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An Overview of COVID-19 Related Government Orders that Impacted Transportation Companies (And that Could Qualify Your Business for the ERC)

The COVID-19 pandemic has been challenging for trucking companies and other transportation businesses. There are a wide range of government orders that have adversely affected the way that these companies operate. Created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Employee Retention Credit (ERC)allows qualifying businesses that were affected by a government order to claim a tax refund for up to $26,000 per employee. Here, our ERC specialists for transportation companies highlight some of the federal, state, and local government orders that adversely affected businesses in the industry and can be used to qualify for the ERC.

Know the Government Orders that Can Qualify Transportation Companies for the ERC

Cleaning and Sanitizing Requirements

During 2020 and 2021, businesses in the transportation industry were subject to heightened cleaning and sanitizing requirements. These restrictions can constitute a partial suspension that can qualify a business for the ERC. Here are some of the things that transportation companies owners, operators, and managers had to say:

  • Our workers had to go through temperature check stations at the warehouse. Due to the number of people going through the facility, it took an extended amount of time to have everyone go through the temperature scanner. Sometimes the scanner will malfunction, forcing an attendant to approach each driver with a manual temperature scanner, thereby adding more time to the wait.”
  • Drivers were also made to go through hand sanitizing stations. When the hand sanitizers ran out, they had to be refilled and this further caused delays in getting routes started.”
  • “Our drivers had to report to work around 2 hours earlier than normal in order to be able to go through all the social distancing protocols mandated by the government. This meant going through long lines for temperature check, hand sanitizing station and then individually loading their packages, rather than being helped by a warehouse staff. This put an unusual burden as the driver had to work alone without assistance due to social distancing guidelines. This disruption took a toll on a lot of drivers as this wasn’t the best way to do the job.”

Work-from-Home Orders and Other Social Distancing Requirements

Social distancing requirements made an impact on companies in trucking, logistics, Amazon deliveries, fedex deliveries,  and throughout the transportation industry. Indeed, social distancing rules impacted far more businesses than most people realize. Here is what a transportation company operator said:

  • Drivers were made to deliver packages far away from customers due to social distancing guidelines. This meant taking packages far away to a separate location in the customer’s property. This added a lot of time to the work. Sometimes the customers shut down their property due to COVID, this was particularly the case with commercial customers. Our drivers will travel to the facility only to find them closed, creating a disruptive experience.”
  • “Our in-person training department was shut down. So was the in-person interview process. Drivers were virtually interviewed and this made it difficult to assess their physical fitness for the work. We merely relied on their word of physical ability to make hiring decisions. This was highly disruptive because not all drivers were truthful. An in-person interview would have exposed some of the issues encountered with some drivers in terms of their physical ability to do package delivery work, which is physically challenging.”

Government Shutdowns (Supply Chain Disruptions)

It is no secret that the U.S. supply chain—and global supply chain—was radically disrupted by the COVID-19 pandemic and the public health restrictions. Few businesses felt the impact of the supply chain disruptions more directly than those within the transportation industry. Here is an example:

  • “A lot of commercial customers shutdown their facilities abruptly, without notice, making it difficult to serve them during the pandemic. These abrupt shutdowns meant that our workers traveled many miles to deliver without being able to accomplish this goal. Our drivers made multiple attempts to re-deliver to these locations in case they reopened. Some were shut down for a brief period while others for a long time. There was no sufficient information from these customers on their opening schedule and this created more uncertainty.
  • “Our workers couldn’t freely access the warehouse facility due to restrictions. They waited for a long time to resolve issues affecting their routes. For example, if a driver didn’t find a package in their rack, they waited a long time for the responsible warehouse person to be contacted about the problem, for the research to be done on the root cause before they were notified. This simple step took anywhere from 20 minutes to 2 hours, depending on the number of drivers having similar problems. This process was organized differently prior to COVID and the drivers had access to the warehouse with multiple booths addressing their problems. The warehouse staff was badly hit with COVID and as they became short staffed, this impacted their ability to attend to this simple administrative effort.”

Government Shutdowns (Difficulty Hiring, Training, and Retaining Workers)

The government shutdowns in place during the COVID-19 pandemic in 2020 and 2021 had a major impact on the ability of transportation companies to hire, train, and retain workers. Here are some of the specific ways in which companies were affected:

  • “The shutdown of businesses in California significantly impacted our ability to hire, train, deploy and retain employees. Training was done virtually instead of in-person for new employees. This impacted the quality of training and onboarding as new drivers lacked immediate hands-on work training.”
  • “With the difficulty in hiring and retaining workers, we had to scale back deliveries to certain delivery areas, thereby partially suspending operations. Even when we tried to backfill workers who had left due to COVID, more soon left again, making it a cycle of trying to keep up. For example, we suspended operations to some parts of Fallbrook CA, and Escondido CA due to the significant absence of drivers resulting from their infection with COVID.”

Year-over-Year Loss in Revenue

Businesses can also qualify for the Employee Retention Credit based on a year-over-year loss in revenue when compared to pre-pandemic. For example, a truck company that had first quarter 2021 revenue that was at least 20 percent lower than first quarter 2019 revenue could qualify for the ERC for that quarter based solely on revenue loss alone.

To be clear, no revenue loss is needed to qualify for the ERC. Every trucking company or transportation company that was the subject to any of the aforementioned government orders or any other disruptive government order can claim the ERC.

The Bottom Line: Virtually All Transportation Companies Qualify for the ERC

The most important thing to take away from this article is that virtually every company in the transportation industry in the United States was subject to government orders—often several government orders—that adversely affected commerce. In effect, this means that virtually every trucking company and every other transportation company can qualify for the ERC.

Sunrise Business Solutions | ERC Guaranteed has access to the full spectrum of federal, state, and local government orders. We help transportation industry businesses secure the full available ERC. The ERC is an important but somewhat misunderstood tax benefit. Your business could be entitled to up to seven times the amount it received in PPP funding through the ERC.

The ERC is a cash refund. There are no restrictions on how trucking companies or transportation businesses use their ERC. You can invest it back into the business or use it to repay yourself for the disruptions. It is your money. Act now. There is still time to apply for the ERC for 2020 and for 2021 in 2022.

We Help Trucking Companies and Transportation Businesses Maximize the ERC Guaranteed

At Sunrise Business Solutions | ERC Guaranteed, our ERC specialists have extensive experience working with truck companies and other transportation industry businesses. We are here to help you secure the maximum ERC benefit—guaranteed. Call us at 312-883-1888 or contact us online to set up a no risk, confidential appointment. We provide nationwide ERC services to the transportation industry.