A 12 months of Continued Challenges

This publish is a part of a collection 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 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 performed so from the next plateau and exhibits no indicators of coming down. Costs proceed to climb and the next price baseline is predicted for repairs, upkeep and new autos.

These similar inflationary pressures are additionally impacting the insurance coverage trade by 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 will even be of concern.

5 concerns for fleet carriers in 2024

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

1. Upkeep delays

As margins proceed to shrink, firms 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 provider’s accident frequency because of upkeep points could have an adversarial impression on insurance coverage premiums. Search for different alternatives to tighten the finances and hold 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 all the 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 methodology.

Take motion: Be proactive in your efforts to stave off theft and its adversarial 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 shortage 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. Non-public parking usually consists of perimeter fencing, satisfactory lighting, safety cameras and onsite personnel 24/7.
• Connect moveable monitoring gadgets 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.
• Talk about 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 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, hold your eye out for these guidelines coming down the street:

• FMCSA Security Administration System replace
• Necessary pace limiters
• Auto emergency braking techniques
• 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 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 trade. California’s greater compliance rules don’t simply have an effect on the California-domiciled provider; any carriers that drive into the state are impacted, inflicting important hurdles for a lot of firms nationwide.

In truth, zero-emission autos had been recognized as a important concern 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 may not cross state traces.

Take motion: Transitioning to an EV fleet is not any easy feat; take into account 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 firms will cowl EVs because of uncertainty surrounding prices to restore or change gear.

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 firms ought to stay targeted 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 truth, the typical retention bonus has climbed virtually 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 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 autumn this 12 months, be ready if it’s essential to begin hiring once more. Do your due diligence and cling to finest practices, rules and your guiding ideas and preserve your dedication to hiring one of the best drivers accessible 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 rules, plan to attenuate the probability of theft, and be versatile across the fluctuating market progress.

For steering on easy methods to handle your fleet’s danger 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 Trade – 2023,” October 2023.

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