A 12 months of Continued Challenges

This submit 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. Components like inflation (2023’s prime 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 executed so from the next plateau and exhibits no indicators of coming down. Costs proceed to climb and the next value baseline is predicted for repairs, upkeep and new automobiles.

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 degree may also be of concern.

5 issues for fleet carriers in 2024

With a lot uncertainty stemming from points flowing over from the earlier 12 months, the perfect protection is to learn and proactive. Listed here are 5 developments fleet carriers ought to 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 save cash within the brief time period. This workaround results in expensive 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 customary 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 attributable to upkeep points could have an opposed impression on insurance coverage premiums. Search for different alternatives to tighten the finances and maintain your upkeep schedule on monitor.

2. Improve in theft

Theft claims are on the rise and this pattern exhibits no indicators of slowing down. Final 12 months there was a 20% soar in reported cargo theft incidents, which vary from stealing the cargo to stealing the whole automobile and happen most frequently in parking tons and truck stops as thieves benefit from drivers’ must 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 opposed impression on the price of doing enterprise. Listed here are 5 easy methods to get forward of the issue:

• Pre-plan routes to pinpoint protected places for drivers to cease, eat and relaxation.
• The dearth of truck parking has been a difficulty for many years and a top-five concern since 2015.¹ Take into account reserving paid personal parking spots. Personal parking typically consists of perimeter fencing, ample lighting, safety cameras and onsite personnel 24/7.
• Connect moveable monitoring units to your automobiles, chassis and cargo to make them straightforward to find within the occasion that they’re stolen or go lacking.
• Pay shut consideration to how you might be managing hours of service and securing masses.
• Talk about high-value/high-target theft masses with the driving 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 at present no affirmation on what the ultimate rule updates will entail, maintain your eye out for these guidelines coming down the highway:

• FMCSA Security Administration System replace
• Obligatory pace limiters
• Auto emergency braking methods
• Crash preventability willpower program
• CDL drug and alcohol clearinghouse return to responsibility course of
• Competency and abilities testing
• Oral fluids in addition to urine samples for drug/alcohol testing

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

4. New California electrical automobile guidelines

Regulatory strain throughout the nation is pushing the transition to electrical automobiles (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.

In reality, zero-emission automobiles have been recognized as a vital situation 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 continuous California-based operations and contracts. As well as, distribution facilities are popping up simply exterior of the California border to accommodate non-compliant vehicles that may not cross state strains.

Take motion: Transitioning to an EV fleet is not any easy feat; contemplate all the variables at play earlier than deciding whether or not this can be a sensible choice for your enterprise in 2024. These expensive automobiles current challenges with charging capability, and the elevated weight of batteries reduces cargo capability. Additional complicating issues, mechanics that work on electrical automobiles 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 a scarcity of readability round how insurance coverage corporations will cowl EVs attributable to uncertainty surrounding prices to restore or change gear.

5. Driver retention and hiring

Many economists undertaking 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 centered on retaining their finest staff. With turnover in some trucking trade segments as excessive as 85% to 90%, fleets have invested in retention bonuses to maintain their finest drivers. In reality, 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 expertise can present insights into driver efficiency together with pace, arduous braking and extra.

When load volumes return later in Q3 or This autumn this 12 months, be ready if you have 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 the perfect drivers out there for the job.

Wanting forward

The 12 months 2024 is shaping as much as be a 12 months 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 development.

For steering on find out how to 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 “Crucial Points within the Trucking Business – 2023,” October 2023.

Subjects
California
Traits