Commercial Truck Insurance Trends 2023
It’s no secret that inflation had a severe impact on the commercial trucking industry in 2022.
Typical truck and driver shortages were amplified by exploding fuel costs and sweeping consumer prices.
ATRI reported that fuel prices became the number one trucking industry concern, bumping the always consistent driver shortage challenge.
Trucking overhead increased just when spot rates collapsed for the first time in 5 years. DAT reported an average -19.3% van spot rate drop from Dec ’21 to Dec ’22, and a -57.3% drop in spot load posts.
As a result, “Owner-Operators’ 2023 income expectations trend sharply negative” according to OverDrive with 44% predicting 2023 will be Worse than 2022 and 25% Not sure. Only 14% believe it will be a better year.
Meanwhile the Feds continue their tinkering with interest rates in their attempt to tame inflation and consumer spending continues to drop. NTY reported end of December that the Personal Consumption Expenditures index showed prices increased another 5.5% as consumer spending pulled back.
And…threat of recession looms, but enough doom and gloom.
Perhaps 2023 will be the year we see the trucking industry rebalance. Given our collective experience with Covid, we know that trucking for hire has been on a roller coaster for three years now.
Trucking companies that survived saw that preparation was key as we continued to see supply chain delays, exorbitant replacement parts and significant delays in equipment repairs.
They took the time to put a new plan in place and quickly implemented them.
We don’t know what 2023 will bring. We can’t know. But we can all have a plan in place and think about how to address disruptions in the future.
With a ton of tech layoffs occurring now, it is certainly possible that trucking logistics could be next.
Think about how to deal with the expenses and downtime caused by potential future logistics delays or simply a continued reduction in spot load posts.
Take the time to embrace technology that can help mitigate any logistics snafu, and reduce the cost of your truck insurance. Get comfortable using the FMCSA SAFER system to keep track of your company, your equipment, your drivers…and your competitors.
Lowering incident frequency will eventually result in reduced insurance premiums. Superior vehicle functionality optimizes fuel, increases overall efficiency and lowers overhead.
How about the value of your units? Freightwaves reports a ‘Once-in-a-lifetime pricing boom’ in used trucks reversing course, so it’s more important than ever to review your “stated amounts” with your truck insurance agent now. (It’s #5 in Top Quick Tips to Lower Your Trucking Insurance Premium.)
If you’re fortunate to be planning on growing into a small fleet, learn how to tweak your rate BEFORE you grow beyond 9 units.
Take the time in 2023 to prepare a plan, understand what drives your insurance premium, prioritize your logistics and try to predict the unpredictable.
But if you’re still operating after Covid you already know that, and congratulations, it could be an interesting year!
Shelly Benisch, CIC, TRS & Christina Cummings, TRS
Commercial Insurance Solutions, Inc (CIS)