How a shortage of drivers impacts safety, risks in trucking

Jason Cannon:
CCJ's 10-44 is brought to you by Chevron Delo, heavy duty diesel engine oil. Now there's even more reasons to choose Delo,

Matt Cole:
How trucking's driver shortage affects more than just freight movement.

Jason Cannon:
You're watching CCJ's 10-44, a weekly episode that brings you the latest trucking industry news and updates from the editors of CCJ. Don't forget to subscribe and hit the bell for notifications so you'll never miss an installment of 10-44.

Hey everybody, welcome back. I'm Jason Cannon and my co-host, as always. On the other side is Matt Cole. According to the latest projections from the American Trucking Associations, the trucking industry is short. Somewhere around 60,000 truck drivers don't come after me. I'm just telling you what the statistics say, but that number was released last fall and it's not as bad as it has been in recent years, but it still represents a sizable labor shortage.

Matt Cole:
Not only does that impact fleet's ability to move freight, it also has implications on the drivers. The fleets do have. Joining us this week is insurance broker Aons, Jeff Borgman, who talks about how a shortage of drivers impact safety and risk in trucking.

Jeff Borgman:
I think what I would say, regardless of how the numbers trend and where the numbers go, definitely a challenge for the industry is finding recruiting, retaining, awarding talent in the trucking space continues to be a focus of a number of the clients that we work with. We have a whole risk consulting group that works within the Aon world that works with a number of these large entities on this specific topic. And so we see it and hear it really from the horse's mouth on this, right, that there is a challenge to find and attract talent and retain talent. So am recently, did they do a global risk survey every couple of years, and that just published not too long ago. And one of the segments that we hone in on is transportation logistics. There's two primary risks that came up even in our top 10 that we heard from a global audience of folks, one of which is workforce shortage as being one of their top 10 risks was actually number five on the list of respondents.

And then failure to attract and retain the top talent was number seven or number eight on that list, I think. And so it's very much front and center for them. Well, we focus on within some of those spaces is how do you build strong practices around driver recruitment, especially in the insurance space because we know on the back end of this where we sit as a broker in between these two things we sit in between the customer and the insurance entities when we work with our insurance entities, these are the top things, age of driver, driver history, these are going to be pretty obvious to the audience that we're probably talking to and experience in the space typically experience not just broadly, although that is a good starting point, but also specifically within the confines of what you're who and who you're driving for. And I think that's the other thing that I would say in regard to the A TA study and some of the commentary around it is it's much more diverse than just big rig trucking.

It's much more diverse than just freight delivery, long haul, short haul freight delivery. It really has broadened even in the last five to eight years with the introduction of the Amazon delivery service providers and other spaces. You're in sprinter vans all the way up to large truck and you may as a particular entity in this space cover all of those areas. And so you're looking for drivers that have experience in multiple different arenas and in multiple different capacities, and that creates a fairly unique set of things that you've got to do as an employer to track talent there and find people that have done this in this space or to be able to train them. And I think that's what we're seeing primarily in our space is how can we help entities build programs, training programs, training modules around some of this stuff, places to gain experience that meet what we know will be some of the tried and true insurance requirements that are good are going to meet on the back end

Jason Cannon:
With trucking. Now, generally in its peak season as shippers look to build inventory ahead of the holidays, having skilled experienced drivers is as critical now as it's ever been.

Jeff Borgman:
It comes every year, and I think that's the thing that people can prepare for, but what you can't prepare for sometimes is all of a sudden now you've got peak season and you've got drivers retiring, sometimes retiring ahead of this time because they know what's coming. Some of them are going to stick around, make their money kind of during this time period too. And what we've seen is a lot of the workforce shortage and a lot of the talent is related to that is it's getting a little bit thinner in the middle, right? And you've got a little bit heavier skew to the older drivers, which from an insurance perspective, obviously it's really two sides. There's usually a minimum age requirement that a lot of times will come into play, or at least from a rating perspective, you're going to get a better rate once you hit a particular level and you're going to get a different rate as soon as you top out at a level.

And so when you look at that from trying to mitigate that level of risk, as we look at it in this trucking space, it comes back to those same things. Are you going to have enough capacity to be able to handle load? I think again, what we're seeing is that the immediate translation is if you don't have enough drivers now drivers are driving longer, drivers are potentially driving in locations, maybe they're not as familiar with because they're taking on new routes or additional routes. And all of that adds to, again, from our perspective, the insurance risk around that. And so it comes back to those same things. How are you able to manage the logistics part of the transportation piece routing a number of hours in a cab? How can you mitigate some of that? How can you find ways to recruit short-term driving scenarios?

Which again gets just as tricky because the same pool a lot of times is going to be in that space as is going to be in the OR looking for a career in the space, and you're just trying to find a lot of that. And so what we're seeing is a lot more coordination between the different parts of the supply chain to mitigate this risk, right? It's not just on a small fleet trucking entity to try and go find a driver sometimes now. Now they're leveraging their relationships with freight brokers. They're leveraging their relationships with large entities that are moving freight to try and help mitigate some of the shortage and some of the supply opportunities that are coming. And you're saying a lot larger entities take on more of that logistics practice than outsourcing it to try and build their own basically programs or sections of their company that can handle their shipping needs. And so all of that creates different complexities and opportunities in this space to try and really address that core problem of are there enough people to drive the trucks and move the freight that we need?

Matt Cole:
While every fleet's goal is to be safe, the freight still has to be delivered. Jeff talks about what fleets can do to mitigate risk after a quick word from 10-44 sponsor Chevron lubricants.

Speaker 4:

We serve customers from Birmingham, Alabama to the Gulf Coast, so our people and our trucks are booked solid all day. There is no slack in our schedules. These trucks can't break down. I choose an engine oil that takes care of the number one issue with our engines emissions, so we don't have to worry about DPF clotting. I choose the engine oil that keeps our trucks hauling. I choose delo 600 A DF.

Jeff Borgman:
I think what we've seen and what we've tried to advocate for in different spaces is utilizing the tools available that are out there today that are proving much more capable than they maybe even were five years ago. A lot of this maybe comes down to it's not just a technology question. This is a people business, right? You need a person in the truck driving it. I know there's lots of conversation around autonomous trucking and other things like that whole different topic conversation, which I feel still think we're a long ways from because it's still going to be somebody in that cab that's moving the F freight. So again, we advocate for looking into leveraging telematics information in companies because not only does that help one train drivers, you can use it as a training tool. You can help mitigate safety because you got a lot of information and data that you wouldn't have available to you otherwise to help manage some of that.

You also get the opportunity to see some more visibility into things like routing, time of day delivery, where are the safest routes to take and leveraging that information that a lot of these companies are starting to build and build good repertoires and reservoirs of. Because I think that's the other thing too is when ELD mandates came out, when those sorts of things were there, it's very nascent, felt a little bit more intrusive than it was helpful, but given the growth of some of that industry, I think there's a lot of data available even to small fleet entities. I know it's a cost and that can come with that, but I think what it can mitigate on the backend around driver protection, driver coaching, telematics information on vehicle maintenance that are all things related to safety and keeping trucks up to date can really help to mitigate that in the space.

The other thing that we see specifically with that too is we know there's a lot of risk even on the driver recruitment side, around visibility into trucking, nuclear verdicts, things that would keep people from entering the space because it's like, why do I want that exposure for me? I may be a decent driver, but why would I want to be in a situation where I could get caught on that one? It might not be even my fault. So we've seen a lot of this help that it's not a solution to that wholeheartedly, but it does help. That is to be able to put forward facing cameras in the trucks first, notice a loss to carriers that they can communicate with and provide that information for so that because carriers do, insurance carriers do, although it doesn't feel like it sometimes when you're sitting in the cab, they do want to help advocate for truckers.

They do want to help advocate for those folks, especially that they're on the hook for the risk there. Help them mitigate those situations, and so the more information that they have available to them, the better they can help advocate on behalf of those customers and on behalf of those truckers. We do see a lot of that in leveraging that data, leveraging those things, some of those larger entities to be able to do that. Then finding spaces, whether it's industry associations, whether it's various state and local municipalities that may help with this, where can you pull some of those resources together to help driver training, driver recruitment and have some affinity groups that are trusted. I think that's the biggest thing in the industry is a lot of times you see entities that come in that maybe just don't have the level of expertise or have the level of relationship with a lot of these folks, but where can you find some trusted entities that you can leverage to help build that rapport and platform for you? They are out there. They're starting to pop up a little bit more and more, and so how can we help really embed those entities with some of these folks?

Jason Cannon:
Jeff mentioned earlier that the age of drivers is a big consideration for insurance carriers with regulators testing, lowering the minimum interstate driving age from 21 to 18. He's hopeful that may change.

Jeff Borgman:
I think you're seeing openness to it, right? Trucks and rental cars, you have to be 25. Not sure why, but that's obviously there's lots of data and background to that. These insurance companies have lots of history and experience in this space. It's not that they don't have the data to back this up. There are some entities definitely out there, especially you're seeing a lot more creativity, I would say, in the insurance spaces around the offering of insurance on two parts. One is to help figure out is there a way to solve for losses and claims in the insurance space because that's still going to be the driver of insurance costs for everybody on this side, and then what are the key factors related to that, specifically driver age has always been one of the drivers has been one of the leading indicators of that, but I think what you're starting to see is that the availability of this data, going back a little bit to the telematics information and some other things, is there's things that we can see on the insurance side of the equation that we didn't see before.

So you could have a really good 21-year-old that could drive a truck. They have better reaction times, they have better instincts sometimes than a much, much older driver or on the older age spectrum of this just on part of that, and you can see that reflected in the data. So I think you're starting to see some, especially if you can get certified programs coming out of this and you can partner with some of these folks. They have some, and I think that's one of the things the trucking industry has going for it is it gets put into the blue collar category most regularly, but there's more restrictions in the trucking space and barriers to entry into the trucking space to qualify people for it, right? Then I think people understand, and so you have to get a CDL, you have to go through the training exercise, you have to go through the various programs and certifications.

Typically, there's requirements for brokering loads that you have to pass in order to get there. Sometimes those are just thresholds, and so the leverage all of that information, I think you are seeing some more openness to say, yeah, we're open to bringing those numbers down, and I think there'll be some creative solutions in that space, especially if you require telematics and safety programs, if you can leverage that with the specific insurance carriers or smaller entities that have a bit more flexibility with their product offerings. The other thing that we have on the insurance side, much like trucking, very heavily regulated, so it's very difficult to make change at state levels and then to make that national, and so what you're starting to see is more people pop up in some surplus line spaces to offer insurance product does create a little bit of additional risk for the trucking entities on that side because sometimes those are harder to get through the various entities that they're working with, but those can offer a little bit more flexible product in that space, so you are seeing some thawing in those spaces.

You're starting to see some creative opportunities and solutions, definitely more tech forward companies that are starting to come into play. There's also varying opinions on how good tech companies can be in the insurance space. We always like to see ones that have a bit more insurance backing and insurance expertise than just tech, but those we can see starting to come on board and starting to prove out some of their theories and hypotheses on the very question you're asking, which is the age restriction, the right one, or can we nuance that better by saying, here's the real factors that we know are contributory towards claims and losses and other things. It's really time of day, it's route, it's road condition, it's all the telematics data you can get, hard braking, cornering, speeding. That's much more indicative of loss and risk than simply age.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.