SECTOR FOCUS: TRUCKING
Driving through the fog The trucking insurance sector is experiencing a serious shakeup, but it still represents an opportunity for agents to drive up profits
THE COMMERCIAL auto segment – and the trucking industry in particular – is in the midst of significant transition. Technology is revolutionizing the way companies are run and drivers are managed, and the rapid growth of online retailers is fueling more demand for delivery services than ever before.
stringent, and business owners are forced to take on significant risks, both from an economic and an insurance standpoint. Despite new challenges from all angles, the trucking industry’s recent performance has been very strong. Jimmy Proffitt, head of transportation at Risk Placement Services,
“The industry is a tougher endeavor today than it has been in the past, both from a trucking standpoint and from an insurance and risk management standpoint” Jimmy Proffitt, Risk Placement Services It remains, however, a notoriously difficult business in which to succeed. Margins in the trucking industry are increasingly thin, so companies have to be very well run to be successful. The sector requires heavy capital investment, compliance requirements are
describes the recent growth as “terrific.” “The economy drives the success of the trucking industry, and in the past few years, the external factors have been outstanding – probably as good as I have ever seen in my career,” Proffitt says. “The demand for
trucking is as high as it’s ever been: Goods are shipping, freight rates are as high as we’ve ever seen, and load boards are full. However, we are starting to see indications that the economy may pull back, with rising interest rates, trade uncertainty with China and political instability – that is definitely starting to affect some things.” Currently, though, the only significant factor inhibiting trucking firms is a shortage of qualified drivers. With demand running high and freight rates rising, there is a temptation to put unqualified drivers in trucks – a move that seriously increases a company’s risk exposures. It also creates a challenge for Proffitt, who is constantly trying to educate trucking clients on the importance of staying
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