and Jobs Act was formally signed into law in mid-November. After months of conjecture about what will be included and what will imply for the transportation industry, we finally understand what to expect in the coming years.
The Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act) was passed by Congress as a once-in-a-generation investment in our nation's infrastructure and competitiveness. For far too long, lawmakers in Washington have celebrated "infrastructure week" without actually agreeing to construct infrastructure. The President committed to work across the aisle to get things done and restore our dilapidated infrastructure. This historic legislation is on its way to the President's desk for signature after the President presented his plan to do so and then reached an agreement with Members of Congress from both parties.
By making long-overdue improvements to our nation's ports, airports, rail, and highways, the measure will assist to alleviate inflationary pressures and strengthen supply chains. It will propel the development of well-paying union employment while also growing the economy sustainably and equitably, ensuring that everyone benefits for decades to come. When combined with the President's Build Back Framework, it will create 1.5 million jobs each year on average over the following ten years.
For more than 65 years in the trucking industry, we've seen several bills become law that impacted the industry, some major and some minor. We spent some time researching this most recent piece of legislation and have a fair notion of what the new legislation would imply for transportation. After all these years, we've figured out how to decipher certain intricate bits of legislation and explain what they represent to our customers.
$1.2 trillion bipartisan infrastructure bill was signed into law on November 15 by President Joe Biden. Over the following five years, the plan is expected to produce $550 billion in government infrastructure expenditure and create jobs across the country. Roads, bridges, mass transportation, rail, airports, shipping ports, and waterways will benefit from this spending. In addition, the package includes a $65 billion investment to improve the country's broadband infrastructure, tens of billions of dollars to modernize the electrical grid and water systems, and $7.5 billion to establish a nationwide network of plug-in electric vehicles chargers.
The law also includes the bipartisan DRIVE-Safe Act, which would remove one of the most significant barriers to attracting younger drivers to the transportation industry. This bill creates an apprenticeship program that will allow CDL holders under 21 years of age to drive a commercial vehicle in interstate trade legally. This will be a tremendous help to the industry, which is now suffering from a driver shortage. For years, the American Trucking Associations (ATA), Ruan, and other industry advocates have fought to pass this bill.
Mitch Landrieu, former New Orleans Mayor, has been nominated by Biden as a senior advisor to oversee the implementation of this infrastructure initiative. In addition to the new measure, Biden signed an executive order requiring that all infrastructure projects prioritize materials manufactured in the United States. These initiatives, when combined, are projected to make a significant contribution to the nation's economic recovery.
Millions of new jobs are predicted to be created in cities around the country due to this new bill's investment, enhancing America's global economic competitiveness and strengthening supply chains. The U.S. has needed to spend heavily on its infrastructure for a long time, with deteriorating highways at the top of the priority list. Poorly maintained roads and bridges increase vehicle wear and tear, cause delays, waste fuel, raise driver stress, and reduce overall industry output. The trucking industry, which transports 72.5 percent of the country's freight, is projected to be hit hard by this new regulation.
Infrastructure has been a contentious issue all year, with Democrats and Republicans unable to reach an agreement. The bill was initially passed by the Senate in August, but its future was uncertain while it was transferred to the House of Reps. It came up for a vote on November 5, and 13 Republicans broke ranks to support the bill, which has now become a bipartisan success.
"Roads and bridges aren't political; we all use them." When the bill passed, ATA President and CEO Chris Spear commented, "Those politicians who put their constituents ahead of themselves have now sealed a lasting legacy that the American people will see, feel, and utilize for many decades to come." The millions of hardworking Americans who make our country great triumphed today, from farmers to truck drivers.
More employment, safer roads, and bridges, cleaner water, faster internet, greener energy, and a better general environment may benefit everyone in the country. As the U.S. works to recuperate from the COVID-19 epidemic, now is the ideal moment to generate new employment, support critical projects, and rebuild stronger than before.
Trucking Reaction to Infrastructure Bill
Given the awful state of America's roads and bridges, not to mention the other huge improvements that would benefit freight transportation, it's no surprise that trucking industry groups have mostly applauded the Infrastructure Investment and Jobs Act. Almost immediately after the bill's passing on November 5, American Trucking Associations President and CEO Chris Spear issued a statement commending the bill.
What Should We Expect to Change?
In general, it's impossible to predict how much change the average owner-operator will notice in their usual truck routes after 2020. For starters, the Trump Administration's planned budget is not yet finalized. This document, like other presidential budget proposals, serves as a blueprint for Congress to use when creating their own official budget. In some ways, this plan serves as a beginning point for discussing budget adjustments with the American people, which can assist members of Congress in identifying the concerns of their constituents.
As per Jay Grimes, Director of Federal Affairs for the Owner-Operator Independent Drivers Association, certain provisions of the bill may have been suggested by the President as a starting point for future negotiations.
$810 billion in infrastructure financing would be a huge increase above prior legislation, and it is expected to be a major discussion point when it comes to the final budget that Congress agrees on. There is no discussion of where the cash for the infrastructure improvements will come from or whether economic growth will be sufficient to sustain the increased spending levels. The $50 million for the Moving America Safely and Efficiently Program is more likely to be included in the official budget because it represents a lower share of overall spending.
What Impact Will the Infrastructure Bill Have on the Trucking Industry?
The Infrastructure Investment and Jobs Act's major purpose is to repair and maintain the critical infrastructure of the transportation and logistics industries. As the Hernand DeSoto Bridge break and subsequent shutdown in Memphis are highlighted, most of America's physical infrastructure is reaching or past its intended life span. This fact poses an increasing risk to American freight movement and, by extension, the American economy as a whole.
The legislation intends to enhance existing physical infrastructure and address other issues facing the trucking sector, such as the present driver shortage, the transition to electric cars, truck driver safety, and others. The bill passed the Senate and is about to be voted on in the House of Representatives in light of recent developments.
Therefore, we wanted to take the time to explain how the bill would benefit truck drivers and the overall trucking industry and touch on areas where truck drivers believe the bill falls short.
Physical Freight Infrastructure Investments
The infrastructure bill allots a considerable sum of money to invest in the building and restoration of vital infrastructure for the logistics industry.
- Over the next five years, $40 billion is set aside to rehabilitate existing bridges.
- A total of $66 billion has been set aside to enhance the American railway infrastructure, focusing on both freight and passenger rail.
- A total of $7.5 billion will be invested to build a nationwide network of electric car charging stations to aid in the transition away from internal combustion engines.
- The National Highway Freight Program receives $7.15 billion in funding, which more than doubles the number of roadways that states can designate as rural and urban essential freight corridors.
The above four projects represent a total investment of more than $120 billion in infrastructure important to freight transit throughout the United States.
As more of the bridges and roads reach their estimated life span, the country must prioritize repairs in order to avoid more difficulties and unneeded expenses for the trucking industry. Along with bridge repairs, the expansion of the National Highway Freight Program will allow states to identify which highways are most vital to their freight ecosystem and give direct funding to those corridors.
The investment in rail improvements will help boost the country's freight capacity. Expanding access to rail freight may benefit shippers by providing them with less expensive, viable freight choices that aren't OTR freight. This may result in lower trucking income if rail freight becomes a better alternative for more shippers, but no significant change will occur in the immediate future. This capacity boost should also help prevent future freight bottlenecks in Chicago, such as the one that happened at the end of July.
Driver Shortage Solutions
The growing scarcity of qualified drivers is a serious issue for the trucking industry. Many truck drivers in the United States are over 45 years old, and the COVID-19 problem drove many truckers out of the profession. To address the rising driver shortage, the infrastructure bill establishes a number of measures to increase the driver workforce.
A new apprenticeship program is the first for truck drivers under the age of 21 that will offer them experience transporting interstate freight, which was previously illegal in all states. In the short run, extending the lanes that truck drivers under the age of 21 may drive will provide more supply to the carrier market, making it easier for shippers to locate a vehicle. Allowing young truckers to obtain experience and earn money earlier would showcase the benefits of a long-term career in the industry more effectively.
The bill would also support public service campaigns showcasing the advantages of a career as a truck driver to encourage young professionals to choose freight employment. Finally, the bill would establish a Women of Trucking Advisory Board, which will be entrusted with analyzing and proposing remedies to the freight trucking gender gap. Currently, women make up just 6.6 percent of freight truck drivers. As a result, there is enormous potential to increase the number of truck drivers in the industry by targeting and enticing more women to become truckers.
As the trucking industry grapples with the huge disparity between driver demand and driver supply, adopting measures to attract new drivers into the field is a positive step. However, one of the most serious challenges limiting driver supply has gone unaddressed: the current yearly turnover rate for long-haul truck drivers is more than 90% and has been for decades. This means that a significant number of qualified truckers have departed the industry. The plan makes no provision for resources or efforts to get those truckers back on the road or to remedy the challenges that pushed them away.
Truck Driver Protections
Infrastructure Investment and Jobs Act includes legislation aimed at increasing commercial vehicle safety for both truck drivers and other road users. First, it will implement that all new trucks be fitted with Automatic Emergency Braking over a two-year period (AEB). Even though most new trucks are currently equipped with driver aids such as AEB, this bill would create a legal obligation based on driver safety.
Implementing an AEB regulation will not have a significant impact on truckers' daily lives. This is because it will not need the integration of these systems into older tractors. Putting the mandate on paper is just another little step in the industry's transition toward driver assistance and safeguards.
The bill would permit additional research on driver safety and protection—the first aims to identify the key causes of commercial vehicle accidents. The second looks into various predatory lease-purchase methods for tractors to reduce some financially destructive activities in the trucking industry today.
The two studies could have a huge impact on the trucking industry's future, but how they affect drivers' daily life will not be known until their findings are revealed. Truck driving will become a more appealing career option if truckers can enter the industry safely and are not compelled to pay exploitative lessors for their hard-earned money. The crash study might have far-reaching consequences, ranging from increased driver aid standards to even tougher hours-of-service regulations. However, only time will tell how the trucking industry will be affected.
Regrettably, the Senate plan does not include any financing to expand the availability of tractor-trailer parking along roads and interstates. The original bill included provisions to create truck parking places. Still, those provisions were removed when the measure was reduced from its original $4.5 Trillion proposals to the $1 Trillion bill passed by the Senate.
Truck drivers have been left dissatisfied by the elimination of safe parking funding, citing the fact that safe parking places are required for the safe and efficient transportation of freight, especially with the current emphasis on enforcing hours-of-service regulations. Given some of the bill's key priorities, the unwillingness to enhance safe parking capacity appears counterproductive. Neglecting truckers' needs for secure locations to park and rest endangers other road users and adds to current and future drivers' daily frustrations.
The only significant change to carrier costs will be a Vehicle Miles Traveled (VMT) tax pilot program. This will implement a trial program that will tax vehicles based on their mileage, essentially taxing vehicles based on how frequently they use public roadways. The VMT tax is being tested as a potential replacement for the current gas tax, which may become less effective as electric vehicle production and use increase.
The VMT has both positive and negative implications for the trucking industry. Although there have been trials of a VMT system on the west coast of the United States, it may mean more red tape for carriers to navigate. However, replacing the gas tax could help keep gas prices, and thus carrier costs, lower on a daily basis. This could alleviate some of the financial hardships that truck drivers and owner-operators face on a daily basis. Furthermore, the absence of other carrier fees should keep the costs of tractor-trailer operation from spiraling out of control, thereby protecting truckers and keeping them in the industry for a longer period of time.
How Does New Infrastructure Affect Truck Drivers?
As per the National Bureau of Labor Statistics, semi-truck driving is a growing industry, and billions of dollars are invested in trucking logistics every year, implying that there is a lot of money to get trucks to their destinations as efficiently as possible. Infrastructure improvements can reduce traffic and hazard-based braking, increasing time efficiency and lowering fuel costs for long-distance trips. Much of the Trump administration's efforts have been devoted to shaping trade in the United States, with the goal of increasing interstate trade. This will have a continuous impact on the heterogeneous traffic of semi-trailer trucks across America, which means that certain infrastructure bottlenecks may become more noticeable as trade routes are affected.
Truck parking is low-cost infrastructure investment, and $50 million may go a long way toward boosting the frequency of truck stops on a route for an owner-operator. This certainly improves the comfort and convenience of truck drivers across the United States, and freight companies may regard the infrastructure enhancements as a green signal to expand.
After months of conjecture, we now know what the U.S. Infrastructure Investment and Jobs Act are, including funding for clean drinking water, broadband, roads and bridges, renewable energy, and more. You could be moderately impacted or significantly impacted, depending on your sector and the type of equipment you generally employ to transport your freight. Regardless of how difficult the implementation process will be, Congress has now done its part. America is ready to reinvest in itself, and the investment amount will only certainly increase.