We’ve seen them all over the place, companies slapping a nice-sounding safety message on their trailers. When a company claims safety to be its top priority, we trust their word to be golden. But are these carriers actually adhering to their mission statements? Only they can answer that question.

Robert Kaferle, Reliance Partners’ director of safety, explains the simple secret to legitimize any safety program, from companies small to large.

“A successful company will empower their people to call out with critical comments and bring solutions to the table,” Kaferle said. “The way to instill this is from the top down, developing a program where everybody’s opinions are met and valued, everybody is empowered to bring problems to the forefront and offer solutions.”

This means everyone — all members of your organization — can voice their concerns on any issue without fear of reprimand.

From a driver refusing to haul a dangerous load to a driver manager explaining to a customer that its driver cannot deliver any faster to a maintenance professional refusing to let a truck operate using poor components, while safety is preached from the top down, its practice starts from the bottom up. Kaferle said that good decision-making should be rewarded at all levels of the organization.

While prioritizing safety over profit is a noble pursuit, good intentions don’t necessarily produce good results. No company should treat safety as a competition, merely pointing fingers at perceived problems and keeping tally. If a company is to truly buy into a “safety culture,” then it must be ingrained into every employee that they represent one team and one team only.

“Frontline employees shouldn’t be competing against each other department to department,” Kaferle said. “If there is a roadblock, then they should be able to communicate that either with their manager or the manager of another department, of which managers should welcome. The one thing that each manager has in common is that leadership vision from the top, and every decision made should be working towards meeting that vision.”

Like any company project, Kaferle said that starting an effective safety program starts with a vision of the end result. What are you wanting to achieve? With the goals in mind, then you can work backward to create a solution.

Kaferele said that restructuring one’s safety program can be quite a paradigm shift for some areas of management. Team members who treat their daily tasks at hand — as well as safety for that matter — as just boxes to check in order to go home every day might find it hard to take criticism.

He explained, “The biggest headache that comes with instituting a program like this occurs on the management level where they’re used to just telling people what to do and having them do it, especially with those not used to being given suggestions or are struggling with their directions not being followed.”

Kaferle challenges management teams to look for ways to be a part of the greater solution, as the only way a culture of safety can be upheld is through the encouragement of leaders at all levels of the company.

Kaferle recently helped a 390-power-unit carrier overcome its safety issues. He said that its culture entailed a management imbalance in which drivers were allowed to operate by their own rules and frontline employees felt discouraged to voice their opinions without getting in trouble. It wasn’t hard to find the problem: The company lacked a vice president of safety. This crucial position was vacant to counteract any ill-advised decisions, as operations leadership was unopposed.

“The motor carrier took my recommendations and is now working towards restructuring their safety operations and empowering their people to follow this plan,” Kaferle said. “It’s being put into place and it appears to be in a good spot to start working very quickly.”

Company size is irrelevant when it comes to successfully instilling a safety culture, according to Kaferle. Regardless of the number of drivers, assets or scope of the office environment, every company has its own culture. It’s best to think of safety not through the lens of a rulebook, but Kaferle instead urges carriers to consider it an organizational thought process.

Your company culture starts with you.

The post A true safety culture gives everyone a voice appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

This July marks the first anniversary of the adoption and implementation of the United States-Mexico-Canada Agreement (USMCA). The agreement has brought about new opportunities for cross-border trade; is your organization taking advantage of these changes?

With close to $2 billion in trade flowing across the U.S.-Mexico border daily, it’s imperative that logistics service providers know what’s at stake.

Reliance Partners’ Borderless Coverage offers USMCA and international trade consulting to businesses looking to gain an advantage in terms of cost savings and trade performance as this new age of cross-border trade takes shape.

“The Borderless Coverage team consists of business-minded cross-border supply chain consultants, insurance experts, economists, lawyers and global trade agreement negotiators,” said Mark Vickers, executive vice president of international logistics at Reliance Partners. “We provide USMCA and International Trade Agreement Consulting with a specialty in insurance.  Our unique approach covers all angles of analysis and integrates all legal, economic and international supply chain viewpoints.”

The United States’ renegotiation of the nearly three-decades-old North American Free Trade Agreement (NAFTA) is intended to mutually benefit the economies of the United States, Mexico and Canada.

Vickers said that USMCA has cut through some of the red tape associated with North American cross-border trade and describes it as a catalyst for cross-border process automation.

North American logistics providers have already found favor in its de minimis increase, establishing that no more than 10% of either the total cost of the good or the transaction value for the good can be made of non-North American components. The threshold set by NAFTA was 7%. Vickers called this a big win for companies conducting trade across North American borders.

Furthermore, the agreement aims to preserve, re-shore and stimulate vehicle and parts production in the U.S. by elevating the regional value content (RVC) for automobiles from NAFTA’s 62.5% to 75%. USMCA also demands that 70% of all steel, aluminum and glass used in the production of the automobile must originate in North America.

Vickers said goods adhering to these de minimis rules are less likely to be held at customs and are expected to arrive at their destinations much faster. Regulators hope these terms will spur greater interest in Mexico as well as Canada, catching the eyes of small and medium-size enterprises looking for lower production and delivery costs within their supply chain networks.

“Borderless Coverage’s team of international supply chain experts, consultants and contract negotiators utilize these de minimis provisions to not only check compliance with the USMCA but also facilitate a more seamless international trade process for companies looking to enter the dynamic North American market,” Vickers said.

In addition, Vickers detailed USMCA’s changes to intellectual property safeguards, explaining how they extend NAFTA’s copyright terms from 50 to 70 years, and also provide 10 years of data protection for biologic drugs.

He also praised USMCA’s certificate-of-origin requirements, which he said make it much simpler for international shippers to be approved for preferential tax treatment. USMCA allows importers to complete a certification of origin to include nine required data elements as well as a certification statement. Certificates of origin under NAFTA could only be signed by the exporters and producers of goods. In addition, certificates could only be signed by pen, not electronically.

Borderless Coverage facilitates the completion of the certification of origin so that both parties receive information fast and properly. Vickers added that its experts can help certify the form and receive the preferential tax treatment needed to thrive when shipping cross-border.

But despite its positives, USMCA has been unable to fix all cross-border issues.

Many shippers and logistics service providers remain reluctant to set up shop in Mexico. A leading factor has been the ongoing U.S.-China trade war, but Vickers said other factors such as COVID-19 and insurance discrepancies between the U.S. and Mexico have slowed efforts to bring manufacturing south of the border.

Mexico is currently the United States’ largest goods trading partner, with $614.5 billion exchanged between the countries in 2019. However, the trade relationship isn’t as cordial as the statistics would suggest.

USMCA doesn’t appear to have a solution in the works to curb the cargo thefts and hijackings that have long frustrated companies operating in northern Mexico, which have resulted in the closure of many small and midsize area businesses. The unpredictable nature of these all-too-common crimes has forced carriers serving the region to settle for large and unfavorable insurance policy deductibles.

Vickers explained that most shippers don’t understand they are self-insuring when moving across the border, mistakenly believing that a carrier’s $100,000 cargo insurance policy will surely extend into Mexico, which isn’t always the case. In fact, Mexico only requires carriers to be liable for just 2.5 cents for every pound transported, whereas U.S.-based motor carriers can be held liable for up to $1 million in cargo loss.

“Until this is addressed in future provisions of USMCA or another agreement, logistics service providers and shippers who are moving freight in and out of Mexico should have a Borderless shipper’s interest cargo insurance program in place,” Vickers said. “Borderless Coverage, powered by Reliance Partners, has a program available specifically for this so companies of all sizes can obtain cargo insurance on all their shipments whenever they need it and at deductibles as low as $500.”

The post Cross-border consulting helps navigate USMCA ups and downs appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

Semi trailers are able to haul a vast array of commodities. Though more or less identical, the trailers that crisscross our highways carry freight of all shapes, sizes and values.

Loaded trailers may be indistinguishable from one another, but not to insurance policies. Trucking companies keep a sharp eye out for payload discrepancies and are known to limit their liability significantly for high-priced freight.

Limits put a ceiling on the amount that a carrier will pay out on a load in the event that a claim is filed. Many opt to just increase their entire policy limit or rely on the saving grace of shipper’s interest policies to secure proper coverage. This scenario plays out daily for freight brokers, who find that closing loopholes and insuring the actual dollar value of a shipment is tedious work.

However, there is now a one-click solution for this crucial process.

Insurance and InsurTech leader Reliance Partners now offers utilization- or usage-based insurance (UBI) — a new way of quoting and securing coverage. Insurance can be booked on a per-load or per-day basis and distributed through a transportation management system (TMS) or load board with just a tap of the screen.

“One click is all that’s required to buy the coverage needed for a load,” said Micah Keith, Reliance Partners’ senior director of sales. “It really improves operational efficiency, reduces costs and mitigates risk on a pay-per-use basis; it’s a much smarter way of looking at coverage.”

Reliance Partners offers usage-based coverage for primary and excess auto liability, primary and excess cargo, truckload, less-than-truckload, trailer interchange and more for domestic, cross-border and international freight. Through application programming interface-enabled solutions, Reliance Partners can integrate directly into your TMS, allowing for instant insurance when you need it.

Keith points out that Reliance Partners’ UBI coverage is risk-inclusive, closes insurance gaps and covers virtually all commodities so long as it’s rated correctly.

“Not everyone is aware that their primary or excess cargo policy might not cover everything and that they have another option besides increasing their entire limit to work with one new customer,” Keith said, arguing that a brokerage doesn’t have to go well over $250,000 for all of its cargo limits, but instead can keep its normal limits and tack on shipper’s interest as the need arises. He suggests this strategy could save brokerages a lot of money while providing best in class coverage when needed.

Reliance Partners’ UBI rates are customized and structured based on each policyholder’s unique business needs. This increase in operational efficiency enables freight brokers, freight forwarders, carriers and shippers the freedom to expand their carrier networks with higher excess limits available as needed.

The post The smarter way to secure shipper’s interest coverage appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

March’s truck transportation employment figures can be viewed as a glass half full or half empty — both perspectives have merit.

According to the U.S. Bureau of Labor Statistics (BLS), total jobs in March were recorded at 1,482,700, up 3,300 from February’s tally — a sign that things are headed in the right direction.

On the other hand, March’s figures totaled 33,500 fewer truck transportation jobs than last March, just as the industry was on the precipice of the pandemic — a sign that we may still be in the early stages of recovery with a long road ahead.

“The economic recovery has been accelerating over the last two months or so, and promises to have very vigorous economic growth,” said Reliance Partners Chief Financial Officer Thom Albrecht, who suggests that gross domestic product (GDP) growth may rival that of 1983’s economic growth of 7.9%. “There’s a good chance that economic growth will be between 6% and 7% this year, so it is improving; it’ll be more visible in the job numbers as the year unfolds.”

Albrecht notes that this recovery is unlike most, given the circumstances of the sudden shock to the system last spring. He said that the recovery of jobs is typically known to lag GDP growth, as company cost-saving strategies are in place by the time the economy finds itself on the upswing.

This time around, many jobs were lost seemingly overnight. While many drivers found employment soon after, others have yet to regain their footing in the industry. But Albrecht expects more jobs that were lost to be recovered over the course of the year.

Whereas companies last year hunkered down by slashing capital spending budgets, this year looks to reverse those trends. Albrecht anticipates companies will be more willing to greenlight expansion plans, creating more jobs in flatbed freight hauling — a sector that saw a slump last year.

“As you peel the onion back, you start to get into some of the other issues that require a little bit more thought, like what employment issues are structural versus cyclical? What job groups are recovering or lagging? What jobs aren’t coming back? There’s a lot of questions within that broader topic of the jobs market,” Albrecht said.

While the trucking industry aims to bounce back to pre-pandemic performance levels, the question remains whether or not its labor force can achieve long-term growth post-recovery. After all, BLS data shows that employment of heavy and tractor-trailer truck drivers is projected to grow at just 2% from 2019 to 2029, slower than the average for all occupations.

The elephant in the room is trucking’s ever-present shortage of drivers — a significant factor being the advanced age of the existing workforce. According to an American Trucking Associations survey, the average age of a driver in the for-hire over-the-road (OTR) truckload industry is 46. In comparison, BLS data shows that the median age of the U.S. labor force was 41.9 as of 2019.

Albrecht isn’t optimistic that trucking will see an influx of new drivers anytime soon.

“Ultimately, one carrier’s driver success will probably be at the expense of another carrier,” Albrecht said. “For the most part, truck drivers will continue to be swapped around as opposed to [the industry] gaining a large, new infusion of people to the truck driving population.”

Although freight demand will continue to trend upward, he believes that driver hiring will remain perhaps the biggest challenge for the trucking industry this decade. “The demand will be there, but the question remains if fleets will participate in the niches that are growing at or above GDP rates,” he added.

In addition, the U.S. labor participation rate, currently 61.5%, has gradually improved since bottoming out last April at 60.2%. However, the current labor market has a long way to go to reach pre-pandemic rates of approximately 63%.

“It doesn’t sound like a whole lot [of change], but what’s not captured in those statistics are the estimates showing the 3 or 4 million people that haven’t returned to the workforce yet due to discouragement by their job prospects,” Albrecht said, adding that the current rate of 61.5% isn’t that healthy, considering that the rate was closer to 66%-67% in the 1990s.

If driver classes indeed yield fewer graduates in the coming years as many predict, then fleets will have to look internally for methods of retaining their current workforce.

“Every carrier that I’ve talked to is pulling every lever that they can think of,” Albrecht said.

More and more fleets are utilizing pay increases to not only attract drivers, but retain their veteran workforces. Albrecht describes compensation as just about the only factor keeping drivers from leaving the negotiating table.

Earlier this month, Knight-Swift announced raises for its drivers — the latest in a series of pay increases and incentives enacted within the past six months. April’s announcement detailed an increase in pay per mile of 2 cents for its OTR drivers. Similarly, a 3- to 5-cent increase was announced for its OTR independent contractors.

It’s reported that experienced drivers can begin earning more than 50 cents per mile, with some even earning more than 60 cents per mile in certain regions of the country. In addition, the post-training pay of new recruits has reportedly increased by at least 40%.

Crete Carrier and Shaffer Trucking also announced plans to increase driver pay for its regional and national OTR fleets. Starting in May, new OTR drivers will see pay rates between 59 and 65 cents per mile, depending on experience level. FreightWaves reported that the carrier expects its pay increases to place its top-tier OTR drivers at an average annual pay rate of $89,300 — an unprecedented number among most truckload companies, Albrecht explained.

Old Dominion Freight Line also announced its push to hire 800 Class A CDL truck drivers over the next three months. The company stated that all new hires will receive annual pay ranging from $73,000 for pick-up and delivery drivers and $99,000 for line haul drivers, among other benefits.

BLS data shows the median annual wage for heavy and tractor-trailer truck drivers was $47,130 in May 2020. Furthermore, the lowest 10% earned less than $30,660, while the highest 10% earned more than $69,480.

“I believe [wages] will remain sticky. They’ll go up and stay up, but driver pay will probably level off just as freight market rates level off next year,” Albrecht said. “But with [freight] rate increases, you really have no other choice but to go out and raise driver pay, too, if for no other reason than that most of your competitors that you’re competing against for drivers have already been doing that.”

This decade is shaping up to be a major transitional period for the trucking industry. As advances in technology, as well as new rules and regulations continue to change the dynamics of the job, trucking companies will also have to deal with the ever-changing demographics of the workforce.

Putting new faces behind the wheel may very well be the key to the industry’s resurgence. Albrecht believes that the industry’s labor rates may improve if nontraditional demographics are proactively recruited.

While efforts have already been made to engage more Hispanics and African-Americans, Albrecht suggests fleets consider targeting the female demographic as well. He also makes the case for Indian drivers and those of Eastern European backgrounds — subsectors of the trucking industry which he believes don’t get enough attention.

Albrecht notes that Reliance Partners has a staff who speak a total of 25 languages to better serve the diverse trucking landscape. That includes lesser-spoken languages in the U.S., such as Russian, Croatian, Ukrainian and Punjabi. “We have dozens and dozens of employees that are multilingual. Reliance Partners actively recruits prospective employees who speak multiple languages.”

He continued, “Compared to 20-25 years ago when the typical driver profile was a white male from the southern half of the U.S., the explosion in drivers from other cultures is often one of the untold stories in trucking.”

“It has to be one of the levers that fleets are willing to consider,” Albrecht said. “With driver schools still not at full capacity, the Drug and Alcohol Clearinghouse still impacting the availability of drivers, and the overall aging of the demographics, many fleets are fighting an uphill battle.”

The post Truck transportation job growth — cause for celebration or concern? appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

Trucking has historically been and continues to be a male-dominated industry, but a significant number of women have found their niche in a “man’s world.”

Commercial trucking in the 21st century attracts drivers from all walks of life; wealth creation’s only criteria are hard work and persistence. Regardless of nationality, ethnicity or gender, opportunities abound for anyone aspiring to climb aboard a big rig.

However, as diverse as the trucking landscape is, the road to success may feel staggered for many minority drivers. The industry is not without remnants of stigmas and sexism, which may partly explain why women make up only 7.8% of the 3,364,000 U.S. truck drivers on the road in 2020, according to Department of Labor data.

For some, this statistic may invoke a call-to-action response, while others may simply view it as the natural order of things — whatever the case, trucking’s ever-changing demographics make the thoughts and opinions of minority drivers increasingly an invaluable asset.

FreightWaves caught up with a female owner-operator for her perspective on trucking. For reasons of privacy, the driver, a client of Reliance Partners, requested that we refer to her simply as “Wendy” from Washington state.

In many ways, Wendy isn’t your typical trucker; she’s a mother of five children who got behind the wheel later in life. As women account for only 4% of owner-operators, Wendy’s testimonial is particularly insightful.

Wendy’s reason for taking up long-haul trucking is similar to that of most drivers: She wanted a good-paying job to support her children. While she entered the industry later in life than most typically would, Wendy was no stranger to trucking.

“Living in a mill town, I didn’t have a negative opinion of truck drivers at all, as I was familiar with log trucks. When we learned to drive [growing up], we were taught to give trucks the right-of-way,” Wendy said, adding that her first husband was a log truck driver.

Her 16 years on the road are made up of a handful of stints with motor carriers, including dry van, tanker hauling of agricultural products and fertilizers — having earned hazmat, doubles and triples endorsements. Her wide array of freight has taken her through the majority of the Lower 48, with additional trips through nine Canadian provinces on top of a few Alaskan excursions.

Years of fleet driving experience gave her the confidence to start out on her own. “Honestly, there’s no perfect-fit company out there,” Wendy said. For now, she sticks to hauling dry van trailers throughout the Pacific Northwest, hitching everything including recycled paper bales, small tractors, charcoal briquettes, beer and garbanzo beans.

Like most drivers, Wendy summarizes her fleet career as a learning period with its ups and downs. However, she feels that being a mother added an additional strain at times, as she often found it difficult to balance good scheduling and pay with the needs of raising five children.

In addition, Wendy experienced a fair share of prejudice from coworkers and other drivers. She mentioned an instance in which her engine would start first thing in the morning but every start after that may or may not happen. The shop foreman finally addressed the situation and proclaimed that it “starts just fine,” much to the frustration of Wendy, who knew that the underlying issue wasn’t being properly assessed.

“As a female, when I tell my mechanic that something’s not right, even when I can’t identify what the problem is, there’s something wrong,” Wendy said. “It’s getting better, but there’s still a stigma that drivers don’t know anything about mechanical issues, but for female drivers it’s even worse.”

Wendy speaks of the stigmatization of female incompetence in trucking as a hidden-in-plain-sight issue. In her opinion, a lot of people assume a woman in the cab is not the commodore, but perhaps the wife of the actual driver. What’s worse, she once overheard fellow truckers over the CB radio regard her performance disparagingly because she’s a woman.

“I once delivered a load of road deicer to a Department of Transportation work site. I walked in with my paperwork and handed it to the guy, who proclaimed, ‘I don’t want to talk to you. I want to talk to the driver,’” Wendy said. “I told him that I was his driver, to which he said, ‘You’re not going to be able to get it where I need you to put it.’

“I told him that ‘my boss wouldn’t send you a driver that couldn’t get the job done, so I’m fairly confident that I can do the job for you,’” Wendy said, explaining that the worker later apologized rather flusteredly. “There’s still a stigma out there. If you’re a female driver, well then you must be ‘this type of person’ or ‘that type of person.’ You would think in this day and age that it would go away, but it doesn’t.”

As a woman, Wendy has learned to roll with the punches and knows that not everyone in the industry harbors such prejudiced views. In fact, despite her handful of negative experiences, she insists that the trucking community is becoming a more accepting place.

“I can’t change anybody’s idea or mind about who I am and what I’m doing. I just do my job,” Wendy said.

Wendy doesn’t exactly embrace her identity as a “female truck driver,” nor is she certain that other female drivers share the same mindset. She attributes differences in day-to-day work as a main factor, explaining that the women she does come across typically run teams or are leased onto smaller companies in a more localized area.

“I think over the years, more than anything, I realized that the title of ‘truck driver’ doesn’t define you,” Wendy said. “Whether it’s me personally or anybody else, we all have our own distinct quirks, needs and whatever else. We’re just more visible [as women] because we’re all lumped together in a group.”

She continued, “Think about your friend circle; it doesn’t consist of a bunch of people that are exactly alike. Instead, they’re a bunch of people that have similar interest points, right? Unfortunately, truckers’ interest points revolve around the paycheck. But everybody has different interests after that.”

Wendy prefers traveling long distances. She states that the workload fits well with her home life.

“For me, the more control I can have over my situation, the better I am,” Wendy said. “I need to drive my 11 hours every day and be tired when it’s bedtime so that the rest of my life functions well. However, other people want to just work eight hours on and 12 hours off. There’s such a huge disparity between what people need and want and what they get.”

Wendy’s advice to motor carriers, and to the industry as a whole, is to take into consideration the personal lives of each driver, investing in ways to make their lives off the road easier.

It’s through conversations with unique individuals that new perspectives are learned. Conversely, camaraderie also can be established through similarities in upbringing and viewpoints, discovering that many of our daily challenges, in fact, transcend gender.

“Whether they’re male or female, listen to your drivers,” Wendy said. “People are going to tell you what they want and need, whether they’re able to define it in a way that translates easily to your organization or not.”

The benefits most important to Wendy have been employer-matched 401(k) contributions, adequate health care options and child care benefits.

“When I joined the tanker company earlier in my career, I was looking for a good income because I was paying child support, daycare and everything else that goes into taking care of five kids, so I really appreciated the income level that the company provided me and the work ethic that it helped me form,” Wendy said.

As an owner-operator, Wendy operates mainly within her home state of Washington as well as Oregon and Idaho, but has ventured as far as Oklahoma, Missouri and Ohio. With her children learning remotely from home, she does truck beyond the Pacific Northwest every now and then.

When asked if her children would like to follow in their mother’s footsteps, Wendy suggests that she’ll probably remain the lone trucker in the family.

“I think I’m just a mom who got diesel on her boots and decided at some point she needed to become an owner-operator,” Wendy said.

The post The perspective of a female owner-operator appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

It takes a great deal of confidence and a little bit of know-how to become an owner-operator. Ditching the fleet life for a sweet life on your own can be liberating for drivers possessing an autonomous mindset. But traversing the freight landscape solo has its own set of challenges, too.

In fact, being at the helm of your own operation can also be overwhelming for those not quite sure where to start, especially when it comes to insurance.

Jordan Chastain, Reliance Partners’ senior vice president of sales, details the insurance basics that all drivers should know before heading out on their own.

Weigh your truck options

First and foremost, you’ll need a trusty steed. As an owner-operator, you’re responsible for purchasing your own vehicle, which means you’re also on the hook for its maintenance costs, so it’s wise to choose a truck that best fits your needs.

There’s no right or wrong answer as to which big rig to choose. Rather, it’s more a pros-and-cons decision. Take a new truck, for instance. Sure, it’ll have the latest safety features and tech upgrades, in addition to great fuel efficiency and a low breakdown propensity (for now), but keep in mind that the vehicle’s price tag typically reflects on the insurance, too.

Chastain explains that the cost of a newer truck typically means higher premiums. “Most of the time, the newer the truck, the more premium that you’re going to pay. However, you’d definitely get more miles out of a newer truck and with all the technology upgrades and safety features. You can also make the case that older trucks require a lot more maintenance.”

You’ll need the basics

First, it’s important to ask yourself if you’re going to operate alone or perhaps one day start a fleet.

Reliance Partners recommends that those wanting to drive independently look for sole proprietorship when starting the business, as it’ll give them full responsibility over their operation. If you plan on employing other drivers, then you should consider setting up as a corporation or a limited liability company instead.

“New venture insurance is going to be the same insurance as that of most motor carriers — $1 million on your auto liability; that’s really where the majority of your premium is going to come from,” Chastain said. “A standard new venture policy, depending on the state that you’re operating in, will probably be around a minimum of $15,000 to $20,000 maximum per truck for your auto liability. It really depends on your driving record, the state that you’re located in, the age of your equipment and what you’re going to be hauling.”

Owner-operators with their own authority will need auto liability insurance — $750,000 at minimum as required by federal law. It’s common for freight brokers and shippers to require $1 million in coverage, but Reliance Partners states that most insurance providers recommend buying at least $5 million of liability coverage, as anything less may not sufficiently cover the financial consequences of a major accident.

Lenders also require that you purchase physical damage coverage, which is based on the value of your vehicle. The premium is typically no more than 5% of the total insured value of the truck if your driving record is good; otherwise it might be higher. Chastain notes that if your vehicle is worth $100,000, then the premium would be $5,000.

It’s important to also consider general liability insurance in addition to cargo insurance, which is mandatory for all commercial trucks transporting paid cargo. Drivers are required to carry at least $5,000 of cargo insurance, but the amount could be greater depending on the value of your payload.

Gap insurance is also available for expensive vehicles. In a situation where the value of the truck has significantly depreciated at the time of the costly collision, this coverage helps pay the remainder of your loan.

Owner-operators under permanent lease

Owner-operators leased to a motor carrier are usually covered by the company’s auto liability and cargo insurance, but only under dispatch. You’ll have to be cautious when driving on your own time. Simply driving to the truck wash or on your way home can be a risky endeavor without proper coverage.

This is where non-trucking liability insurance comes in handy. This coverage pays for property damage or bodily injury in the event of an accident when the truck or driver is not under dispatch and on personal time. Motor carriers may also require you to purchase occupational accident coverage (OCC/ACC) before leasing on, which may provide coverage for accidental death and dismemberment, medical expenses, and disability in addition to other types of available coverages.

“Depending on their CSA scores and claims, etc., a motor carrier’s liability is normally around a minimum of $6,000 and $20,000 maximum per truck,” Chastain said. “Non-trucking liability is probably going to run you $500 to $600 for the year, so you’re gonna see a big difference in the premiums there.”

Don’t be dismayed by higher rates

New owner-operators will have to earn the trust of their insurance provider. This means that your insurance rates will be higher, so don’t be caught off guard when signing the papers.

Chastain said that new owner-operators are often surprised when the price is around $18,000-20,000 for the year with a $3,000 down payment, paying $1,400 a month. “They’re not expecting it to be that expensive because they’re used to paying $700 monthly for non-trucking liability and physical damage; now you’re paying a grand or more a month.”

“The thing about starting with a fresh slate is that it doesn’t show that you have any experience,” Chastain said, explaining that insurance companies would like to get to know you first before handing you lower rates. “They don’t want to take a risk on a driver that may have a terrible first year with claims.”

The more experience the better

Ultimately, becoming an owner-operator isn’t for everyone. Are you prepared to take on the responsibilities of your entire operation — everything from booking loads to insurance expenses on top of hauling the freight? If that sounds like a daunting task, then you might not be ready to go off on your own just yet.

Chastain argues that successful owner-operators are the ones who have notched many years under their belts driving for or leased on with larger fleets. It’s in these roles where optimistic drivers learn the invaluable skills needed to do the job themselves. In addition, he states that insurance carriers are a little more comfortable with drivers with an extensive, clean background in trucking.

“Drivers with more experience leased onto a motor carrier have a lot more success than those that spend the minimum time possible with a trucking company before starting off on their own,” Chastain said. “They usually don’t understand the X’s and O’s as well as someone that’s had a little more experience.”

The post Insurance basics: Becoming an owner-operator appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

Jan. 5 — the deadline for conducting annual Drug and Alcohol Clearinghouse queries on all existing drivers — has come and gone. Did you get the forms in on time?

The Drug & Alcohol Clearinghouse requires motor carriers to keep tabs on drivers, involving a bit of paperwork and inquiry on behalf of fleet managers. Conducting Clearinghouse annuals can be time consuming and arduous, taking time away from your operation. However, the process can be a lot easier than you think.

Reliance Partners Vice President of Risk Services John Seidl wants to make it clear that you don’t have to bend over backward when conducting annuals.

Seidl explained that many third-party vendors advise motor carriers to carry out their annual queries in a similar fashion to full preemployments, by which managers request driver consent forms from the Clearinghouse website then have drivers log in to give their signatures — a very cumbersome process that must be done every year.

This is unnecessary and can thankfully be circumvented.

Managers can avoid pestering drivers for their signatures altogether by simply using limited queries for their annuals. Using this format, motor carriers can batch the signatures of their fleet and submit them all at the same time. Seidl noted that the process can be done entirely on an Excel spreadsheet.

Seidl recently helped a fleet manager struggling to get a 70-driver fleet to sign the forms. His response: “Stop that, cancel those full queries, eliminate all the requests for consent and have them instead sign the [limited query consent] document.”

“What’s easier — getting 70 drivers to sign a piece of paper and submit an Excel spreadsheet or to have them all log in to the Clearinghouse website, register … and sign a form? Clearly the limited query is much easier,” Seidl said.

Keep in mind that full queries, with the exception of the preemployment process, are only required when a record is returned on a limited query, prohibiting a driver from operating.

Seidl detailed queries in a previous FreightWaves article: Don’t get wrapped up in drug test confusion.

To clarify, limited queries are used to search for the presence of driver information in the Clearinghouse and must be carried out annually. Companies need only a general driver consent to conduct limited queries. However, the limited consent request must specify the time frame for which the driver is providing consent. If a record is returned, a carrier must then conduct a full query within a 24-hour period for more information.

Full queries provide detailed information regarding any drug and alcohol violations. Employers must obtain the driver’s electronic consent in the Clearinghouse before accessing any such files. Full queries must also be conducted during the preemployment process before a driver can get behind the wheel.

FMCSA states that employees should be queried at least once within a 365-day period based on their hire date, or another 12-month period by the employer, as long as the requirements of 49 CFR 382.701, Subpart G are met. In addition, all drivers should have been queried by Jan. 5, 2021, and then each year thereafter based on a 365-day calendar.

So when is the best time to file preemployment and annual queries?

For annual limited queries, Seidl recommends managers file them all at the same time to make things easier. For instance, he explained that if you had submitted them all on Dec. 5, 2020, then you’d repeat the process again with all current drives on Dec. 4, 2021, then Dec. 3, 2022, and so on.

“I would pick a month and day to do annual queries on all my current drivers and file preemployment queries as I hire new drivers throughout the next 11 and a half months. Then, I’d continue the annual queries process with everybody again,” Seidl said. “If you follow that process, you will never miss anyone.”

Better yet, Seidl recommends motor carriers have all new drivers sign a limited query consent form during orientation. These forms are written with flexibility in mind, allowing employers to set the duration of consent. In turn, a single signature is all that’s needed to conduct limited annual queries for the entire length of a driver’s tenure with the company.

“Have drivers sign that consent form when you’re hiring them,” Seidl said. “Even though it isn’t necessarily going to be used as you’re conducting the [preemployment] full query, … when your annuals come along, the form is already filled out and signed.”

For instance, if a company hires a driver in October but does its annuals in December, Seidl noted that it’s fine to register the driver’s consent form two months later so long as the manager remembers to do so.

For the most part, Seidl doesn’t fault motor carriers for being confused. He notes that even the FMCSA struggled early on to convey its requirements and blamed its website for not pointing users in the right direction. Seidl also points to many third-party administrators for contributing to the mess as their advice to file full queries for annuals is likely financially motivated.

In addition, the Clearinghouse didn’t get off to a good start last January as a surge in registration and query requests crashed the website and connection problems prevented commercial driver’s licenses (CDLs) from being validated.

When browsing the Drug & Alcohol Clearinghouse website, Seidl recommends visiting the Learning Center page, on the dropdown menu under the “Learn” icon at the top right of the homepage. He also suggests reading the frequently asked questions (FAQs), also located in the “Learn” dropdown menu.

A sample limited consent form can be attained through the FAQ page. First type “consent form” into the search bar. Next, click on the question labeled, “Does the Federal Motor Carrier Safety Administration (FMCSA) provide a sample of a limited consent request?” The following information will provide you a link to the form.

FMCSA also provides a series of bulk upload documents and Excel spreadsheets. To access these files, type “batch” into the FAQ search bar. Next, click on the question titled, “Can I initiate queries for a large number of drivers without having to enter them into the system one at a time?” The provided hyperlink will supply you with the downloadable documents.

“If a company does their annuals, they just need the driver to sign that limited consent form and then upload a limited query with that Excel batch sheet,” Seidl said.

Sample downloadable Excel spreadsheet for bulk upload of driver queries. Source: Drug & Alcohol Clearinghouse

Reach out to Reliance Partners’ John Seidl to learn more about Drug & Alcohol Clearinghouse fleet compliance.

The post Annual Clearinghouse queries are easier than you think appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

When buying insurance, it can sometimes seem as though premiums change on a whim.

But the truth about changing rates comes from a fluctuating insurance market that is cyclical in nature.

In a soft market, business owners can take advantage of broader terms of coverage, increased capacity, higher available limits and competition among insurance carriers for new business. But in a hard market, buyers are faced with increased premiums, diminished underwriting appetite, restricted coverage, and less competition.

While many business leaders have enjoyed the benefits of a soft market for years, several factors are causing commercial truck insurance rates to rise. Among them are catastrophic losses (such as floods, hurricanes, and wildfires) and higher than normal claim costs due to nuclear verdicts. In turn, underwriters that are struggling to overcome losses tend to exercise caution.

All in all, insurance buyers are facing difficult decisions regarding their insurance coverage. Here are 6 steps you can take to stay ahead of rising insurance rates:

Related Post: The Next Generation of Cargo Insurance: Real-Time and On-Demand.

1) Understand your insurance program.

You don’t need to be an expert on your coverage—that’s the role of your insurance broker—but you should always check to ensure your policies account for your business’s greatest exposures. A firm understanding of your coverage also ensures you’re not overlooking any exclusions. This knowledge will help you secure the right policy for your business. Ask your agent or account manager to review your policy with you and get the guidance you need on making adjustments as needed, especially during a hardening market.

2) Refine your risk management efforts.

Where possible, take the time to double down on your record management and loss control data. Doing so will make your business more attractive to insurers. Motor carriers without a safety manager or documented safety procedures can have a tough time securing favorable quotes. But your broker should be able to help you review existing policies and procedures. Ask your agent to make suggestions on how to get the information underwriters will need in order to get you the rates you deserve.

3) Know your loss history.

In a hard market, underwriters will be especially critical when reviewing loss trends. As a follow on from step 2, be prepared to explain the factors contributing to a specific loss. You’ll also need to clearly explain the steps you’ve taken to mitigate future losses.

Related Post: Do I Need Trailer Interchange or Non-Owned Trailer Coverage?

4) Budget wisely and plan ahead.

In some cases, premium increases are unavoidable. Even in a soft market, business leaders ought to take insurance costs into account alongside their other normal expenses. Best practice dictates that the more time you allocate for the quoting and the renewal process, the more options you’ll have. Your agent will also have a better chance at pricing the right solution and fine-tuning your policy if you’re being proactive.

How do you know whether you’re planning well enough ahead? That’s based on your fleet size. As a rule of thumb, you should be reaching out to your agent at the following times:

• 1-9 trucks or power units: 45 days from your policy’s expiration date.
• 10-50 trucks or power units: 90 days from your policy’s expiration date.
• 50+ trucks or power units: 120 days from your policy’s expiration date.

5) Work with the right insurance agency.

Motor carriers too often shop for insurance quotes like they shop for fuel. But changing agents and insurance companies each time you get a cheaper quote elsewhere are big red flags for underwriters. The reason? Insurance companies don’t want to insure instability—they’re always more willing to insure businesses that can demonstrate stability. That’s why it’s vital to have a trusted insurance professional advising your business. Partnering with a broker that has strong carrier relationships and undisputed knowledge of your industry can mean the difference between a hard stop to your operations and sustainable business growth.

6) Communicate early and often.

In order to understand how a hard market might affect your business, it’s imperative to keep the communication channels between you and your agent open. Starting the renewal process early can also give your agency more time to secure the best coverage for your business.

Business owners who proactively address risk, control losses and manage exposures will be better prepared in and out of a hardening market than those who do not. Work with your broker now to prepare your business for changes down the road.

The post The 6 Steps to Staying Ahead of Rising Commercial Truck Insurance Rates appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

Thinking about starting your own trucking authority? Before you choose a company name or register with the DOT, here are answers to some of the most common questions about new venture trucking insurance!

1) Do I Really Need a $1M Liability Policy?

The short answer—yes. While the limits of auto-liability required by the FMCSA (Federal Motor Carrier Safety Administration) start at $750,000 (required limits start at $1,000,000 for registered hazmat-haulers), nearly all shippers and freight brokerages require $1,000,000 of auto-liability insurance—and at least $100,000 of motor truck cargo insurance—to even be considered when booking a load.

This $250,000 buffer protects both the freight broker and the shipper in the event of a loss. The increase to liability limits also shields you from overflow when accidents involve fatalities. $1M is the average cost for losses involving fatalities, here, but this figure can climb closer to $3M when you start to account for property damages, funeral costs, pain and suffering compensation, attorney fees, and more.

Even if the accident isn’t a fatal one, covering your bases with the right amount of liability insurance can protect your business’ reputation and your livelihood. Having anything less can end up costing you more in the long run.

2) What Other Coverages Do I Need?

Motor Truck Cargo
Often referred to as MTC, or simply as Cargo insurance, this line of coverage protects the goods you or your company are hauling. For example: in the event of an accident involving you and your load of building materials, refrigerated seafood, or any other cargo, MTC insurance would protect the cost of replacing those goods or paying out to the customer.

Most companies combine $1,000,000 of auto liability insurance, along with $100,000 of cargo insurance to cover what most in the industry refer to as, the basic necessities of trucking insurance. Having both auto liability and MTC make you eligible to haul for hire.

Comprehensive and Collision Coverage
Otherwise known as physical damage coverage or Phys Dam, this line of coverage will cover your truck and/or trailer for the appraised value at the time of the claim, in the event of damages incurred in an accident or while parked on a lot. The value of your truck is set by you, the insured, and represents a smaller percentage of the insurance premium for the year. Compared to auto liability, this coverage only makes up a small percentage of your total premium.

Related Post: The Next Generation of Cargo Insurance: Real-Time and On-Demand

3) How Much Can I Expect To Pay?

Insurance costs vary from state to state. Premiums also fluctuate heavily by a number of factors like driver experience, age & type of vehicle, your radius of operations, commodities hauled, motor vehicle reports for you and other drivers, safety scores and several other factors. Regardless, the average costs to appropriately insure your business from damage to others (in the form of auto liability insurance), damage to cargo (in the form of motor truck cargo insurance), and damage to your own equipment (in the form of physical damage insurance) can range between $8,000 – $25,000 per year.

This cost may surprise you. But even if you’ve been running under someone else’s authority, have years of experience under your belt, and millions of miles logged, new trucking companies still fall under the category of “high-risk” due to the lack of history tied to a particular DOT authority. If you’ve been running under someone else’s authority, you may be accustomed to paying $1,000 – $5,000 a year for insurance.

Related Post: Do I Need Trailer Interchange or Non-Owned Trailer Coverage?

Remember, the insurance you need to purchase prevents you and your new business from entering into a financial nightmare. Your insurance also protects your way of life. So, after you’ve made the decision to start your own trucking business, purchase (or lease) your new truck or tractor, apply for your DOT number and/or Motor Carrier authority, contact a licensed insurance broker. The right agency will shop the markets on your behalf and work to get you the insurance product you need to be successful on the road and beyond.

The post The 3 Most Common Questions About New Venture Trucking Insurance appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.

Company sponsored CDL training programs might sound so good from the start. However, it is important that you be careful when you start looking at these offers. One of the first things to do after finding a potential trainer is reading their terms and condition before signing an agreement. In most cases, the sponsored CDL course you receive is not free. You will have to pay the trucking company before you start working for them or through salary deductions or commit yourself to work for them for a specific period of time which is mostly one year.

Benefit of taking this program
Choosing to obtain your commercial driving license from a trucking is beneficial especially if you are opting to work in this industry. This is because, most job offers require driver to at least have a driving experience of not less than two years in a similar position. For starters, working for a company that will give you a job and pay for your training can be a great idea.

What to check
Since it is important that you find quality training and not just a license, you need to check a number of factors about that firm. These should include the reputation of that company and how long they have been in the industry. You also need to know how that firm relates with its employees especially those who have undergone a similar training program. It is also necessary to know which type of CDL training schools the company is associated with. You also need to ask the company if they offer any type of credit offers especially if you have little credit.

Things to expect
Once you enroll to this program with a reputable trucking company, you should expect to start your truck road career after graduating. After finishing your orientation, you will spend a period of 4 to 6 months with a quality driver trainer. During this time, the trainer will teach you how to perfect your truck driving skills and how to make the career profitable. During training, you should expect being out on the road at least twice a week before becoming a lease operator. Most trucking companies will expect you to work for them as a driving associate after successfully graduating from your program. This is necessitated by the high cost of training drivers.

Requirements to enroll
Companies have different requirements for a person to enroll in their programs. The bottom line is that these firms will enroll an individual who qualifies to be their employee. Trainees need to have the professionalism, skill, experience and dedication in order to be absorbed by the particular company. However, these requirements differ depending on the company’s scope and reputation. A number of companies also reimburse their graduates after starting training with them or after successfully graduating from their institution.

Trucking jobs are increasing in demand and hence the need of these drivers. If you wish to build a career in this industry, make sure you find the right trucking companies that train drivers. However, since there many of such companies out there, it is prudent to scrutinize their deal before signing the agreement.

The post Trucking Companies That Train Drivers appeared first on Commercial Transportation & Trucking Insurance - Reliance Partners.