New Petition Demands Help for Small Business Truckers to Pay Truck Loans and Insurance
San Francisco, CA – A major provider of electronic logging devices (ELDs) has launched a new petition demanding legislation to provide forgiveness to truckers who are unable to pay their truck/trailer loans as well as insurance premiums.
The new petition launched by KeepTruckin’ (KT) is asking United States lawmakers to provide additional relief assistance to the recently enacted Payroll Protection Program (PPP).
As freight in large swaths of the country has plummeted primarily due to widespread shelter-in-place orders, KT says it has observed a 24% decline in vehicle utilization over the past 30 days.
According to KT’s network, which consists of more than 250,000 trucks, the West Coast and Northeast — regions that enacted shelter-in-place first — have seen a 38% and 31% decline in activity.
“The reduction in freight volume is compounded by a steep decline in rates,” the petition states. “Trucking companies are generating less revenue, while their fixed cost burden remains unchanged.”
KT reports that a recent survey of its customers revealed two sources of fixed costs were identified as “particularly high risk” amid this crisis, which are: 1) truck and trailer lease/loan payments, and 2) insurance costs.
In fact, KT says 37% of trucking company leaders surveyed expressed serious concerns about their ability to meet one or both of these obligations in the next three months.
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The primary problem with the PPP, KT argues, is that the loans are capped at 2.5 months of average payroll cost, which is not conducive to keep many small business truckers afloat during the ongoing COVID-19 recession.
“Trucking companies carry a high fixed cost burden relative to other small businesses. A loan capped at 2.5 months of average payroll cost will not be sufficient to cover driver compensation, truck and trailer lease/loan payments and insurance costs,” the petition asserts.
Additionally, the PPP does not provide forgiveness for truck and trailer lease/loan repayment or insurance costs.
“Trucking companies that avail PPP loans to fund their fixed cost obligations will be saddled with debt they will not be able to repay,” KT asserts.
Further, KT warns, “Without targeted economic and regulatory relief, many trucking companies will default on their lease or loan payments and risk losing their trucks. And those who fail to cover their insurance payments will lose their DOT authority.”
So, KT is asking for specific economic relief to be provided to small business truckers.
We ask the Federal Government to provide economic relief that addresses the unique circumstances that trucking companies face and recognizes the essential nature of their work. This includes basing federal loans on not just payroll, but also fixed cost obligations. And providing forgiveness for truck and trailer lease/loan payments, and insurance costs.
So far, the petition has garnered close to 15,000 signatures.
To read the entire petition, click HERE.
The irony, of course, is that many small business truckers blame the ELD mandate for helping contribute to the demise of many owner operators in the last two years.
The COVID-19 recession is further squeezing small trucking companies in what was already a freight recession.
KT has also not been immune to the economic damages inflicted by the coronavirus national emergency.
On March 31, KT laid off almost 20 percent of its workforce (349 workers), citing a dramatic reduction in vehicle activity among its 65,000 customers amid the COVID-19 pandemic.
Additionally, KT’s CEO, Shoaib Makani, said he would not be taking a salary during the pandemic, while two additional co-founders would be taking a 50 percent reduction in pay.
It was also announced that employees making more than $50,000 per year would see a 10 percent cut in pay, and nobody would receive 2019 bonuses.
For more on that story, click HERE.