Assessing Risk in the Farming Industry

Posted October 9, 2018 by Administrator

Running a successful farm takes hard work and careful risk management. Farms face several unique risks that don’t affect other industries. However, assessing those risks follows the same process. While the degree of acceptable risk and the approach to handle it will differ from person to person, the framework for identifying risks remains unchanged.

Develop a Risk Heat Chart

A heat chart provides a simple visual tool to identify if a risk is significant enough and likely enough to address. The chart below is a simple illustration comparing the potential effect of a risk on the left and the likelihood of the risk occurring on the bottom. The darker the color, the more damage the risk can cause to the business.

To make a usable risk heat chart, farmers need to perform the following:

  1. Pinpoint things that can go wrong. This includes external and internal risks. This step is critical because many farmers overlook risks they think are unlikely, which can come back to haunt them later. Some external risks include fluctuating markets, law and regulations governing farming, and weather events. Internal risks can be a loss of employees due to failing health or quitting, damage to assets such as a barn fire, personal debt, and more.
  2. Estimate the potential effect. Once farmers identify risks that can affect their farm, they need to determine how much it can hurt their operation. Farmers will want to seek input from employees to gain a balanced view of the risks. Using the above heat chart, farmers can assign five categories ranging from negligible to severe for the potential effect the risk can exert on the farm.
  3. Estimate how likely the risk is. Similar to the above step, farmers need to look at their risks and determine how likely they are to happen. From there, they can assign them to one of five categories ranging from remote to probable.

Once farmers know their risks and decide how much they can affect the business and how likely they are to occur, they can plug them into the various slots on the heat chart. For example, if a farmer estimates that a drought it possible this year (category 3 risk) and the potential effect is severe (category 5), this creates a risk score of 15—one of the hottest risks on the heat chart. This tells the farmer he or she needs to develop a risk management strategy to protect their farming operation. All farms have risks they need to address, but they don’t need to do it alone. The experts at Cline Wood can help you identify all risks that could affect your farm as well as implement strategies to mitigate them. Contact us to learn more.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Keeping Truck Brakes Safe Year Round

Posted October 2, 2018 by Administrator

Following the recent Commercial Vehicle Safety Alliance (CVSA) Brake Safety Week, brake maintenance remains a priority. With colder weather rapidly approaching, truck drivers and fleet managers need to ensure truck brakes are operational before hitting the roads in less than optimal conditions.

Brake Safety for Drivers

Truck drivers can take several steps to improve their brake safety. Some suggestions include:

  • Inspect the vehicle to identify safety risks to the driver and other motor vehicles on the road. Pre-trip inspections should last 10-15 minutes and include the truck, trailer, cab, and all equipment.
  • Go over the CSVA’s Brake Inspection Checklist. Drivers should check for damaged or missing components, worn or cracked brake pads, etc.
  • Check tire pressure regularly. When truck drivers use their brakes, it accelerates wear and tear on tire tread. By making sure tires aren’t over or underinflated, drivers can prolong the life of their brakes.
  • Practice defensive driving. Hard braking tears brakes. Sometimes, it may seem impossible to avoid hard braking when other motorists suddenly hit their brakes. However, if truck drivers maintain a good following distance, they can circumvent the situation. Other ways to avoid hard braking are to follow the speed limit, obey traffic signs, and slow down in work zones.

Brake Safety for Fleet Managers

Managing driver safety is a top priority for fleet managers, but this can be hard to do without being in the trucks with the employees. The following are several ways fleet managers can monitor and control brake safety:

  • Utilize telematics data. This information can inform fleet managers if drivers are braking hard, speeding, or other behaviors that affect brakes.
  • Create a culture of safety. Emphasize the importance of pre- and post-trip inspections to identify potential issues with brakes before they become a major problem.
  • Implement preventative maintenance. Consistent maintenance can prolong the life of brakes as well as increase driver safety.

Brake safety is an issue that concerns drivers and fleet managers alike. By making it a company-wide issue, fleets can extend the lifespan on their brakes as well as reduce the risk of a brake-related accident. To learn other ways to reduce risk in your fleet, contact the experts at Cline Wood.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

How to Estimate Corn Yield Using 2 Methods

Posted September 25, 2018 by Administrator

Farmers rely on corn yield estimates to make crop management and grain marketing decisions. However, basic methods of calculating crop yield can produce misleading results. The more simple the calculation, the greater the margin of error is. All methods of estimating corn yield require farmers to count the kernels on an ear of corn.

The simplest of methods relies on estimating how many ears per acre a farm produces. While it may be easier to estimate ears per acre and multiply that by the number of kernels per an average size ear of corn, the results will not be accurate. The following outlines two methods for estimating corn yield starting with the least accurate method.

  1. Simple but inaccurate. As mentioned above, the simplest method is the least accurate. To achieve a rough estimate of corn yield, farmers who anticipate around 26,000 ears per acre can select an average size ear of corn, count its kernels, and multiply it by 0.289 (this multiplier implies an average size kernel). Farmers should skip kernels near the top that are less than half the size of regular kernels. To do this, farmers can count the kernels in one row on the ear of corn and multiply it by the number of total rows. For example, 12 rows with 48 kernels is 576 kernels per ear (12*48 = 576). Multiplying this by 0.289 equates to approximately 166.5 bushels per acre (166.464 to be exact). This math makes several assumptions about the ears per acre as well as the average kernel size. It also excludes outliers such as pests, drought, and other stressors that can affect kernel size or overall yield.
  2. Recalculating for population and seed size. The above example assumes a crop production of around 26,000 ears per acre. However, farmers should reduce this number by 1000-2000 to account for pests and other issues that can affect the final yield number. They should also incorporate a multiplier for kernel size ranging from small to large to take weather conditions into consideration. Poor weather will yield smaller kernels and vice versa. For this particular example, farmers should use the following equations to get a better idea of what to expect:
    1. 25,000 ears per acre in a stressful year: 576*0.227=~131 bushels per acre
    2. 25,000 ears per acre in an average year: 576*0.278=~160 bushels per acre
    3. 25,000 ears per acre in a very productive year: 576*0.357=~205.5 bushels per acre

This results in a possible range of 131-205.5 bushels per acre. While the simple method’s number fell in this range, the final result could be much less or much more depending on outside factors.

If the farmer wishes to be even more conservative, he or she can reduce their expected yield by 2000 and use the following equations:

  1. 24,000 ears per acre in a stressful year: 576*0.218=~125.5 bushels per acre
  2. 24,000 ears per acre in an average year: 576*0.267=~154 bushels per acre
  3. 24,000 ears per acre in a very productive year: 576*0.342=~197 bushels per acre

This equation produces a range of 125.5-197 bushels per acre. Both of these equations result in more than 70 bushels per acre in difference and can have significant implications for a farmer’s bottom line and budget. Farmers need to prepare for all possibilities for their corn yield so as not to endanger their farming operation. To learn more ways to protect your livelihood and your farm, contact the experts at Cline Wood.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Cline Wood expands Risk Management Team with addition of two experienced safety professionals

Posted September 21, 2018 by Erin

CLINE WOOD EXPANDS RISK MANAGEMENT TEAM WITH ADDITION OF TWO EXPERIENCED SAFETY PROFESSIONALS

Cline Wood, a Marsh & McLennan Agency LLC company, has hired two new risk consultants to help its transportation and agribusiness clients build and enhance their safety cultures and design and implement various industry-specific risk management solutions.

Steve Page has spent over 30 years as a leader in transportation and safety management. His previous leadership positions within several realms of the trucking industry included roles focusing on safety and safety programs, compliance, FMCSR rules and regulations, and driver management/coaching. He earned the NATMI Certified Director of Safety designation in 2003 and many other awards and acknowledgments because of his work in transportation safety. Steve will primarily work with employers in the Midwest region.

Kenny Ray has spent over 30 years building a successful career in safety, security and risk management. His experience includes 25 years as a peace officer in Texas and many years with the Texas Department of Public Safety and Texas Rangers in various leadership positions. These combined with his most recent role as a transportation safety director have positioned him well to support Cline Wood clients in Texas and the Southwest.

“We are committed to helping our clients build a safety culture that helps control losses and increase the value of their companies,” said Mike Wood, president of Cline Wood, a Marsh & McLennan Agency LLC company. “Our team is made up of proven professionals who have met the challenges in the industries we represent and they will work with our clients to find solutions to those challenges. We are extremely pleased to have both Steve and Kenny join us, as they embark on a new stage of their careers.”

 

Please contact our Safety & Risk Management team with any questions at safetrucking@clinewood.com.

 

How Will Technology Affect the Future of Freight?

Posted September 18, 2018 by Administrator

For the last half-century, truck drivers and carriers booked their oversize loads through traditional methods such as by phone, fax, or email. However, recent data suggests this is poised to change. While three-quarters of individuals have had positive experiences with traditional brokers, almost as many (73%) would like it if they never had to use one again. What this indicates is the system works, but it doesn’t work as well as drivers and carriers would prefer. Seeing an opening for opportunity, innovators jumped onto the scene.

Understanding the Proliferation of the Online Freight Marketplace

When people began booking their freight online, 77% indicated the experience was superior to traditional brokers. This is unsurprising as booking their trips online netted 61% of them more money. Of those who have not yet tried booking freight online, 81% indicated they would like to try it. When asked why they dislike traditional brokers, carriers gave the following responses:

  • 53% of drivers indicated traditional brokers were missing information or provided wrong information about the freight
  • 50% of drivers reported poor communication with traditional brokers
  • 40% of drivers received their payments late from traditional brokers
  • 29% never received payment at all from traditional brokers
  • 28% received unfair compensation from traditional brokers for their work

When asked what features they liked and required of the online marketplace, carriers indicated the following:

  • 28% of carriers indicated fast pay and no factoring fees was most important
  • 25% specified better information about freight
  • 20% prefer the online marketplace’s pricing transparency

Another benefit of the online marketplace is carriers don’t have to spend as much time locating their next load. They also often receive a higher rate of pay per mile. One of the biggest examples of the online freight marketplace is Uber Freight. Launched over a year ago, Uber Freight helps match carriers to shippers much like the traditional ride service matches riders with drivers. Uber Freight allows drivers and carriers to apply filters for location, drive distance, and more to identify loads that meet their needs.

With the shifting trucking landscape, it can be difficult for trucking companies to keep up with new technology. If your trucking business is struggling to adapt to new industry changes, Cline Wood can help. Contact us to learn more about running your business as effectively as possible.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Farmers Share the Top 3 Challenges Facing Agribusiness

Posted September 11, 2018 by Administrator

Small and medium size agribusinesses now experience significant challenges from the local level all the way up to the global stage. They must stretch to meet the growing demand to feed the global population while adhering to unforgiving emissions regulations. This means trying to grow more food on less land to reduce their ecological footprint. To understand these challenges better, CASE IH conducted a survey at the Ag Connect Expo to find out farmers’ biggest concerns. By learning about farmers’ diverse needs, the agriculture industry is better able to innovate and develop technological solutions. Some of the biggest challenges farmers face include:

  1. Meeting the worldwide need for food. As economies boom and populations proliferate, it is becoming harder for farmers to keep up with production demands.
  2. Managing the dearth of land. With less land available, prices are skyrocketing. Farmers need more land to keep up with global demands for food, but purchasing the property is cost prohibitive.
  3. Mandates and regulations. The government issues new regulations in an effort to improve safety and reduce the effect of farming on the environment. However, this means farmers must be ready to pivot and change business operations without disrupting production or increasing costs.

Other concerns farmers identified included the stability of global markets as well as the advancement and use of bio-based fuels. When asked which of the above concerns will affect their farming operation in the immediate future, government regulations was the top response. Nearly one-third of farmers anticipate that government regulations will affect their business in the next year. Tied for the second top issue, about one-quarter of farmers named the lack of land and resulting price increases as well as the instabilities of the global marketplace as their next biggest concerns.

Despite these challenges, an astounding 89% of farmers expect their operation to expand within the next five years. If you anticipate that your farming operation will grow in the near future, you will need to address the above concerns in order to succeed. Part of business planning is identifying and managing risks that can prevent your farm’s success. Contact the experts at Cline Wood to learn how we can help you reduce risk on your farm.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

How to Solve the E-Commerce/Urban Delivery Problem

Posted September 3, 2018 by Administrator

In 2017, e-commerce sales reached $453.5 billion in revenue, and experts don’t anticipate this trend will slow down anytime soon. With a projected growth of 20% over the next two years, there is no doubt that the e-commerce industry is booming. However, this creates several complications for delivery drivers.

Top Issues Affecting Drivers in Urban Areas

Most delivery problems occur in the final 50 feet of the delivery. In urban areas, parking is already an issue, and truck drivers are struggling to find the curb space to unload their deliveries. It’s no secret that major cities have more traffic, but the rise of ride services like Uber and Lyft further complicate the already limited number of curbs. To put it in perspective, Lyft gave rides to more than 23 million people in 2017; Uber came in at four billion rides. That’s a lot of curb space and time that prevent drivers from making speedy deliveries.

Another factor compounding the urban delivery problem is dwell time. The amount of time it takes to complete a delivery affects traffic congestion in the city. The faster a driver can unload his or her deliveries, the faster he or she can be back on the road. The solution for this is three-fold.

  1. The first method to reduce dwell time is to implement better routes. Left-hand turns take more time and are likely to cause more accidents that right-hand turns. If drivers prepare their routes ahead of time to emphasize right-hand turns, they can reduce accidents and save themselves time.
  2. Another approach to reducing dwell time is to focus on new construction. By building loading bays into new builds, truck drivers have a designated location for pick-ups and deliveries.
  3. A final method that proved effective in a testing phase is to implement Common Carrier Locker Systems. These systems act as miniature distribution nodes that facilitate delivery density. Greater delivery density means lowered delivery costs and fewer stops. During a test run, Common Carrier Locker Systems reduced delivery times by 78%.

The proliferation of e-commerce orders and deliveries is creating new challenges for the trucking industry. Prolonged deliveries or failed first deliveries increase operation expenses, further shrinking already tight margins. If your trucking business is struggling to meet financial goals, Cline Wood can help. Contact us to learn innovative ways to reduce trucking costs.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Improving Driver HOS Compliance

Posted August 27, 2018 by Administrator

Proponents of the electronic logging device (ELD) mandate champion the device as an enforcer of existing rules. While detractors balked at the technology, advocates argued the devices didn’t change the hours of service (HOS) regulations. They contended that so long as drivers were complying with the HOS rules, the device wouldn’t change their day-to-day driving. However, therein lies the problem.

The 14-hour rule says a driver’s clock starts when he or she gets behind the wheel. The clock is a measure of duty time, not driving time, which is where most of the problems begin for truck drivers. While the Federal Motor Carrier Safety Administration (FMCSA) created the HOS regulations with the intent to improve safety, drivers are saying the rules are creating the opposite scenario. ELDs don’t allow for any wiggle room, and drivers are now feeling much more pressure to deliver in a certain time frame. While drivers may be complying with HOS regulations, many contend they are engaging in unsafe driving practices to do so.

For example, drivers who don’t make their destination one day may begin their next day at midnight after a few hours of sleep. Another issue is drivers can’t put a pause on the ELD if they are tired. Even if drivers begin to feel drowsy, they feel compelled to continue driving until their 14-hour allowable on-duty time expires for the day rather than stopping for a rest and picking back up again later that day. This can result in several hours of drivers operating a CMV while tired. Other serious safety concerns include:

  • Drivers rushing through work zones to beat the clock
  • Serious instances of road rage during traffic backups
  • Limited parking while the HOS clock ticks down on an ELD

Compounding this problem are unnecessary wait times. Drivers have long complained about loading and unloading times at shipping and receiving facilities. Now, that time spent sitting counts against their on-duty hours, and drivers are taking umbrage. Opponents argue drivers should charge retention rates for long shipping and receiving wait times, but it’s not always that simple. Many drivers encounter shippers and receivers that refuse to pay retention fees and then switch to a different driver or fleet.

To make matters clear, drivers do not have a problem with ELDs; they have a problem with the existing HOS regulations. Before ELDs, drivers could find a way to fudge their hours. Now, they have no such recourse since ELDs are tamper-proof. Drivers believe trucking associations and FMCSA can resolve most of their problems by addressing the following key areas:

  • Reducing wait times at shipping and receiving facilities
  • Improving parking so drivers aren’t rushing against the clock to find a safe place to rest
  • Amending the HOS regulations

The final point above will require more than proposed changes and rule-making. Truck drivers contend that FMCSA doesn’t understand their industry, and makes regulations about a job they don’t comprehend. Drivers urge lawmakers to get behind the wheel with them for a week to see how HOS regulations are having the opposite intended effect. Truck drivers believe that only by experiencing the job can regulators make smart and effective rulings. To learn more about trucking safety, contact the experts at Cline Wood.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

How to Address Farming Labor Shortages with Technology

Posted August 20, 2018 by Administrator

Farming is a demanding job with often incongruous pay for the hours worked. A major contributor to that problem is an insufficient workforce. With many viewing farming as unskilled labor, it’s hard for farmers to attract and retain reliable laborers. As a result, they have to do more and more with limited resources. As farmers creep ever nearer to critical capacity for working hours, innovators are postulating a workable solution in the form of farming robots.

How Will Robots Help?

Automating tasks is not a new concept. Businesses in every industry are unloading their tedious tasks on machines to streamline their processes and free up the human workforce to focus on tasks that are more important. However, agribusinesses have a harder time translating automation into the field. Now, innovators are addressing this need with robots that can perform physical labor.

Even with pay increases, farmers can’t keep laborers in the field to pick fruits, vegetables, etc. Wages range from $11.50 up to $20 an hour, but this still isn’t enough to attract a stable workforce. As a result, farmers are turning to technology to help bridge the gap between consumer demands and their physical labor limitations. In Florida, a startup company developed a robot that can pick strawberries at the same rates as 30 laborers. It can pick a single plant clean in eight seconds and cover eight acres in one day.

Other Potential Uses for Agriculture Technology

Simple labor is just the beginning of robotics technology in farming. Innovators have big plans to automate harvesting, processing, packaging, and handling grocery logistics. The technology has progressed to the point where a robotic arm has the same dexterity as a human hand. This allows the machine to handle soft foods like tomatoes and grapes without damaging them.

Robotics is poised to disrupt the farming industry; however, the intent is to save farmers time while reducing costs. If your farm is struggling with burgeoning expenses, Cline Wood can help. With years of industry experience, we know the risks involved in managing a farm as well as how to mitigate them. Contact us to learn more about reducing your risk to improve your bottom line.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Distracted Driving – Keep Your Focus on the Road Ahead

Posted August 16, 2018 by Erin

Deadly rear-end highway accidents continue to be on the rise – but they can be prevented – and we have resources to help you!

According to the National Highway Traffic Safety Administration (NHTSA), distracted driving is dangerous, claiming 3,450 lives in 2016 alone.1 Our Cline Wood University webinar entitled “Keeping Your Focus on the Road Ahead”, presented by Mike Bohon – Safety Representative, Great West Casualty Company, focuses on this critical topic, the consequences of distracted driving, and details how to prevent these types of accidents. We strongly encourage your Safety Director and drivers to review this webinar at your earliest opportunity via our website here, along with other great information located on our Safety & Claims Resources page (click on the University tab, then select Safety & Claims Resources in the drop-down). Thank you for your dedication to safety!

 

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This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

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