A Year of Continued Challenges

This submit is a part of a sequence sponsored by IAT Insurance Group.

More 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. Factors like inflation (2023’s high business concern), rising rates of interest and better diesel costs are inflicting a ripple impact all through the transportation business.[1] While it’s true that inflation has stabilized, it has executed so from the next plateau and reveals no indicators of coming down. Prices proceed to climb and the next value baseline is predicted for repairs, upkeep and new autos.

These similar inflationary pressures are additionally impacting the insurance coverage business 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.

In addition to financial pressures, authorities regulation on the state and nationwide degree may also be of concern.

5 concerns for fleet carriers in 2024

With a lot uncertainty stemming from points flowing over from the earlier 12 months, the perfect protection is to be told and proactive. Here are 5 traits fleet carriers needs to be cognizant of to bolster their success in 2024:

1. Maintenance 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 expensive long-term dangers like service violations, costly repairs leading to downtime and an elevated chance 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 consequence of upkeep points could have an antagonistic affect on insurance coverage premiums. Look for different alternatives to tighten the price range and maintain your upkeep schedule on observe.

2. Increase in theft

Theft claims are on the rise and this development reveals no indicators of slowing down. Last 12 months there was a 20% bounce in reported cargo theft incidents, which vary from stealing the cargo to stealing your complete car and happen most frequently in parking tons and truck stops as thieves reap the benefits of 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 technique.

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

• Pre-plan routes to pinpoint secure places for drivers to cease, eat and relaxation.
• The lack of truck parking has been a problem for many years and a top-five concern since 2015.¹ Consider reserving paid personal parking spots. Private parking typically contains perimeter fencing, satisfactory lighting, safety cameras and onsite personnel 24/7.
• Attach 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 hundreds.
• Discuss high-value/high-target theft hundreds with the driving force throughout dispatch offering them with security measures to make use of whereas loading and transporting such hundreds.

3. DOT rule adjustments

Seven high-level DOT rule adjustments launched in 2022-2023 are anticipated to be launched in 2024. While there’s at present no affirmation on what the ultimate rule updates will entail, maintain your eye out for these guidelines coming down the street:

• FMCSA Safety Management System replace
• Mandatory pace limiters
• Auto emergency braking programs
• 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: Keep abreast of what’s occurring. Stay present on business information and become involved in your state associations for helpful data and help.

4. New California electrical car guidelines

Regulatory strain throughout the nation is pushing the transition to electrical autos (EVs), and California’s truck emission requirements are main the cost within the trucking business. California’s greater 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 autos had been recognized as a crucial concern within the trucking business for the primary time in 2023.1 In the wake of the brand new guidelines, companies are grappling with the monetary viability of continuous California-based operations and contracts. In addition, distribution facilities are popping up simply exterior of the California border to accommodate non-compliant vans that may now not cross state strains.

Take motion: Transitioning to an EV fleet isn’t any easy feat; take into account the entire variables at play earlier than deciding whether or not this can be a sensible choice for what you are promoting in 2024. These expensive autos current challenges with charging capability, and the elevated weight of batteries reduces cargo capability. Further complicating issues, mechanics that work on electrical autos aren’t available, which may 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 consequence of uncertainty surrounding prices to restore or substitute tools.

5. Driver retention and hiring

Many economists venture 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 greatest staff. With turnover in some trucking business segments as excessive as 85% to 90%, fleets have invested in retention bonuses to maintain their greatest drivers. In reality, the typical retention bonus has climbed nearly 90% over the previous 4 years to $1,272.1

Take motion: Whether your focus is on retention or hiring, prioritize high quality above all else. The advantages of fine drivers are far-reaching, even impacting insurance coverage prices — higher drivers imply higher charges. Consider utilizing in-cab telematics to get an knowledgeable view of your drivers’ security habits and effectivity on the street. This GPS-based expertise can present insights into driver efficiency together with pace, exhausting braking and extra.

When load volumes return later in Q3 or This fall this 12 months, be ready if it’s essential begin hiring once more. Do your due diligence and cling to greatest practices, laws and your guiding rules and keep your dedication to hiring the perfect drivers out there for the job.

Looking 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 chance of theft, and be versatile across the fluctuating market development.

For steering on the right way to handle your fleet’s threat in 2024, attain out to IAT Insurance.

By Tom MacCallum, Peter Matthews and Nick Martin

[1] American Transportation Research Institute “Critical Issues in the Trucking Industry – 2023,” October 2023.

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