It’s safe to say that the world of transportation companies has changed in recent years. Through a mix of supply and demand, technological advancements, international trade and the revamped federal policies that go with them, the transportation market looks almost completely different now.
To navigate through these changes and updates in the coming years, it’s important for transportation companies to be educated on the market’s evolution and to be knowledgeable about how to move forward in a productive way.
Here’s what’s to come in the transportation market this year and moving forward.
Less Freight, Less Hours, Less Drivers
The last 18 months in the trucking industry has been rocky, to say the least. Last year saw retailers and manufacturers moving less freight amidst a tariff war with China before the coronavirus outbreak hit the same country, bringing international freight to a veritable halt.
Freight rates in 2019 dipped year over year for more than six months, meaning that truck drivers saw a 20-percent decline in rates for trucking loads. This has led to some trucking companies having to either slash their roster of drivers for hire or close their doors completely and declare bankruptcy. And while freight rates were expected to tick back up, the coronavirus pandemic hit China and made its way over to the United States, crippling the economy and causing companies to cut jobs and hours.
In 2019, American trucking giants Knight-Swift and Schneider International both cut their annual outlooks and will have to go back to the drawing board after the coronavirus pandemic slows. But the issue goes beyond truck drivers not seeing enough freight coming through–it also reaches out to logistics companies like FedEx and UPS seeing a dip in work as people are buying fewer items due to being laid off or sent home from work.
Transportation Liability Insurance Will Rise
Transportation insurance options are there for truck drivers and the companies they work for, and are needed in order to stay safe behind the wheel. However, the industry is expected to see rising rates in 2020 and beyond. A number of trucking business closures in 2019 listed an increase in Transportation insurance costs as a major cause of being forced to close down. Transportation insurance claims related to truck crashes have jumped in not only frequency but severity as factors such as distracted driving from other drivers on the road are playing a role.
This has all resulted in a hardened Transportation insurance market as rate increases have affected even the most risk-conscious trucking fleets. It’s important that fleet operators continue to monitor safety performance and insurance rates to see how the two are connected. Reducing safety issues on the road, including accidents and driver injury, can help to limit transportation insurance rates over time.
Technology Growing at a Rapid Rate
The trucking industry is in the middle of a technological revolution with the advent of self-driving trucks and more digitally connected networks. But one major part of technology that’s seeing rapid change is electronic logging system in trucking, or ELD’s. Fleets of all sizes are using computerized dispatch and accounting systems to help improve the flow of information inside the market. Information that is being transferred can help improve both operations and safety.
For instance, this information can include video technology to improve driving practices that enhance safety all around, focusing on speed, location, and the mechanical condition of a truck. From there, feedback can be provided to employees on how they are performing behind the wheel and how the operation they work for is doing in the market as a whole.
About Genesee General
At Genesee, we strive to provide quality insurance solutions for the Commercial E & S sector. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. Our specialized products include coverages for Transportation, Garage, P & C, Professional, Brokerage Property, Specialty Programs and many more. For more information about our products, we invite you to contact us today at (800) 282-8755.