Help new transportation businesses get their wheels turning with these risk management tips.
For those looking to join the trucking industry—which has relatively low barriers to entry despite being considered the lifeblood of the American economy—navigating the ins and outs of an evolving, dynamic industry can be difficult. In addition to providing insurance coverage, agents can help new transportation businesses get their wheels turning.
New ventures must “consider all aspects of becoming an owner-operator, from revenue and cost projections to the demands on personal time and the ability to plan for the unexpected," says Donato Monaco, president of Northland Transportation.
When it comes to seeking advice from experts in the industry “starting with an agent that specializes in the trucking market is paramount," says Nick Saeger, assistant vice president of products & pricing for transportation, Sentry Insurance. “Those agents understand the business and know what it takes to find the right insurance partner."
Here are three ways agents can help new clients in the trucking industry:
1) Help clients discern insurance choices. An independent agent “can add value by providing an overview of key product features that may vary from one insurance carrier to the next," says Peter Niro, truck product development manager III, Progressive Insurance. “It's important to understand each carrier's offering so that a client is purchasing adequate coverage for their business."
Another way new businesses can hit the ground running is by “working with an experienced agent and selecting a quality insurance carrier that can provide risk management, expansive coverage and protection such as roadside assistance and towing, and a premier claims service," Monaco says. “Some carriers have established partnerships with industry service providers that offer driver training and electronic logging devices, and some may offer discounts on these services."
2) Encourage regular maintenance and inspections on equipment. “Whether leased or financed, equipment breakdown resulting from poor maintenance can lead to increased downtime, higher costs, significant damage and even injury or death," Monaco says. “The fortunes of trucking operators depend on continuous uptime."
Company owners should understand that “insurance companies that are dedicated to truck insurance understand the coverages that are necessary—they also have claims people that are focused solely on those claims and know how to resolve them and get truckers back on the road," Saeger says. “On top of that, they also have safety consultants that can help avoid accidents in the first place."
3) Keep clients up to date with loss trends. The trucking industry has seen an increase in cargo thefts, with an estimated $223 million worth of cargo in Canada and the U.S. stolen in 2022, marking a 15% increase in supply chain risk events from 2021, according to CargoNet. Given the uptick, trucking businesses need to be aware of the trend as well as how carriers and agents are able to assist them.
“When we work with our clients on prevention, we take a layered approach—awareness is critical," Scott Cornell, transportation lead and crime & theft specialist, Travelers. “Are you disseminating that information out to your staff—in particular, your drivers—so that they know what's being stolen, how and where? Your drivers are your best first line of defense, so empowering them with this knowledge will help them understand why the policies you have in place are necessary and will likely increase their diligence on the job."
Planning routes carefully, avoiding high-risk areas and implementing strict security measures, “such as high-security locks, GPS tracking devices, and security cameras at loading and unloading locations," says Mike Yonka, corporate safety services specialist, Sentry Insurance. “Another key factor is training employees on how to prevent cargo theft, as well as conducting thorough background checks on all staff."
Contingency planning is always a good idea if there is a theft of a truck or its cargo. Make sure “your clients are aligned with any resource that would immediately be able to begin working outside of regular business hours—like at 2 a.m. on a Saturday, for instance—to recover that load," Cornell says. “The longer you take to respond to a theft, the much less likely it is that you will be able to recover what's stolen."
Olivia Overman is IA content editor.