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A 12 months of Continued Challenges

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

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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 top industry 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 completed so from a better plateau and exhibits no indicators of coming down. Costs proceed to climb and a better price baseline is predicted for repairs, upkeep and new autos.

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These identical 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 stage may also be of concern.

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5 issues 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 learn and proactive. Listed here are 5 tendencies 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 quick time period. This workaround results in expensive long-term dangers like service violations, costly repairs leading to downtime and an elevated chance of accidents.

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Take motion: Resist the urge to scale back upkeep practices under the producer’s commonplace 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 resulting from upkeep points may have an opposed impression on insurance coverage premiums. Search for different alternatives to tighten the finances and maintain your upkeep schedule on observe.

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% bounce in reported cargo theft incidents, which vary from stealing the cargo to stealing all the automobile and happen most frequently in parking heaps 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.

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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 secure 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 Think about reserving paid private parking spots. Non-public parking typically consists of perimeter fencing, ample lighting, safety cameras and onsite personnel 24/7.
  • Connect portable tracking devices to your autos, 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’re managing hours of service and securing masses.
  • Talk about 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 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
  • Necessary velocity limiters
  • Auto emergency braking methods
  • 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 taking place. Keep present on trade information and become involved 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 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 service; any carriers that drive into the state are impacted, inflicting important hurdles for a lot of corporations nationwide.

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In truth, zero-emission autos have been recognized as a essential problem 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 now not cross state strains.

Take motion: Transitioning to an EV fleet isn’t any easy feat; think about all the 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. Additional 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 a scarcity of readability round how insurance coverage corporations will cowl EVs resulting from uncertainty surrounding prices to restore or exchange gear.

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5. Driver retention and hiring

Many economists challenge 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 greatest workers. With turnover in some trucking trade segments as high as 85% to 90%, fleets have invested in retention bonuses to maintain their greatest 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 highway. This GPS-based expertise can present insights into driver efficiency together with velocity, onerous braking and extra.

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When load volumes return later in Q3 or This autumn this 12 months, be ready if it’s worthwhile to begin hiring once more. Do your due diligence and cling to greatest practices, rules and your guiding ideas and keep 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 reduce the chance of theft, and be versatile across the fluctuating market progress.

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For steerage on how you can handle your fleet’s danger in 2024, reach out to IAT Insurance.


By Tom MacCallum, Peter Matthews and Nick Martin

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

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California
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