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