The commercial trucking industry has faced many challenges over the past two decades. In recent years, driver shortages and ever-rising semi truck fleet insurance costs have necessitated operational changes on the part of fleet owners. In 2020, uncertainty about the coronavirus pandemic – rising consumer demand for goods coupled with safety fears for drivers – have forever altered the trucking sector. From the serious to the mundane, commercial truck drivers experience many concerns. Understanding these trucking concerns of drivers is a fundamental part of managing emerging risks for commercial fleet businesses.
American Transportation Research Institute Report
In October 2020, the American Transportation Research Institute (ATRI) presented a comprehensive report to the American Trucking Associations. The report, entitled “Critical Issues in the Trucking Industry”, revealed a wide range of key issues and concerns facing the commercial transportation sector. Among the findings in the report, top industry issues included:
- Driver shortages due to retirements and lack of interest in younger generations.
- Compensation for drivers, including wages and benefits.
- Truck parking.
- Availability and cost of semi truck fleet insurance.
- Economic factors.
- Hours-of-service regulations.
- Driver retention.
Driver Shortages, Compensation, and Retention
Once again, driver shortages led the list of top concerns for fleet owners. This key factor was followed closely by compensation available for drivers, and by driver retention. Combined, these concerns have left the trucking industry facing steep challenges in the coming years. According to the American Trucking Associations (ATA), the trucking industry was short nearly 61,000 drivers in 2018 and if trends continue, this shortage will swell to just over 150,000 drivers by 2028.
As drivers reach retirement age, fleet operators have had a difficult time recruiting qualified candidates to replace them. Low wages, grueling hours, and insufficient compensatory benefits have been pegged as factors leading to these shortages. The trucking sector needs to improve driver recruitment and retention practices to counteract worker shortages before cargo routes are affected.
Economic Conditions in the Trucking Industry
Driver shortages are only part of the picture when it comes to economic challenges facing the trucking industry. Concerns about the coronavirus pandemic and its effect on world economies have left the transportation sector scrambling for solutions. Consumer demand for certain commodities, including foodstuffs, sanitary products, and personal protective equipment (PPE) have boosted available cargo-hauling opportunities. However, driver shortages due to attrition, poor recruitment, and driver illnesses have meant that cargo shipments are often delayed.
Fleet owners have instituted policies that focus on minimizing deadheading, or traveling with empty trucks. By prioritizing trips on regular cargo routes and ensuring trucks are filled during all legs of a journey, the shortage of drivers and rising consumer demands can be met with cost-effective solutions.
Rising Insurance Costs and a Lack of Insurance Availability
A hardening insurance market has meant that many fleet owners have faced significant premium increases for semi truck fleet insurance policies. According to the ATRI report, carriers have found insurance costs per mile rising about 18% over the past five years. Smaller fleets have been disproportionately affected by rising premiums, with a number of smaller commercial operations experiencing cost increases at three times the rate of larger carriers.
In many cases, insurance carriers are withdrawing from the transportation market, negatively affecting the availability of comprehensive semi truck fleet insurance. Again, smaller fleets have felt the sting more than their larger counterparts, forcing them into expensive policies when their insurance carriers discontinue coverage. One of the remedies proposed in the ATRI report is to pass on rising costs to shippers in the form of insurance surcharges. These surcharges would serve to suppress some of the insurance market volatility plaguing the transportation sector.
Finally, the role of fleet risk management can help bring insurance costs and availability in line with industry needs. By analyzing all aspects of the commercial trucking sector, fleet owners can reduce the hazards and risk exposures that lead to rising insurance premiums. Risk management is built on a foundation of protection by semi truck fleet insurance policies; together, these two components can help keep America’s trucking sector on the roads while covering the risks of trucks, drivers, and their cargo.
About Gain Insurance Agency
Gain Insurance Agency protects trucking businesses against liabilities and claims in the industry. We combine products provided by respected insurance providers with our expertise and custom packages to meet customers’ individual needs. Our goal is to give you the coverage that you need at the lowest possible price. To learn more about our products and services, contact us today at (877) 424-3344.