New challenges have arisen in the transportation industry originating from an increase in frequency and severity of losses for commercial trucking and conditions impacting the supply of drivers, vehicles and freight that have developed in recent years. The American Transportation Research Institute (ATRI) presented to the American Trucking Associations last October the results of their latest survey, detailing the most critical issues facing the trucking industry. It found that driver shortage and retention ranked at top of the list. Other contributing factors include growing freight demand and the aging driver workforce, in addition to the negative impact of the significant number of drivers leaving the industry due to health concerns during COVID-19 over the last two years. As a result, there is an increase of new or inexperienced drivers on the road, as well as more vehicles covering more miles.
Impact of Supply Chain
Material constraints & supply chain issues primarily brought on by the impact of COVID-19 have impeded new truck builds throughout the pandemic. Truck and fleet owners wanting to service their trucks have felt similar effects. Volatility in steel and rubber prices has impacted the availability of tires and forged parts, like blocks and housings, and lead times for parts, previously a few days, now can drag on for weeks. Tight parts supplies have been caused by a combination of things; not only raw material limitations, but also a self-inflicted surge in demand due a perceived shortage has prompted manufacturers to raise prices. Shortages like these require non-traditional solutions, such as temporarily using aftermarket sources, remanufactured parts, utilizing machine shops, metallurgists making temporary repairs, and, where warranted, the use of salvage yards until new parts can be procured.
The combination of these issues was further thrust into the spotlight when the COVID-19 pandemic disrupted supply chains across the globe, leaving American store shelves empty. In response, the Federal Motor Carrier Safety Administration (FMCSA) enacted an emergency declaration in March, 2020. This has provided hours of service relief (the maximum driving time for property-carrying vehicles) to allow qualifying motor carriers relief. Therefore, as a waiver, it is only available when a motor carrier is “directly engaged” in support of the relief efforts. An example includes transporting medical care or essential supplies related to the COVID-19 outbreaks. The emergency declaration was due to expire on February 28, 2022, but was subsequently extended through May 31, 2022. It is important to note that this declaration did not apply to routine commercial deliveries or mixed loads with a nominal quantity of essential supplies. Compliance standards in regards to speed limit and traffic restrictions, prohibitions of texting and use of any hand-held devices, licensing credentials for hazardous material requirements, and size and weight limits all continue, in addition to the utilization of electronic logging devices and retention of driver’s record of duty status.
Tightened insurance market conditions are expected to continue for the transportation industry. One of the top strategies for trucking fleets when attempting to secure favorable rates is to differentiate themselves from the average trucking risk in their insurance renewal submissions. This requires quantifying their driver turnover and retention statistics in relation to the general industry data. In addition, safety investments in technology deployment and telematics (e.g., cameras, speed limiters, active braking systems) and emphasis on driver training are increasingly necessary to detail and highlight on underwriting submissions.
The RT Transportation team has been built with the knowledge and experience to assist its retail brokers in addressing the insurance needs of commercial trucking and large fleet exposures. We understand each account is unique and has its own risk characteristics. We offer full access to the transportation insurance marketplace in order to create favorable outcomes and viable renewal options.
ATRI-Top-Industry-Issues-2021 - truckingresearch.org
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