The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. This is the first of two articles focused on the current trucking insurance crisis. The second article will be published Monday.
Like the British monarchy and parts of the Middle East, the U.S. trucking industry rolled into the third decade of the century in relative chaos. The primary factor in the trucking situation is financial pressure related to escalating insurance costs.
Two related developments have exerted the most pressure. The first is the shrinking number of commercial liability insurers. The second is the growing number of “nuclear verdicts” in liability cases — i.e., those with jury-awarded penalties exceeding $10 million. In the first of two articles, I intend to outline the problem and the role operators can play in reducing risk and attendant cost.
My premise is straightforward: When confronting a challenge, it’s essential to focus on what we can control — solutions, not complaints.
Insurance companies are not the problem
Insurance is not the problem. Insurance rates reflect the condition of the applicable market. Blaming insurance companies is like blaming the mirror for the image it reflects.
You may not be the problem either. Even if a company operates safely, insurance premiums, in part, are based on industry performance. Most trucking companies care about safety, but we are all paying price for those who do not.
The number of insurers writing trucking liability has always been limited. But the problem is worsening, with more providers leaving the marketplace in favor of more profitable industries. This leaves trucking companies with fewer options and higher rates. Double-digit increases are routine, even for companies with solid safety records.
These pressures fueled many trucking company closures in 2019. A Fox Business report pointed to 795 carrier failures in 2019 impacting 24,000 trucks.
Become insured of choice
Trucking companies have a choice. They can remain stuck in their old ways and disappear or they can commit to thrive by approaching the insurance crisis as a significant opportunity. Smart operators who develop new approaches to safety and prevention stand to become insureds of choice and gain competitive advantage. The days of bare-minimum compliance-based programs and obligatory banners are behind us. The path forward is a genuine culture of prevention.
As safety experts and regulators have long advised, compliance does not ensure a safe operation. Operators need to create a culture that takes no prisoners and leaves no doubt about the role of every individual in creating a safe, profitable future. In a culture-driven organization, safety is neither a priority, a policy nor a program. It’s a nonnegotiable core value supported by incident-prevention strategies like these. Safety is not a department – it’s a way of life.
Review your hiring practices. Are you hiring for the right characteristics — like a personal commitment to safety and a belief that individuals are accountable for their safety and the safety of their co-workers? If not, your employee roster may be filled with risk-takers who see themselves as above the law — and above your company rules.
Make a strategic investment in technology. Outfit every truck in your fleet with inward- and outward-facing cameras, which I believe should be required by insurers as a condition of favorable coverage terms. Avoiding one significant claim will pay for the equipment many times over. What’s more, cameras allow trucking companies to identify and root out bad behaviors.
Put safety above productivity. Safety is not an “either/or” proposition. Successful organizations must be safe and productive. Without the right culture, management and training, however, undue production pressure can lead to shortcuts, deferred maintenance and ignoring glaring risk. Adopt a policy — one with teeth — that states that productivity never trumps safety.
Listen closely. Early warning signs about unsafe conditions are everywhere; it’s a matter of heeding them. It could be the cry of a fatality or serious injury. Or it may be the whisper of a minor defect in a piece of equipment, a gap in employee training or supervisors who discourage reporting. Listen to the whispers and you’ll avoid the cries.
Prioritize purpose. Make sure your employees understand why they need to avoid shortcuts, use best practices and look out for co-workers. Employees must know the reasons for working safely and be aware of the impact of incidents on profitability, reputation and competitive advantage. Don’t be afraid to share statistics that highlight the costs of unsafe conditions and behaviors. Ultimately, safety is about people and families. It’s about coming home alive.
Choose wisely. Perform due diligence to ensure your insurance provider has the right coverage, financial strength, programs and expertise. Shippers can be unwittingly dragged into accident litigation and having the right carrier behind you can make all the difference in the outcome. The quality of your insurance coverage is critical to you and your clients. The safest carriers will continue to have plenty of traditional and captive insurance options. These carriers will have lower insurance costs, thus securing a sustainable competitive advantage.
Do the right thing
Best-in-class companies that invest in safety and believe in culture will see strong returns on their investment. They know it is impossible to control every outcome. So they focus on what they can control – people, process and behavior.
These companies know that good safety is good business. And they view prevention as a moral imperative, a matter of doing the right thing in the eyes of employees, customers and competitors. They understand that the current insurance crisis spells abundant opportunity for those who are willing to invest in a culture of prevention. Because they are proactive and are insureds of choice, they will communicate transparently with their clients, educate them and ultimately adjust rates to reflect double-digit insurance increases.
The losers will disappear. The winners will thrive.
With truckers closing their doors and financial pressures mounting, walking our industry back from the brink will take more than a strong safety culture. It also will require efforts to curb lawsuit abuse. I address this topic in the second part of this article.
Brian Fielkow is CEO of Houston-based Jetco Delivery and executive vice president of Montreal-based The GTI Group. He is co-author of “Leading People Safely; How to Win on the Business Battlefield.” Fielkow received the National Safety Council’s Distinguished Service to Safety Award, the council’s highest-level individual recognition.
Don Kretzer II
Actually, you are wrong in several aspects here TC. First, companies do care about safety. Their livelihood depends on it. Without a good safety record their ability to get better freight with higher rates depends on it. Second, you obviously are not paying attention to details. Trucks in the left lane hammering on it, most of the times are doing so because traffic flow will not allow safe driving practices. If as you say I am doing 10 – 20 mph above the posted speed limit I am hardly in the way or tailing to closely because in most instances I am the leader of the left lane and other trucks and 4 wheelers are using me as the front door. Often the right and middle lanes are congested because both trucks and 4 wheelers are indeed following too close, I am merely exercising good judgement by being in the left lane mashing the motor to stay away from potential accidents in the making. So why don’t you stop your whining about things you don’t about and just worry about yourself while out and about… You do your thing and I’ll do mine and we will both make it where we need to be quick fast and in a hurry.
Don Kretzer II
Well Brian…. Me thinks as usual you CEO types have lost your grip on reality. The reason trucking insurance companies are drying up is because more and more companies are becoming self insured. Yes the insurance companies are to blame. The continual raising of rates have priced themselves right out of the market and in doing so trucking companies have decided it is cheaper to self insure rather than be raped by insurance companies. Frivilous lawsuits are also to blame. Any judge who rewards an at fault driver with a huge settlement should be removed from the bench and thrown in jail for comission of fraud. It is one thing to award damages due to not being at fault….it is another when even at fault the trucking company pays damages that were never their fault. 70% of all accidents involving 4 wheelers ARE STILL THE FAULT OF 4 WHEELERS, and yet ambulance chasing lawyers and poor judicial discretion are the main cause of rates going thru the roof. Before writing a hit piece there Hoss…. Perhaps you should get your facts straight. Pretending to know what you are talking about while actually being a know nothing…. Doesn’t make you look credible or knowledgable.
Michael F. Kemly
Sir, Some thoughts for your consideration. Insurance companies have varying rates based on size of operations. Some big box companies insure themselves, like Swift. Who are their underwriters and hiw much do they pay ? That is the big unknown. Additionally, as is in banking, ” too big to fail “, these companies have protections in courts from high ranking political connections. Read that last sentence again. The Fed has been working on eliminating the independent driver for decades , higher rates and costly fees to individuals. This is the truth. Wake up and smell the coffee .
Brian Aycox
I was hit from behind by somebody in a car. She said she was fine didn’t go to hospital but then a couple months later found out she was suing me & the company I drove for & won
Tokar Paul
I first learned to drive truck in the Army reserves. From the typical Jeep, 3/4 ton variations, up to the 2.5 ton 6×6, to the Dodge 3 ton. Progressing from there I obtained my Class A/1 with air brake endorsement during an intensive month long training program. At this time I was around 22 years old. Now 23, one job I applied for took me out for a road test. When we returned to the yard I was asked how old I was. After telling him I was 23, he told me that I was one of the best drivers he had examined for the vacant position. Then the bomb dropped when he told me that he could not hire me because of the insurance company restriction of minimum age of 25. I can’t really remember if I managed to become employed as a tractor trailer operator before turning 25, but I do remember all the rejections having an effect on my attitude about driving trucks. Luckily I have never been in a serious collision while driving a tractor rig.
Many drivers have to realize that the dispatcher is not in the cab with them. The dispatcher tells you where to go to get a load, but as a driver you are in control of getting there safely. The road ahead is foggy, slow down. The car tries to brake check you, slow down. If necessary pull over and let that jerk get further down the road. Dash cams are a small investment that can save you big bucks, and if you see another driver pulled over with the jerk that brake checked you, offer your dash cam evidence to that driver.
Should you be involved in a lawsuit with a possible big payout, have your lawyer insist that the jury do a minimum 3 day ride along. The eyes of the jury will open wide at what a trucker has to put up with. That multi million dollar award to the four wheeler, will suddenly become only a few thousand.
Thank a trucker, because the only thing not delivered by a trucker is a baby. Everything anyone has was at some point, delivered by a trucker.
TC
Your info is flawed. Truck drivers and most companies do not care about safety. Have you ever driven of the freeways and highways. Most truckers are going 10 to 20 MPH over the posted speed limit and camp out in the #1 left lane. The truck driver always say and complain about being cut off by cars. Yet they will tailgate and cut of cars when they pass them for not going as fast as they want to go.
So the nest time you are out driving pay close attantion to how the truckers are driving
Paul Geishert
I don’t know about you but most trucks from companies are governed at a certain rate of speed. Usually 3 to 7 miles below prevailing speed limits. And Owner Operators that do speed can and do get disciplined via electronic logs by the DOT. I rarely see drivers go more than 5 mph over, because they simply CAN’T. You must be smokin weed.
Mike
Thank the ELD for the speeding, I call it “Beat the Clock”. I found myself speeding when I never would have, trying to get to a safe parking space, if I was lucky enough to find one. I also found I was always in a hurry, watching that clock, trying to squeeze every second out of the day. I started screwing up, doing things I never used to do, as I used to take my time and do things correctly. And yes, I fudged the log book, but I was a much safer driver. I finally had it, last week I found myself hitting 80 mph playing beat the clock. That was the last straw, I delivered that load and got another back to the office where I turned in my door signs and permit book. I parked the truck, 31 years and this industry has gone to hell in a hand basket. I have already secured a job, will sell the truck in the Spring.
Don Kretzer II
Actually, you are wrong in several aspects here TC. First, companies do care about safety. Their livelihood depends on it. Without a good safety record their ability to get better freight with higher rates depends on it. Second, you obviously are not paying attention to details. Trucks in the left lane hammering on it, most of the times are doing so because traffic flow will not allow safe driving practices. If as you say I am doing 10 – 20 mph above the posted speed limit I am hardly in the way or tailing to closely because in most instances I am the leader of the left lane and other trucks and 4 wheelers are using me as the front door. Often the right and middle lanes are congested because both trucks and 4 wheelers are indeed following too close, I am merely exercising good judgement by being in the left lane mashing the motor to stay away from potential accidents in the making. So why don’t you stop your whining about things you don’t about and just worry about yourself while out and about… You do your thing and I’ll do mine and we will both make it where we need to be quick fast and in a hurry.
Tom
Quit hiring drivers from 3rd world countries. Go back to manual shifting, it keeps driver more alert and better control on curves, down grades and slowing down. Encourage the use of CBs, they really do help in safety.
And encourage drivers when parked at nite to stay in their painted lines and keep parking lites on.
Webster Stubbs
Inward facing cameras are an invasion of privacy. Secondly as long as insurance companies have the trucker is always at fault attitude. The lawyers are going to always go after the trucking companies. I do however agree with being careful about who the companies hire. Stop blaming the truck driver and start looking at the training programs and company reputations. We are already one of the most regulated careers in the U.S.
Russell Cashmore III
The trucking industry has been systematically under attach from the federal government for over 2 decade’s. Look at the cost of diesel alone, is much cheeper to refine yet considerably more expensive than gasoline. New regulation on the industry is choking out the good drivers. The trucking companies based in our northern & southern neighbors do not have the same company rules as US companies do. Why? I have no answer to that, it has perplexed me for years. Only thing that makes sense is create a situation that will lead to shortages so people want feds to step in, or have all trucks under just a couple companies that can be controlled by the feds. Either way, it all leads back to our federal government.
Robert
Fuck you how about the stupid cars that cut us off and you idiots that over half the time that causes us to try to not hit you but you only blame truck drivers your a fucking joke why don’t you address the regular car drivers and their drive-in if don’t then take your blame and shove it up your ass sorry but it’s true God bless everyone
TC
Read my comment below dumb ass
Paul Geishert
Well,well,if this don’t sound like an insurance salesman I don’t know what does. Sounds strictly for the insurance company to me. I want you to install a camera in YOUR HOUSE that lets a stranger watch you every second of the day. WE LIVE IN THESE TRUCKS. Training is the problem. Stick your cameras where the sun don’t shine!!!!!