Difficulties of insuring commercial trucks
Log truck insurance markets tightened dramatically.
Unfortunately, the trucking side of raw forest products production is deteriorating rapidly. I’m concerned that major restrictions on production are coming as the driver shortage grows and the ability to insure trucks become a much bigger problem.
Most of those involved with the production — logging — side of the industry will have no choice but to adjust their production to their ability to haul raw forest products.
I have yet to hear much from the wood consumer — mills — side of the forestry industry saying their inventories are suffering, but many mill representatives have expressed their sincere concerns about the situation.
Truck Driver Shortage According to the American Trucking Association (ATA), nationwide commercial trucking in the United States was 50,000 drivers short at the end of 2015 and predicts that number will exceed 100,000 by next year. Some drivers are retiring; other drivers are no longer meeting insurance or governmental guidelines; and still other drivers are simply getting burned out driving trucks. Those are major factors in this rapidly increasing driver shortage. Let’s face it, there are very few young folks interested in driving trucks for a living. I don’t know any, do you?
Insurance Concerns
Note this information from major credit rating agency Fitch Ratings-Chicago: “U.S. commercial auto insurance has evolved into a chronically under-performing product segment for U.S. property/casualty insurers ... While the property and casualty industry has reported three consecutive years of significant underwriting profits, the commercial auto market reported an underwriting loss for the fifth consecutive year in 2015,” according to a report from April 28, 2016.
From another prospective, in its outlook for 2016, global insurance broker Marsh noted that “many insurers have seen their combined ratios deteriorate as commercial automobile loss frequency and severity has increased. As a result, Marsh predicted that brokers and insureds will need to look at alternative markets. Insureds and insurers need to focus on loss control techniques, including driver safety training, fleet maintenance and the use of telematics through vehicle monitoring devices”, Marsh said.
Forest Industry Specific Solutions
The forest industry must begin to train and require professional drivers or insurance will become very difficult to attain. Some owners and managers, in the back of their mind, say “We can’t do that,” because we can barely make it work now.
I say the forest industry must take this step now or we will all suffer much greater consequences in the long run.
Adequately trained drivers and well-maintained trucks/trailers will come at a price and adjustments will have to be made on the trucking side of the production equation.
Movements to improve haul logistics by reducing loading and unloading wait times, as well as utilizing back hauls to improve truck revenues, should all be considered. Unfortunately, these improvements will not offset the cost needed to afford the trained professional drivers and equipment upgrades many wood production operations need.
Let me say this loud and clear
There are a number of well-run wood-hauling operations that do a great job representing the forest products industry across the United States and they should be commended. Unfortunately, they are having to suffer the consequences brought on by those “in the boat” with them that are not doing things the right way.
Before the wood supply chain can return to a sustainable and profitable process, the changes noted here must begin immediately. Remember, our families and friends are traveling the highways with these log trucks that provide a living for most
of us. We should all want trained professional safe drivers driving them.
(Jimmie Locklear is one of the founders of TEAM Safe Trucking and its communication committee chairman.)
