Understanding the Truckload Marketplace in a Sea of Uncertainty
Mar 4, 2020
BY MIKE REGAN, CO-FOUNDER AT TRANZACT
Having attended numerous conferences recently, one thing that struck me is that everyone I talked to agreed on one key point: there's more uncertainty in the freight marketplace right now than anyone has ever remembered seeing.
The rise of digital freight brokerages, the fall of carriers into bankruptcy, and the coronavirus are just a few of the conditions causing even the best plans for carriers to be called into question.
To get a better idea of what to expect ahead, I reached out to my friend Derek Leathers, the CEO of Werner Enterprises, to get his insights. Derek has been working in the trucking industry for over 20 years and heads up multi-billion dollar operation.
Carriers like Werner want to align with “winning shippers” who are strategic about their planning and Derek illustrates what these look like to him.
Derek also covers an issue that affects his company and competitors significantly - the rapid rise of insurance rates. Big payouts have lead to double digit increases in trucking insurance rates and has come at a time when many companies are already hard pressed.
As Derek pointed out in our interview, “If you think about the requirement currently it's $750,000. That’s not enough insurance to carry to get you through even one severe accident.
And the reality of the roads today is that they’re more congested. Driver distraction by the four wheelers all around these professional drivers is greater than what I’ve ever seen and behaviors are erratic on the roads.”
In the article Surging Truck Insurance Rates Hit Freight Operators, WSJ's Jennifer Smith highlights how insurance rates were the sole reason for a carrier closing in some cases and how even a small accident can cause an insurer to panic and escalate rates.
Derek touches on other areas of uncertainty in the interview and we encourage you to listen to his insights.
We wish we could go further and give you a crystal ball to guide your planning, but in today's environment the best bet is to stay informed.
If you'd like to discuss how these issues could affect your truckload costs and plans, give me a call or send me an email.