Easing Supply Chain Issues and Tax Credits for Truck Drivers

The trucking industry is currently suffering from a major driver deficit. The industry as a whole is short by nearly 80,000 drivers, and there was a loss of over 8,500 jobs in the first quarter of 2023, according to the Bureau of Labor Statistics. Carriers are currently doing everything they can to increase the driver pool – from hiring younger people to offering higher wages and benefits. Last month, bipartisan legislation was introduced in Washington, DC that would not only ease supply chains, but also give tax incentives that would bolster the workforce for the trucking industry. The “Strengthening Supply Chains Through Truck Driver Incentives Act” may not have a catchy name, but if it is passed, it could ease supply chains, attract new drivers to the trucking industry, and ease cash flow issues for carriers.

Tackling the Workforce Shortage

The average age of truck drivers in the United States is 52. This is a worrying sign because more truck drivers are approaching retirement age, or already leaving the workforce. At the other end of the age range, trucking companies are facing challenges when it comes to retaining younger drivers for more than a year. More women, minorities, and veterans are being recruited by the trucking industry, but young people – who may not be enthusiastic about a career in trucking, or who simply do not know what they want to do for a career – remain a challenging demographic to reach and retain.

Tax Incentives for Truck Drivers

If there is one thing in common with workers of all ages, it’s money. The Strengthening Supply Chains Through Truck Driver Incentives Act would create refundable tax credits that would apply to both new and existing drivers. Drivers holding a valid Class A CDL who drive a minimum of 1,900 hours throughout the year would get a tax credit of up to $7,500 for both 2023 and 2024. New truck drivers, as well as those enrolled in a registered trucking apprenticeship, would also receive a refundable tax credit of up to $10,000 for 2023 and 2024. Additionally, all new truck drivers would be eligible for the credit even if they did not drive a commercial truck during the previous year, or drive at least 1,420 hours during the current year. In the last case, an average of 40 hours per week would be required for eligibility.

The Bigger Picture for the Trucking Industry

Tax incentives are a great idea, but the overall strategy of the Strengthening Supply Chains Through Truck Driver Incentives Act is designed for both the short and long-term future of the trucking industry. With half of the industry nearing or at retirement age, the industry needs younger drivers who are willing to commit to a career. The tax portion of the legislation will keep drivers on board for at least two full years. That will give new drivers the time and experience to settle in and realize that career in trucking offers opportunities and good pay. Secondly, the tax credits can help ease the financial strain some carriers were experiencing by struggling to raise wages just to recruit new drivers. Thirdly, the legislation would boost the middle class as a whole. Truck drivers would get a tax incentive, find long-term careers in the industry, and earn middle-class wages in a sector without needing to go into debt with a college education. This helps the economy and the people by growing the workforce from the middle-out, instead of from the top down.

Workforce Stimulation

Looking further down the road, the Strengthening Supply Chains Through Truck Driver Incentives Act allows for new trucking companies to emerge without placing a major strain on their bottom line through recruiting or payroll. The legislation cites that since the COVID-19 pandemic, the transportation of raw materials was the weakest link in the supply chain in the United States. By stimulating recruitment – and by extension the formation of new trucking companies, the industry may be able to reduce the driver gap and reinforce those weak links.

Single Point Capital offers a startup program for new trucking companies. We will offer guidance and take care of filing the right paperwork and permits so you can get your trucking company up and running quickly. We will even waive the administrative fees if you sign up for our freight factoring services. On top of that, we offer everything from fuel discounts to insurance down payment programs, so you can keep expenses down while maximizing your cash flow. Contact Single Point Capital today to get your trucking company started, and learn about our many other services.