A 12 months of Continued Challenges

This put up is a part of a sequence sponsored by IAT Insurance coverage Group.

Extra challenges are coming to the transportation sector in 2024.

The U.S. financial system continues to be the primary fear for drivers and fleet carriers alike. Elements like inflation (2023’s high trade concern), rising rates of interest and better diesel costs are inflicting a ripple impact all through the transportation trade.[1] Whereas it’s true that inflation has stabilized, it has carried out so from a better plateau and reveals no indicators of coming down. Costs proceed to climb and a better price baseline is predicted for repairs, upkeep and new autos.

These identical inflationary pressures are additionally impacting the insurance coverage trade via elevated declare prices and settlements. Premiums might want to proceed to extend to maintain tempo with inflation-driven will increase in the price of settling claims.

Along with financial pressures, authorities regulation on the state and nationwide stage will even be of concern.

5 issues for fleet carriers in 2024

With a lot uncertainty stemming from points flowing over from the earlier yr, one of the best protection is to learn and proactive. Listed here are 5 developments fleet carriers must be cognizant of to bolster their success in 2024:

1. Upkeep delays

As margins proceed to shrink, corporations could also be tempted to carry again on routine upkeep and inspections to economize within the brief time period. This workaround results in pricey long-term dangers like service violations, costly repairs leading to downtime and an elevated probability of accidents.

Take motion: Resist the urge to cut back upkeep practices beneath the producer’s normal necessities and proceed to finish pre- and post-trip inspections. DOT Roadside inspections leading to elevated CSA scores or a rise in a service’s accident frequency as a result of upkeep points may have an antagonistic affect on insurance coverage premiums. Search for different alternatives to tighten the funds and preserve your upkeep schedule on monitor.

2. Enhance in theft

Theft claims are on the rise and this development reveals no indicators of slowing down. Final yr there was a 20% soar in reported cargo theft incidents, which vary from stealing the cargo to stealing your complete automobile and happen most frequently in parking tons and truck stops as thieves benefit from drivers’ have to sleep or take a break. Brokerage cargo theft elevated by 600% in 2022, making the commandeering or misdirecting of shipments the primary cargo theft methodology.

Take motion: Be proactive in your efforts to stave off theft and its antagonistic affect on the price of doing enterprise. Listed here are 5 easy methods to get forward of the issue:

• Pre-plan routes to pinpoint secure areas for drivers to cease, eat and relaxation.
• The shortage of truck parking has been a difficulty for many years and a top-five concern since 2015.¹ Contemplate reserving paid personal parking spots. Personal parking usually contains perimeter fencing, ample lighting, safety cameras and onsite personnel 24/7.
• Connect moveable monitoring units to your autos, chassis and cargo to make them simple to find within the occasion that they’re stolen or go lacking.
• Pay shut consideration to how you’re managing hours of service and securing masses.
• Focus on high-value/high-target theft masses with the motive force throughout dispatch offering them with security measures to make use of whereas loading and transporting such masses.

3. DOT rule modifications

Seven high-level DOT rule modifications launched in 2022-2023 are anticipated to be launched in 2024. Whereas there’s presently no affirmation on what the ultimate rule updates will entail, preserve your eye out for these guidelines coming down the highway:

• FMCSA Security Administration System replace
• Necessary velocity limiters
• Auto emergency braking programs
• Crash preventability dedication program
• CDL drug and alcohol clearinghouse return to obligation course of
• Competency and abilities testing
• Oral fluids in addition to urine samples for drug/alcohol testing

Take motion: Maintain abreast of what’s occurring. Keep present on trade information and get entangled in your state associations for helpful data and assist.

4. New California electrical automobile guidelines

Regulatory stress throughout the nation is pushing the transition to electrical autos (EVs), and California’s truck emission requirements are main the cost within the trucking trade. California’s larger compliance laws don’t simply have an effect on the California-domiciled service; any carriers that drive into the state are impacted, inflicting vital hurdles for a lot of corporations nationwide.

Actually, zero-emission autos had been recognized as a important challenge within the trucking trade for the primary time in 2023.1 Within the wake of the brand new guidelines, companies are grappling with the monetary viability of constant California-based operations and contracts. As well as, distribution facilities are popping up simply outdoors of the California border to accommodate non-compliant vans that can not cross state traces.

Take motion: Transitioning to an EV fleet is not any easy feat; contemplate the entire variables at play earlier than deciding whether or not it is a sensible choice for your online business in 2024. These pricey autos current challenges with charging capability, and the elevated weight of batteries reduces cargo capability. Additional complicating issues, mechanics that work on electrical autos aren’t available, which might make route planning a problem since plans should account for charging stations and repairs if the necessity arises. There’s additionally an absence of readability round how insurance coverage corporations will cowl EVs as a result of uncertainty surrounding prices to restore or change gear.

5. Driver retention and hiring

Many economists mission the freight market to proceed to melt within the first and second quarters of 2024 earlier than rebounding in late 2024, so corporations ought to stay targeted on retaining their finest workers. With turnover in some trucking trade segments as excessive as 85% to 90%, fleets have invested in retention bonuses to maintain their finest drivers. Actually, the typical retention bonus has climbed nearly 90% over the previous 4 years to $1,272.1

Take motion: Whether or not your focus is on retention or hiring, prioritize high quality above all else. The advantages of excellent drivers are far-reaching, even impacting insurance coverage prices — higher drivers imply higher charges. Think about using in-cab telematics to get an knowledgeable view of your drivers’ security habits and effectivity on the highway. This GPS-based know-how can present insights into driver efficiency together with velocity, exhausting braking and extra.

When load volumes return later in Q3 or This fall this yr, be ready if you want to begin hiring once more. Do your due diligence and cling to finest practices, laws and your guiding ideas and keep your dedication to hiring one of the best drivers obtainable for the job.

Wanting forward

The yr 2024 is shaping as much as be a yr of change already, so keep knowledgeable on new guidelines and laws, plan to attenuate the probability of theft, and be versatile across the fluctuating market progress.

For steering on how one can handle your fleet’s threat in 2024, attain out to IAT Insurance coverage.

By Tom MacCallum, Peter Matthews and Nick Martin

[1] American Transportation Analysis Institute “Vital Points within the Trucking Business – 2023,” October 2023.

Matters
California
Tendencies