To succeed in transportation today fleet carriers have to broaden the focus beyond just moving product from point A to point B. It is about providing clients with knowledge of their product as it moves through the supply chain, and with the peace of mind that comes from using transportation vendors that have excellent risk management practices. This can only be done by adopting forwarding-thinking technology and management practices. Here what’s to come in transportation in 2020:
- The driver shortage continues to be the industry’s #1 concern. In 2019, the industry was short approximately 60,800 drivers, according to the American Trucking Association.1 It is expected to rise in the coming years and could double over the next decade. Factors that are contributing to this crisis include both an aging driver population and a lack of new entrants to the industry. Additionally, the only growing driver population – owner/operators - is under increasing pressure from state regulations. Many fleets have improved compensation packages with increased pay and benefits, while also addressing important quality of life issues such as home time and improved amenities in the trucks. Bottom line: Motor carriers need to invest in improved hiring, employee training and support for drivers.
- Liability insurance rates will continue to rise. A number of trucking business failures in 2019 listed “increased insurance costs” as a leading cause of being forced to close their operations. Insurance claims related to truck crashes have increased in frequency and severity over the last several years and premiums paid to the insurance carriers have not kept pace. This has resulted in a hardened truck insurance market – possibly the worst the industry has ever seen. Rate increases have affected even the most risk-conscious fleets. For those that struggle with safety performance, the increases are severely chipping away at profitability. It is critical that fleet operators continue to closely monitor safety performance indicators, including CSA scores and insurance loss runs. Reducing CSA scores and actively engaging in the claims process has never been more important. Fleet operators are also taking on additional risk by increasing deductibles or utilizing alternative risk products such as captives to reduce their cost of risk.
- Utilization of technology is a growing focus. The ELD requirement has almost every trucking fleet utilizing some type of telematics product. Fleets of any size today are also using computerized dispatch and accounting systems to improve the flow of information inside of the business. There is an incredible amount of information that can be harvested to improve both operations and safety if used correctly. This can include video technology to improve safe driving practices and an exoneration tool when the driver is not at fault in a crash situation as well as information about the speed, location and mechanical condition of the vehicle. How this information is shared with drivers, management and customers can have a direct impact on the performance of the organization. Feedback can be provided to employees on how they are performing and what needs to be done to improve performance. Fleet operators are also looking for more information to be shared via blockchain technologies.
2020 Growth and Beyond
It is likely that trucking liability insurance rates will continue to rise and insurance carriers will become more selective about who they are willing to insurance. Insurance companies want fleet operators to take an active role in safety so that claims will be reduced in the future. This will require a holistic approach that includes embracing improved driver hiring and retention practices, better monitoring of driving activity out on the road and management addressing activities at all levels of the organization.