A year full of challenges

This post is part of a series sponsored by IAT Insurance Group.

2024 will bring further challenges to the transportation sector.

The U.S. economy continues to be a top concern for drivers and fleet carriers. Factors such as inflation (Industry’s biggest concerns in 2023), rising interest rates and soaring diesel prices are causing ripple effects across the transportation industry.(1) While it is true that inflation has stabilized, it has stabilized from a higher plateau and shows no signs of slowing down. Prices continue to rise and repair, maintenance and new vehicle cost standards are expected to become higher.

Similar inflationary pressures are also impacting the insurance industry through increased claims costs and settlements. Premiums will need to continue to increase to keep pace with the increasing cost of settling claims due to inflation.

In addition to economic pressures, government regulations at the state and national level will also be a concern.

5 considerations for fleet carriers in 2024

With so much uncertainty stemming from issues brought in from the previous year, your best defense is to be informed and proactive. Here are her top five trends fleet carriers should be aware of to further enhance their success in 2024.

1. Maintenance delays

As profit margins continue to shrink, companies may be tempted to forgo routine maintenance and inspections to save money in the short term. This workaround leads to costly long-term risks such as service violations, expensive repairs that cause downtime, and an increased likelihood of accidents.

I take action: Resist the urge to reduce maintenance performance below the manufacturer’s standard requirements and continue to complete pre- and post-trip inspections. If a DOT roadside inspection increases his CSA score or a carrier’s accident frequency increases due to maintenance issues, it will negatively impact your insurance premiums. Look for other opportunities to narrow your budget and keep your maintenance schedule on track.

2. Increase in theft

Theft claims are on the rise and this trend shows no signs of slowing down.A 20% spike was reported last year. luggage theft incidentIncidents range from cargo theft to entire vehicle theft and most often occur in parking lots and truck stops as drivers seek sleep and rest. Theft of intermediary cargo With a 600% increase in 2022, extortion or misdirection of cargo is the most common method of cargo theft.

I take action: Be proactive in preventing theft and its negative impact on business costs. Here are five easy ways to get ahead of problems.

• plan your route in advance Pinpoint safe places for drivers to stop, eat, and rest.
• Lack of truck parking has been an issue for decades and has been a top five concern since 2015.¹ consider Reservation of paid private parking lot. Private parking lots often have perimeter fencing, adequate lighting, surveillance cameras, and staff available 24/7.
• attach portable tracking device Attach it to your vehicle, chassis, or cargo to make it easy to find in case of theft or loss.
• Please pay close attention to managing service hours and securing your luggage.
• For high-value packages that are targets for theft, we will discuss them with the driver during the trip and provide them with the safety measures to use while loading and transporting such packages.

3. DOT Rule Changes

Seven high-level DOT rule changes introduced in 2022-2023 are scheduled for release in 2024. The final rule updates are not yet confirmed, but keep an eye out for the following rules as they are introduced:

• FMCSA Safety Management System Update
• Mandatory speed limiter
• automatic emergency braking system
• Collision avoidance possibility determination program
• CDL Drug and Alcohol Clearinghouse Return to Duty Process
• Testing abilities and skills
• Oral fluid and urine samples for drug/alcohol testing

I take action: Always know what’s going on. Stay up to date on industry news and join your state association for helpful information and support.

4. California’s new electric vehicle regulations

Regulatory pressures across the country are driving the transition to electric vehicles (EVs), and California’s truck emissions standards are leading the way in the trucking industry. California’s higher compliance regulations don’t just impact California-based airlines. All carriers that drive into the state are affected, creating major disruptions for many businesses across the country.

In fact, zero-emission vehicles were first recognized as a key issue for the trucking industry in 2023. 1 In the wake of the new rules, companies are grappling with the financial viability of continuing to contract with California-based operations. Additionally, distribution centers are popping up just outside the California state line to house non-compliant trucks that can no longer cross state lines.

I take action: Transitioning to an EV fleet is no small feat. Consider all the variables before deciding if this is a realistic option for his 2024 business. These expensive vehicles have charging capacity challenges, and increased battery weight reduces payload. Further complicating the problem, electric vehicle mechanics are not readily available. Route planning can be difficult, as planning also needs to take into account charging stations and necessary repairs. It’s also unclear how insurance companies will cover EVs due to uncertainty surrounding the cost of repairing or replacing equipment.

5. Driver Retention and Employment

Many economists expect the freight market to continue to soften in the first and second quarters of 2024, before recovering in the second half of 2024, so companies should continue to focus on retaining their best employees. be.Sales of some trucking industry segments are 85% to 90% height, fleets have invested in retention bonuses to keep their best drivers. In fact, the average retention bonus has increased nearly 90% over the past four years to $1,272.1.

I take action: Whether you focus on retention or hiring, prioritize quality above all else. The benefits of being a good driver are far-reaching and can impact your insurance costs. A better driver means better fares. Consider using in-car telematics for an informed view of your driver’s safety habits and on-road efficiency. This GPS-based technology provides insight into driver performance, including speed, hard braking, and more.

Be prepared if you need to start hiring again when job numbers come back up late in the third or fourth quarter of this year. Do your due diligence, adhere to best practices, regulations and guiding principles, and uphold your commitment to hiring the best drivers for the job.

Looking to the future

2024 is already shaping up to be a year of change. So, stay informed about new rules and regulations, have a plan in place to minimize the possibility of theft, and remain flexible to fluctuating market growth.

For guidance on how to manage fleet risk in 2024, visit Contact IAT Insurance.

Written by Tom McCallum, Peter Matthews, Nick Martin

(1) American Transportation Research Institute”Critical Issues in the Trucking Industry – 2023October 2023.

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