Posts Tagged ‘trucking insurance’

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No Comments June 20th, 2017 Latest News, Other Commercial Lines

Preparing And Making The Right Trucking Insurance Decisions To Protect Your Investment

Whether you are a trucking start-up or a seasoned small carrier, insurance is both a necessity and a nuisance with which to be reckoned.

More times than not a carrier’s owner isn’t as prepared as needed with the necessary information required for the lowest insurance quote. Many small and micro-carriers request quotes when their insurance is renewing in just a few days or weeks. That in itself creates a challenge for the insurance agent to gather the required underwriting information about the carrier, package it to fit the different criteria of the multitude of insurance companies, and provide the time for insurance underwriters to return a quote with their best rates. Trucking company owners need to know that to get the lowest possible rates, an insurance company requires both time and detailed information about the carrier.

This is not like calling your local car and home insurance agent, or going online to enter personal information to receive a quote for your car. For trucking insurance, you’re talking about a multitude of risks that need to be evaluated to determine the best coverage at the lowest cost.

To do this and to ensure no coverage is left out and unnecessary coverage is excluded requires time. The typical length of time spent gathering the underwriting information from the carrier, packaging the information in the required format for each underwriter, and then providing those underwriters with the time necessary to assemble a quality quote is two to three months.

If your insurance agent hasn’t contacted you 90 to 120 days out from your renewal date or if you are a start-up carrier, you need to contact the agent 120 days from the date you are officially opening for business. Anything short of that and you will most likely pay far more than you should for your motor carrier’s insurance.

What follows is a list of the detailed information you should be providing to your insurance agent. It’s best to have it packaged and ready to go. When insurance companies ask for documents, the faster they are produced indicates you’re on top of your company’s business and financial situation.

Keep in mind there may be other documents and information required for special situations and operations, so verify with your insurance agent what he or she needs.

GENERAL INFORMATION

– A list of drivers, including license numbers, dates of birth, and dates of hire.
– A copy of current safety program and any incentive program.
– A list of primary customers.
– Current company financial statements.
– Three- to five-year-loss runs with details on any large losses.
– An updated business plan.
– Website address as well as any brochures, newspaper articles, etc., that describe insured’s operations.

PROPERTY

– A list of all facilities (buildings, tank capacity, etc.)
– Is vehicle repair or body work done on premises?
– Is fuel stored on premises? Describe type, amount, and storage.
– Are fuel pumps and tanks protected by concrete posts?
– Is the yard area fully fenced and lit at night?

GENERAL LIABILITY

– Are you involved in other operations besides trucking for hire?
– Are you involved in any warehousing of goods for others?
– Are drivers allowed to carry guns?

AUTO LIABILITY

– What type of carrier is your company, i.e., common, contract, exempt, or private?
– List the types and percentage of hauling done for each (van, reefer, flatbed, liquid, etc.).
– Describe in detail what commodities are hauled.
– List major cities insured served and give percentage of overall operations to each.
– Does insured ever haul into or out of Canada or Mexico?
– Are any federal or state filings required?
– Are special filings (oversized, overweight, etc.) required?
– Is your company involved in any intermodal shipping?
– Does your company haul double or triple trailers? If yes, list percentage of each.
– Do you act as a freight broker/forwarder or arrange loads for others?
– Do you hire equipment from others?
– Do you hire contract lease operators under your authority?
– Is your company named as additional insured on its policies?
– Do you or your contract lease operators require non-trucking coverage (bobtail)?
– Is equipment ever loaned or leased to others? With or without drivers?
– Is your trucking company responsible for primary auto liability coverage?
– Do any contract lease operators need to be named as an ‘additional insured’?
– Is your carrier party to a formal interchange agreement?
– What is your carrier’s policy regarding passengers riding in trucks?
– Do you operate any vehicles that may need downtime coverage?
– Describe the current maintenance program for trucks and equipment.
– Are any vehicles altered, customized or have special equipment?
– Are all trucks equipped with fire extinguishers?
– Describe driver hiring, training and safety programs employed by insured.
– Are drivers assigned to specific trucks? Do drivers perform daily inspections?
– Are motor vehicle reports (MVRs) obtained for all new drivers? Are annual MVRs run for all existing drivers?
– What percentage of drivers are employees versus contract lease operators?
– Are any drivers under 25 years old? Over 65 years old?
– What are the maximum number of hours driven daily and weekly by drivers?
– Are pre-employment physicals required for all new drivers?

 

Source: American Trucker

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No Comments February 21st, 2017 Latest News, Other Commercial Lines

Uber And The Freight Business: Collaborative Partner Or Disruptive Competitor?

With over 30 million users a month in 425 cities in 72 countries, some would say that Uber is fast changing the face of global road transport.

The start-up, which was founded by Travis Kalanick in 2010, has severely disrupted the taxi industry in many cities around the world. And now it seems, Kalanick, whose company is now worth a staggering $70 billion, has his eyes firmly fixed on unsettling the logistics sector by establishing a new business line, Uber Freight. In August 2016, Uber issued a statement of intent by purchasing Otto, an autonomous truck company for over $600 million.  Recently, in an interview given to The Economist, Uber estimated that it could draw “20 percent of its future profits from trucking.”

So how exactly does Uber plan to turn the global freight business on its head? What are its aspirations? Details are sketchy and opaque at present. On contacting Uber’s media relations team, a spokesperson would only confirmed that it “didn’t have anything more to share on this subject at the moment,” but promised to reach out in the future when it did. But while Uber’s communications team chooses to remain tight-lipped, Kalanick has been fairly bullish about his company’s ambitions.

“Uber is definitely “getting into the trucking business,” Kalanick told German-owned online newspaper, Business Insider late last year.

Since giving the interview, according to Business Insider, Otto has begun advertising vacancies in both Illinois and California, which many recognize as the heartland of the U.S. logistics brokerage. And Eric Berdinis, a senior product manager for Uber Freight, has gone even further.

In October last year, Berdinis told Business Insider, “Uber’s aim is not just to create, develop and engineer self-driving truck apps that freight operators could buy and use, but to build a marketplace that would allow self-driving trucks to flourish.”

So, what will this new marketplace look like? More important, what are the unique selling points – the differentiators – that Uber believes sets it apart from traditional freight models? At the heart of its offering, says Business Insider, is a leading-edge freight app, not too dissimilar from its ride-sharing platform, which Uber hopes will enable shippers to connect to trucks in real time, thus eliminating middlemen, such as brokers altogether.

But with brokers earning as much as 20 percent in commission, some say, in theory at least,  that the new model that Uber is championing, in which the fee paid to Uber by the shippers is determined by supply and demand, could spell danger for the brokerage industry.

While only time will tell if Uber’s Freight offering is successful, it has a longer term vision in mind, seeing Uber Freight as a staging-post for mass autonomous truck take-up. As part of its blueprint, it plans to reach out to carriers and shippers with a symbiotic blueprint. In return for granting early adopters access to its technology platform, Uber hopes to benefit by collecting advanced driving data to feed its algorithms, which it sees as a stepping-stone to automation.

However, while Uber has made no secret of that fact that its ultimate goal is automated fleets, it stressed to Business Insider that “self-driving vehicles won’t be substitutes for human drivers in all situations.” But, for many in the industry, Uber’s masterplan raises some fundamental questions. Namely, can Uber, with its fledging autonomous freight business, really compete with established freight, haulage and logistics operators? Many have not only spent decades perfecting their service.

Many startups seeking to build trucking services have already tried and failed. Take Cargomatic, for example. In 2013, the California startup began to develop a real-time app, linking shippers to truckers and, more important, the available space in their trucks. While in theory the app made sense, in reality, according to Business Insider, only around 10 percent of the company’s business was generated through the platform. Perhaps, most tellingly, was Business Insider’s observation that the Cargomatic’s USP – the flow of real-time data between trucker, load and shipper – did not actually exist. Instead, information was being inputted manually and there was no real-time integration.

Five other match-loading startups, Convoy and CargoX, Transfix, CargoChief and TruckerPath are still attempting to blaze a trail, but Jonathan Wichmann, who worked as a consultant for Maersk for two years, says that the jury is still out as to whether startups can truly disrupt traditional markets. In an article written by Peter Tirschwell, a senior director of content within the IHS Maritime and Trade Group, Wichmann said that “the logistics business is not easy on the startups. There’s a reluctance among the big players to change their business models.”

But, it is a view that Evan Armstrong, the president of global third-party supply chain market research firm Armstrong & Associates, Inc., only partially agrees with.  There is very little that Armstrong does not know about transport, third-party logistics services and trailblazing startups seeking to corner the market for that matter.

In a recent conversation, Armstrong, whose market research firm recently produced a report titled “Digital Freight Matching – Capturing Technology-Based Efficiencies in the Trucking Industry,” related : “We carried out an in-depth analysis of the 27 digital freight matching companies that currently operate in this space. In short, our research revealed that while the startups were offering a high-degree of innovation, it still fell short of actually being able to solve many of the real-world challenges that the industry faces day-in and day-out. For example, while many of these apps are beneficial to the industry, in the way they harness real-time time data to accurately match a shipment to a carrier, or pinpoint truck stops; however, the transport sector is more complex than simple passenger ride-hailing. For example, there are different modes and equipment types, and no algorithm currently exists which neatly ties this industry together. If, for instance, you have a 2,000 kilo shipment destined for La Guardia Airport in New York, and the truck breaks down, the shipment cannot walk out of the truck and find another one. A reputable replacement carrier that can cover the load would need to be found quickly. At this point in time, human intervention is required to accomplish this exception handling.”

Armstrong continues, “So, it’s not that large third-party logistics providers such as C. H. Robinson and DB Schenker are not interested. They are. In June 2016, for instance, DB Schenker struck a deal with online freight platform, UShip Inc. to connect shippers with truckers online in Europe.”

However, Armstrong, who recently presented his findings at a roundtable logistics seminar at MIT, doesn’t believe any of these startups, Uber included, will be successful in disrupting the highly organic and innovative model that already exists.

“When we read the headlines about Uber Freight, it is easy to forget that multi-billion dollar, third-party logistics providers such as C.H Robinson, Coyote, TQL, XPO Logistics, DHL Supply Chain, and DB Schenker are already very efficient at managing transportation for customers. They have more carrier capacity and network scale, which drive superior pricing and operational performance, making them more competitive than any startup. “

Armstrong also thinks that industry-leading load board operations, such as DAT and Internet TruckStop, which help match million loads to carriers via their powerful applications, and freight trading platforms, like the Transport Exchange Group, which helps its 4,500+ member companies to reduce dead mileage and empty legs through several innovative online exchanges, also could make it very difficult for companies like Uber to flourish in the future.

“They have already developed integrated desktop and mobile applications for matching loads to carriers. The real-time technology has been programmed to understand the ‘load-matching’ requirements of shippers, brokers and carriers who operate in this highly nuanced logistics landscape. In addition, they have information on carrier regulatory compliance as well. Therefore, the software carries real-time reviews of carriers’ capabilities and insurance details, plus real-time updates when the load has been dispatched. The large scale of this existing visibility and collaboration is very hard to beat.”

So, does Armstrong see a future for Uber Freight?

“I don’t believe it can flourish as a company championing one stand-alone app. If it wants to grow, it will have to adopt a flexible and collaborative approach to the wider industry. Second, it will need to recruit world-class management staff who understand every aspect of the industry. And third, Uber Freight must put in place a transportation management/freight brokerage operation to support its application and allow it to ‘work out’ any transportation exceptions which may happen en route. While I don’t see it as being a threat to established players. Armstrong & Associates estimates the U.S. domestic transportation management third-party logistics sector to be worth $60 billion and its overall market potential is an estimated $380 billion, so there’s space for everyone to grow.”

But for anyone still fearing for the future, perhaps Armstrong’s telling anecdote will help provide some reassurance and prevent any more sleepless nights.

Recounts Armstrong, “I recently participated in a roundtable discussion at MIT which was centered on how Digital Freight Matching startups like Uber Freight were impacting the industry. In the room were over 25 experts from 3PLs and large shippers. While there was some interest in next generation freight matching apps, the discussion of apps got overtaken by shippers discussing Electronic Data Interchange, which is a problem that even a flashy app can’t fix.”

 

Source: SDC Executive

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No Comments January 10th, 2017 Latest News, Other Commercial Lines

Trucking Turns To Technology To Blunt Insurance Hikes

Trucking companies considering deploying on-board cameras now have another reason to adopt them: lower insurance costs.

Truckers using the new Greenlight smartphone-based dashcam can get discounts on insurance products of up to 5 percent from Paul Hanson Partners, which is working with Greenlight.

That’s no shabby incentive at a time when trucking insurance is increasingly expensive and harder to get, with insurance companies such as Zurich and AIG leaving the trucking market or curtailing coverage as jury awards in accident lawsuits against trucking companies climb higher and higher.

“We’re not too far away from insurance companies forcing commercial fleets into using some type of telematics as a precursor to obtaining insurance,” said Jason Green, CEO of Greenlight. Insurers may wind up playing as big a role in the adoption of safety technology as regulators. Actuaries are going to have hard numbers on the difference in incidents for those who are using dash cams and those who aren’t. We’re getting a lot of presales and a lot of interest in Greenlight, because we tie it to an insurance discount through PHP.”

On-board cameras are just one tool that trucking companies may turn to as they try to blunt insurance costs that jumped significantly in 2016. Rising liability insurance costs are a concern to trucking operators and their shipper customers. Higher insurance costs not only put pressure on transportation rates, they threaten to force smaller trucking operators with fewer insurance options out of the business.

Green claims his company is unique in tying its forward-looking mobile dashcam and driver management system to lower insurance premiums, but he’s not the only one who sees a potential for cameras and other on-board safety systems to drive down insurance costs, or hold increases at bay.

“We’ve certainly seen an increase in auto liability severity,” Todd Reiser, vice president of transportation at Lockton Companies, said during a conference call with reporters last month hosted by Stifel Capital Markets. “In the past, worker’s compensation was more a hot button. That’s changed in recent years as claims become more severe. A million-dollar claim 10 years ago, unfortunately, now we’re finding is a three-, four-, five-million dollar claim.”

As a major trucking insurance broker, Lockton has broad visibility into the market.

“We’ve seen some major settlements and verdicts in 2015-16,” Reiser said. “One example is a $35 million jury award in a fatal truck crash in Texas. Those types of awards should concern shippers, too. Plaintiff attorneys can slap shippers with negligent hiring liability lawsuits following truck accidents.”

Reiser cited “a massive increase” in the use of on-board cameras as trucking companies and drivers gain experience with them.

“We’re finding more and more carriers are piloting cameras or have gone ahead and done the full implementation and are seeing significant impacts and frankly exonerations in cases where they may have been targeted for liability initially,” Reiser said. “As for trucking insurers making telematics a prerequisite for coverage, I see it moving more and more toward that direction. If you have all these various technologies we are sort of going to put you in a different category than those that don’t. The underwriting community has certainly embraced certain aspects of truck safety technology and for the first time … we’ve had underwriters say we will provide some sort of discount or credit as far as when and how truckers implement the technology.”

Reiser referred to lane-change warnings systems and collision mitigation systems as well as on-board cameras, but on-board cameras, in terms of cost, are an easier choice for many carriers. Greenlight wants to make the choice easier by replacing cameras with smartphones.

Replacing stand-alone cameras wasn’t what Green initially had in mind. His career has largely been focused on developing the point-of-view camera, first with a company called Twenty20 that he co-founded and later with Contour, a GoPro competitor now part of iON Cameras.  Greenlight started out as an onboard video recorder.

“I was looking at dashcam recorders. People were putting a camera on the windshield, and I thought, man, we could do this better using the phone. The big challenge was making it robust,” Green told JOC.com.  “Once we had that, we realized we had a telematics device that could capture data and video together from one source with very minimal hardware.”

A dash-mounted cradle works with iPhone and Android phones, and a mobile app converts the phone into a dashcam. In addition to video, drivers, as well as fleet managers and insurers, can see data from the system, including information on their performance during recent trips and safety scores.

“Some of our partners use the system for training,” Green said. “We will use the data to flag drivers when we see signs of a risk, hard braking, for example. We can send them training videos automatically. When they complete training it gets noted in the insurance account.”

Green initially had the consumer market in mind, and a consumer version of the product is available for $49.

“We got pulled into fleets because the opportunity is so good,” Green said. “You look at the cost of fleet operations and insurance and you can see why the need is so high.”

The initial market for the system is not over-the-road long-haul trucking, but final-mile logistics providers and local delivery companies.

“We started by looking at companies operating straight trucks and cargo vans, but we’re getting a lot of attention from the Class 8s,” Green said.

He recommends trucking companies pay their drivers an incentive to use their personal phones as cameras.

“You’ll reap the rewards in insurance costs,” Green said. “Also, a smartphone used as a dashcam is a smartphone that’s not being used for texting or phone calls while driving. Everybody knows the smartphone is a distraction. We’re putting it to work, so it’s less likely to be a distraction.”

 

Source: JOC

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