Ripple Effect

As the trucker shortage becomes more acute, companies look for new ways to keep trucks on the road.

 By Patrick Owens and Stephen Washkalavitch

Across the country, a significant trucker shortage is causing a ripple effect throughout the economy. It’s projected to only get worse. Currently, according to the American Trucking Associations, there are 51,000 open positions – up from 20,000 in 2013 – and that number is estimated to nearly double to 100,000 job vacancies over the next three years.

What’s fueling this shortage? There are several motivating factors, a significant one being an aging male-dominated workforce lacking a younger talent pool ready to step in. The Bureau of Labor Statistics estimates that the average age of a commercial truck driver is 55 years and only six percent of the workforce is comprised of women.

Additional pressure is coming from the roaring economy and the proliferation of e-commerce shipments, particularly from Amazon. All in all, it creates a market condition of unprecedented demand for shipping at a time when the workforce is rapidly shrinking.

As trucking and logistics companies – both major national players and smaller mom-and-pop firms – scramble to hire quickly, it presents several challenges from a safety perspective. For example, it’s critical to thoroughly vet job applicants’ credentials, with strong emphasis on past accident history. Recently, the American Transportation Research Institute, after analyzing data from over 435,000 truck drivers over a two-year timeframe, uncovered nearly a dozen behaviors that raise a driver’s risk of a future accident by more than 50 percent. These behaviors included prior crashes, reckless driving citations and convictions.

Equally important, the rush to attract younger applicants must be taken prudently to avoid the risk of potential age discrimination lawsuits. While social media sites such as LinkedIn and Facebook can be efficient tools for finding talent that meets a company’s search criteria, it’s critical that digital hiring practices are in full compliance with the U.S. Equal Employment Opportunity Commission (EEOC). Over the last year, the American Civil Liberties Union and the Communications Workers of America (CWA) have sued companies – including Amazon, T-Mobile and a hauling company – alleging the companies used Facebook’s ad targeting tools to exclude older Americans and women in job postings.

As the truck driving shortage becomes more acute, companies are naturally looking for other ways to keep their trucks on the road. This creates another potential safety issue with drivers working long past the retirement age of 65, and companies even looking to recruit retired drivers back into the workforce. According to a CBS News analysis, accidents among commercial truck and bus drivers in their 70s, 80s and 90s soared by 19 percent from 2013 to 2015.

Although many people wouldn’t readily think of truck driving, when asked about the country’s most dangerous jobs, statistics from the Bureau of Labor reveal that one out of every six American workers killed on the job is a tractor-trailer driver. In addition, heavy and tractor-trailer drivers have the highest incidence of nonfatal injuries and illnesses, and rank sixth for related days missed from work. From an insurance liability perspective, this represents significant risk and costly claims related to vehicle damage, injuries and workers compensation. Consequently, the industry has experienced one of the fastest-escalating increases in insurance rates compared to all major commercial segments, according to Verisk Analytics.

In an effort to improve safety while keeping insurance and logistics costs down, many distribution companies are embracing technology solutions to decrease premiums and reduce liability risks. For example, telematics systems will provide data relating to an employee’s history of speeding, harsh braking and even seat belt use. By monitoring on-road performance, managers can improve the overall safety of their fleet by providing tailored education or requiring additional training for repeat offenders. Taking steps to improve the individual safety habits of drivers will significantly decrease the chance of an accident.

Importantly, the U.S. Department of Transportation reports that 80 percent of accidents involving heavy commercial vehicles are not the truck driver’s fault. Despite not being at fault, trucking companies are often named as defendants in litigation, due to the company’s availability of high limits. This makes implemented video-based safety technology incredibly important for documenting what actually caused the accident, which greatly strengthens a defendant’s case. There are countless other technologies that should be vetted, such as devices that turn off texting and other cell phone distractions, and collision-avoidance systems that alert a driver immediately of potential hazards from pedestrian and cyclists, along with other vehicles traveling in dangerously close proximity.

From a shortage of labor to inherent safety risks with driving long distances, logistics companies are grappling with a variety of issues that increase liability exposure and negatively impact insurance costs. To help navigate this challenging environment, an insurance broker – with deep knowledge of safety training and hiring best practices – can be an invaluable resource. When it comes to technology, it presents a significant investment, and there’s a rapidly growing and dizzying array of solutions on the market. An experienced insurance broker can help provide guidance on where it makes sense to invest to offset risk, while also ensuring vehicles are in full compliance with emerging insurance standards.

Patrick Owens is a producer at Graham Company. Owens fosters new business relationships by providing first class organizations with comprehensive risk management strategies and individually-tailored insurance programs. 

Stephen Washkalavitch is a producer at Graham Company. Drawing from 13 years of insurance and consulting experience, Washkalavitch designs and brokers comprehensive insurance programs and long-term risk management strategies.