2019 was a bad year for many midsize fleets. According to FreightWaves, roughly ten midsize or large carriers have closed their doors in the past 12 months, including Celadon, HVH Transportation, New England Motor Freight Inc., Falcon Transport, Stevens Tanker Division, GDS Express, and LME.
Now, another fleet is joining them. Commercial Shuttle Service, a private fleet based out of Albany, Georgia, is closing its doors after 38 years. This closure is putting 55 employees back on the job market, including 41 drivers. Among the reasons cited by owners for its closure was the rising cost of insurance. The fleet was in the middle of renewing its carrier insurance when leadership decided to shut the operation down.
Accidents, Death, and Insurance Costs Are Rising
The National Highway Traffic Safety Administration, in its latest Traffic Safety Facts Report, stated that from 2017 to 2018 the number of people involved in large truck crashes rose by 12.5% from 553,000 to 622,000. Meanwhile, deaths resulting from large truck crashes are up too, though not as significantly. From 2017 to 2018, the number of fatalities rose 0.9% from 4,905 to 4,951, continuing the prior year’s trend of a 4.6% increase.
Naturally, with two-year fatality rates increasing by 5.5%, insurance costs are expected to rise. This is bolstered by calls for tort reform, which would increase the cost of insurance even further. According to the Commercial Carrier Journal, “U.S. Rep. Matt Cartwright, D-Penn., 8th District, is sponsoring a bill (H.R. 3781) to raise the minimum liability coverage on semis from $750,000 to $4.5 million, a 500 percent jump that would put even more upward pressure on premiums.”
Of course, it can’t be ignored that this call for increasing minimum liability coverage is coming in the wake of the rising number of nuclear verdicts, which have led to several fleet shutdowns in the past five years.
What Can Your Fleet Do to Ready Itself for These Increasing Insurance Costs?
There are several worthy responses:
- Increase driver retention by reducing turnover. Insurance companies look at your driver tenure bands when pricing your premiums. Long-time drivers know their routes well and are statistically less likely to have an incident than newer drivers.
- Invest in your safety team. Fleets with organized data, well-trained team members, and a proactive approach to safety look good to insurance companies.
- Invest in a technology solution that meets all your safety and turnover reduction needs. Platforms like the Idelic Safety Suite can collate and organize data from all of your departments’ disparate systems and identify your drivers who are most at-risk for an accident. Even better, the Safety Suite can identify the areas where your drivers need improvement and recommend training specific to their needs, which you can then track on the platform.