Posted December 27, 2016 by Administrator
Insurance rates rose substantially for trucking companies in 2016. And while trucking companies as well as independent-operators have felt the sting of rising costs, the consumer will soon feel the pain of increasing transportation prices that show up in higher costs for consumables.
There are several factors that have had an impact on the rising insurance rates in America.
- Insurance premiums have increased 10% – 30% as a result of very high legal settlements.
- Major companies (like Zurich Insurance Group AG and American International Group Inc.) have eliminated for-hire policies, making it harder for trucking companies to secure adequate coverage.
- New food handling transportation requirements instituted by the Food and Drug Administration (FDA) have increased liability for trucking companies.
- Lesser settlements – in the $25,000 – $75,000 range – are also having an impact. Even though they are lesser amounts they are often not litigated because the cost of litigation does not make it worth taking them to court, even though many times the trucking company was not at fault.
- Frivolous suits are another frustrating factor because they consume resources and needlessly inflate insurance rates.
The negative risk exposure for trucking companies has translated into a renewed emphasis on safety. Safety is no longer just for safety’s sake (although it is extremely important in its own right.) Safety today has a major impact on the bottom line for the company and therefore is a business imperative. Not only are insurance premiums impacted, but safety mitigates risk which is now a significant financial factor for the trucking industry.
Insurance firms today are clear – they want to see motor carriers cultivating a culture of safety. Safety must become a core value of the company, not just a priority. A core value indicates permanency; safety has to be non-negotiable. No matter what conditions are placed on the freight load, it must be safely transported from start to finish no matter what.
Trucking company leaders need to back up the core value of safety with financial supports. For example, one safety feature that companies are installing are in-cab video systems that can provide video proof of driver actions in the case of an accident. That type of information can help drivers improve their safety practices. In-cab video – and other safety technological tools – cost money but are a good investment on the part of the company leadership.
Truck drivers themselves need to be empowered to make safety judgment calls without fear of recrimination. They are on the front lines and need to know they can challenge issues when they see them. Focusing on safety as fundamental to the trucking company or driver will help to mitigate insurance premium increases and will, ultimately, benefit everyone.
Cline Wood is a national commercial property and casualty insurance agency that serves the commercial agribusiness and trucking industries. To learn more about Cline Wood and how we can help your business mitigate your insurance risk, contact us.
Posted December 23, 2016 by Erin
The Christmas and New Year holiday weekends are fast approaching. While we spend time with friends and family, cargo thieves could very well be looking to target terminals and in-transit shipments. To prepare for the long holiday weekends, we urge our members to review their security procedures and protocols. Below is a list of suggestions to help maintain the integrity of
– Check and test security alarms and surveillance systems to
ensure proper working order.
– Ensure batteries are fresh in exit doors and back up cellular
(used to maintain alarm reporting)
– Perform perimeter checks, inspect fencing or other physical
barriers to ensure they are properly secured
– Check perimeter lighting to ensure lighting is functional and
inspect timers to see that lights active at darkness
– Ensure company alarm call list is current with valid contact
information. Require responsible party to respond to all alarm
calls, even if system is suspected of malfunctioning
– Contact law enforcement and request extra patrols in the area
– Remove keys from all warehouse equipment and place in a secure
– Use a non-integrated cellular verified alarm system as a back
up to prevent burglars in the event they defeat the main system.
– If you have to leave your rig or loaded trailer unattended, look
for a true secure lot or authorized location to leave vehicles.
– If forced to leave vehicles at a public facility (truck stop, etc)
pick one which is well lit and utilizes surveillance equipment.
Park within camera view if possible.
– Secure the tractor with a steering wheel lock or kill switch. On
the trailer use a king pin lock and glad hand locks while using
industrial strength padlocks on the trailer doors.
– Do not leave keys inside the tractor!
– Check on the unattended vehicles as frequently as possible.
– Notify dispatch of where and when you have dropped the load
provide an estimated time of return.
– Use covert tracking devices embedded in the freight with geo-
fencing and alert notification capabilities.
SWTSC Best Practices
Southwest Transportation Security Council
5501 LBJ Freeway, Suite 800
Dallas, Texas 75240
Posted December 23, 2016 by Erin
FDA Issues Final Rule on Sanitary Transportation of Human and Animal Food
What You Need to Know
On April 6, 2016, the FDA published its Final Rule on Sanitary Transportation of Human and Animal Food establishing transportation requirements to ensure the safety of both human and animal food. This rule results from long-time concerns over the need for regulations so that foods are being transported in a safe manner. It reaffirms that transportation plays a critical role in preventing risks to the nation’s food supply.
The final rule is part of the implementation of the 2005 Sanitary Food Transportation Act (SFTA) and the 2011 FDA Food Safety Modernization Act (FSMA). These two statutes require the FDA to issue regulations requiring shippers, carriers by motor vehicles or rail vehicle, receivers, and other persons engaged in the transportation of food to use sanitary transportation practices to ensure that food is not transported under conditions that may render the food adulterated. The rule is one of seven fundamental rules proposed since January 2013 and is the sixth of seven regulations that have been finalized. This is also the only rule of the seven that is directly applicable to transportation.
The rule applies to shippers, loaders and carriers who transport food in the U.S. by motor vehicle or rail (whether or not food is offered or enters interstate commerce), and applies to food not completely enclosed by a container. Four key requirements are addressed: (1) vehicles and transportation equipment, (2) transportation operations, (3) records and (4) training. The new rule applies to the design and maintenance of vehicles and transportation equipment to ensure they do not cause the food being transported to become unsafe. It also requires specific measures be taken during the transport of food to ensure food safety, such as adequate temperatures. The rule requires carriers to train their personnel in sanitary transportation practices and to document the training conducted. Regulated parties must also maintain records of written procedures, agreements and training records (required for carriers).
So how will the rule on Sanitary Transportation of Human and Animal Food affect the transportation industry? First and foremost, the rule is flexible. It allows the industry to continue to use industry “best practices” which is defined as “commercial or professional procedures that are accepted or prescribed as being correct or most effective.” These practices include successful sanitation procedures, effective training programs, records retention procedures, successful inspection and monitoring programs.
The final rule indicates that businesses (other than small businesses) will have one year from date of publication to comply, so until April 7, 2017. Small businesses have 2 years to comply. “Small businesses” are defined as businesses other than motor carriers that are also not shippers and/or receivers and that employ fewer than 500 persons, and motor carriers having less than $27.5 million in annual receipts.
Before the rule becomes enforced in April 2017, those involved in the food transportation industry should review their vehicle and transportation equipment to determine how the new requirements may affect them. To comply with this new rule, all companies need to develop and implement a written procedure governing all aspects of their shipping operations. The procedure should spell out in detail the sanitation procedures for both loading and unloading and shipping equipment. If the current “best practices” are not suitable, then changes to the procedure must take place.
Failure to comply with the rule is subject to injunction and criminal prosecution. Further, food will be deemed “adulterated” if it is transported or offered for transport by a shipper, loader, carrier or receiver under conditions that don’t comply with the rule. FDA also intends to conduct some inspections and the Department of Transportation (DOT) will establish procedures for transportation safety inspections to be conducted by DOT or state agencies.
These new requirements may be used by plaintiffs to establish negligence and negligence per se, and may appear in litigation through discovery or FOIA requests. On the other hand, proper compliance with the rule will allow companies to prove safe and proper practices.
For more information on the Sanitary Transportation of Human and Animal Food visit: https://www.federalregister.gov/documents/2016/04/06/2016-07330/sanitary-transportation-of-human-and-animal-food
Article originally published by Roberts Perryman.
Anna Beck is an associate attorney at Roberts Perryman. Anna’s practice focuses on transportation, insurance coverage and defense.
Roberts Perryman has been a leader in transportation defense for over 50 years with offices in St. Louis and Springfield, MO and Belleville, IL. www.robertsperryman.com
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Posted December 20, 2016 by Administrator
It was during the Great Depression and Malcolm McLean, the son of a North Carolina farmer, started a trucking company to help his family survive those harrowing times. It was on one of those long hauls that he had a new idea that would someday revolutionize the shipping industry. It was the dawn the day before Thanksgiving and McLean was exhausted from driving all night. As he wearily drove up to the loading docks to deliver his produce, he realized there were at least 20 trucks already waiting ahead of him. Frustrated, tired and worried he wouldn’t make it home in time for Thanksgiving dinner the next day, he wondered if there wasn’t an easier way to unload freight.
In those days freight was unloaded piece by piece by the longshoremen. Each shipping item was first unloaded and then restocked on the ship. It would easily take a week to load a ship. McLean wondered if there was a way for his entire truck bed to be unloaded and reloaded at once.
His idea was not well received. Everyone thought the best way to improve shipping efficiency was to increase the load size by packing the freight better and by improving the speed time of the boat. No one thought his idea would make enough of a difference to be considered.
It took McLean many years to have the opportunity to try out his innovative idea. He grew his company to a large trucking fleet of over 1700 trucks by the early 1950’s. He then decided to sell his company, which sold for $12 million. He had to sell his trucking company before he could buy a shipping line, as per U.S. regulations at the time. Once he sold his trucking company, he then raised the capital to buy the shipping company and what he needed to develop his innovation.
Once he owned the shipping company he went about designing the truck bed containers, including a necessary but newly invented locking system. He then purchased two WWII tankers that he remodeled to fit the truck containers. He even designed a new crane that could easily unload the truck and stack the shipping freighters.
His inventions were well worth the wait. His new trucking container loading system reduced the cost of loading 39 times from $5.86 per ton to only $.16 per ton. Even more impressive, what had once taken a week to load now only took 8 hours. McLean had forever changed the way goods were shipped, loaded and unloaded all because of a delay at the dock way back when he was driving a truck just to keep food on the table and help his farmer neighbors.
The big takeaway here is the importance of looking at problems with a fresh eye and different perspective than may be the current norm. Sometimes it takes someone who is an outsider to see what may appear to be obvious but is overlooked by an insider in the industry.
Cline Wood is a national commercial property and casualty insurance agency that focuses on the commercial agribusiness and trucking industries. To learn more about Cline Wood and how we can help your business, contact us here.
Posted December 13, 2016 by Administrator
Technological advances are helping farmers increase resiliency, scale and sustainability. Technology is one of the most effective tools in our society for reducing poverty because more than a third of the global population relies on agriculture for a living. New digital applications are now making it easier for farmers to improve their productivity and are helping them scale their businesses at a much faster rate than in the past as it pertains to these three key constraints: 1) resilience, 2) scale, and 3) market incentives.
Traditionally, small farms without a safety net would suffer debilitating setbacks from bad weather, crop disease and low prices. Today, farmers can access mobile apps that help take the guess work out of planting, growing and harvesting crops by providing real-time weather information and agronomic tips. Emergent market insurance players are using mobile technology to bring life and crop insurance that protect small farmers from economic shocks.
Innovative products generate mobile payments and receipts whenever farmers sell to agribusiness using their platform. This provides them with a dashboard that gives them touch point financial history right from their phone. Better tracking and reports make them more attractive to a bank when they apply for credit, insurance and other financial tools that can help them withstand potential setbacks and prevents them from being taken advantage of by buyers. Market prices are easily accessible by phone which helps them make better decisions and maximize their profits by selling at precisely the right time.
In order to be successful, farmers need sizeable, stable markets. Mobile platforms are making it easier for farmers to manage their contracts, make and accept payments, and give them clarity about their business strategy by helping them identify patterns, efficiencies and best practices. Mobile supply chain management now makes working together vastly easier for buyers and small operators.
Digital technology makes this exciting times for agribusiness. Mobile innovations are changing the way dairies tend their cows, access micro-insurance to prevent bad weather risk, or determine the most scientifically optimal time to plant crops.
The demand for food in the global economy is expected to soar 70 percent by 2050. Digital technology may very well be the answer that will help to solve some of the most difficult agricultural challenges of our time. To learn more about protecting and growing your agribusiness, contact us today.
Posted December 6, 2016 by Administrator
The trucking industry in America may be facing a downturn, causing some analysts to predict that economic indicators are signaling a recession. Some of the negative trends that analysts point to as worrisome include:
- low diesel prices
- energy sector issues
- high business inventories
- weakness in the manufacturing sector
- decrease in exports due to a strong dollar
- driver shortages that make it difficult to cover deliveries and routes
- government regulations that make it difficult to recruit and retain drivers
The trucking industry is a major player when it comes to economic expansion. When fewer goods are delivered due to a reduced need, it could signal a slowing of economic growth in the U.S. The trucking industry accounts for 70 percent of the tonnage carried by domestic freight. Trucks move 9.2 million tons of freight annually. Over 37 billion gallons of diesel fuel were required to provide that much transportation.
Even if manufacturing improves and consumer demand stabilizes, there is a high degree of economic uncertainty predicted for 2017. High inventory stocks continue to hold down trucking freight volumes, which have been falling since the second half of 2015. Hopefully, the supply chain will clean out the excess stocks which will benefit the trucking industry.