It’s the Law

According to the U.S Code (49 USC 13906), motor carriers hauling cargo within territories under federal jurisdiction must retain cargo liability insurance with minimum limits for loss or damage of $5,000; there is also a $10,000 minimum for aggregate losses involving the vehicle’s cargo for losses or damage caused at any one place and/or time. If a trucking company is found to be in violation of this law by not carrying appropriate amounts of cargo insurance, it is subject to citations as well as substantial fines and penalties.

Common Carriers vs. Contract Carriers

Common carriers are trucking companies whose services are available to the general public; contract carriers only haul for a specific shipper under specified contractual terms. Only common carriers are subject to the above regulations by the Federal government; however, for their own protection contract carriers carry appropriate cargo insurance as well.

What Does it Cover?

The principle job of cargo insurance is to make sure that whatever you’re carrying in your truck makes it to its destination safely. Theft and loss are generally covered, as is damage. Depending on your needs, your policy can cover specific vehicles individually, or it can blanket your entire fleet without specificity.

The expert professionals at Hub Transportation can help you decide what kind of cargo insurance is right for your particular business, then use its extensive network of insurance connections to get you great coverage at the lowest possible price.

How does a trucking company survive over the long term in this kind of toxic environment? The answers to this question are hardly simple ones, and it’s impossible to cover them all in one blog posting. However, companies have to start somewhere. Here are 3 very basic areas where cost-reduction measures can be implemented: right here, right now.

1. Phase Out Unproductive Drivers Quickly

You must set even more aggressive performance goals in order to separate the productive from the unproductive drivers in your employ. There is hardly a shortage of qualified drivers in the industry at the moment, and so setting higher standards simply makes good sense. Higher productivity in drivers can be helped by more effective scheduling of dispatches, load allocation, etc. But if there are bad apples in your barrel, they should be phased out: right here, right now.

2. Use Your Fleet Wisely

You know that a truck nearing the end of its life will not be as fuel-efficient as a newer model; take the time to assess your fleet and put your best-mileage vehicles on longer monthly runs and reserve your older vehicles for shorter jobs. Because newer trucks have less chance of breaking down, they should be the ones to use for night runs to keep costs lower. Set clear boundaries for idle times as well as for MPH limits to save fuel, and put more trucks on the road in the early morning hours for city jobs so they won’t be stuck in traffic. You can make wise changes that will maximize the utility of your fleet while reducing costs: right here, right now.

3. Reassess Your Trucker Insurance

If it’s been a long time since you’ve carefully reviewed your current trucker insurance plan, now is the time to see if you can’t get a better deal elsewhere. A large trucker insurance brokerage such as Hub Transportation uses its vast network of contacts to get its clients the best packages at the lowest possible prices. Making this one simple change could make a real difference to your bottom line: right here, right now.

This is just a thumbnail sketch of the many changes that trucking companies and owner/operators alike can make to help them weather the current economic storm and come out OK on the other side.

The government stimulus package has been of little to no value, so it’s up to those in the trucking industry to find ways to cut costs in every possible way while still maintaining adequate loads and paying a living wage to hard-working drivers. There is no doubt that the economy will rebound over the long term, but in the meantime trucking company owners have to bite the bullet and find ways to keep saving: here are 3 ways for truckers to reduce their transportation insurance premiums right now.

Take a Look at Your Drivers

An interesting fact to consider is that the older and the younger your drivers are, the higher your trucking insurance rates will be! Although younger drivers are likely to have more stamina, they are also less experienced and more prone to accidents. Drivers over the age of 65 have plenty of experience, but may not be as road-aware or have the quickness of reflexes that they used to. Transportation insurance rates will be lower if the majority of your drivers are between the ages of 30 and 65; and, of course, you should insist that all new hires as well as your existing drivers maintain spotless driving records.

Safety Practices

Taking proactive steps to increase the visibility of your good safety practices with the driving public will be a factor that insurers look at when determining your transportation insurance premiums. Equip your rigs with safety signs advising the public on how to drive when they are behind or next to your trucks. Make sure your trucks have extra mirrors and other safety tools that will help drivers to navigate the roads while looking out for the “little guys” next to them. Conduct continuing driver safety education training and create a “culture of safe driving” within your organization: such practices will go a long way toward showing the insurers that you are proactive in your safety practices.

Shop Around

If you have been doing business with a captive agent who only represents one insurance company, you may not be getting the best rates. Hub Transportation is an independent trucking insurance brokerage that has ongoing partnerships with a number of insurance companies, which allows it to negotiate the very best insurance coverage for you at the very best price. As an independent brokerage, Hub is dedicated to representing your interests, knows how difficult it is to make ends meet in a down economy, and is committed to helping you both stay on the road and save money on premiums.

The actual tonnage hauled by large fleets of trucks is falling, meaning that there are fewer truck shipments. In March 2009, the Truck Tonnage Index fell 4.5%, and then again another 2.2% in April 2009. This is the lowest it’s been since 2001. Not only is the trucking industry getting hit hard by the recession, but it’s getting hit with the massive inventory correction that suppliers are undergoing.

ATA Chief Economist Bob Costello recently said, “While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments.” Sales have dramatically decreased, ultimately causing truck shipments to suffer.

The Jim Palmer Trucking Industry narrowly escaped bankruptcy in May 2009. The company had to file for Chapter 11 Bankruptcy in July 2008 due to average fuel costs skyrocketing up to 12% over the last year. Fuel costs forced the trucking company to become delinquent on $1.5 to $2 million dollars in equipment loans and other debt. Fortunately, the bankruptcy judge approved a reorganization plan and allowed the company to escape bankruptcy.

Thankfully, fuel costs have gone down since July 2008. Back then, diesel prices skyrocketed to around $5 a gallon. Now, they are around $2.19 a gallon.

Some say that if you’re looking for signs of economic recovery then just look at how many trucks are on the road. From lumber to food, furniture to detergent, large trucks are the backbone of America. Trucks carry almost all the manufactured goods and retail products in the nation. After the economy picks up and supply is aligned with demand again, then the trucking industry will finally be able to grow again and increase their prices.

An economist with the American Trucking Associations, Mr. Tavio Headley, believes that the economy will soon show signs of improvement and that the trucking industry will pick up as early as next quarter.

Trucking companies who have not been affected by such hard, trying circumstances have either restructured their current trucking insurance or have acquired new, more affordable trucking insurance from Hub Transportation. Hub Transportation continues to see positive growth in the insurance industry as truck owners turn to them for the most affordable trucking insurance rates around.

More and more truck fleets are tightening their control on every single possible risk factor in order to prevent cost losses. Managing safety is the most important factor a trucking company faces. For those who have managed to survive this terrible recession, boasting responsibility and safety can be your claim to fame.  When various trucking companies are fiercely competing for business, those who do not boast trucking safety will fall by the wayside. The trucking company who comes out on top is the one who adamantly reports safety progress to all.

Trucking companies who take safety seriously and pay higher deductibles show that they have confidence in themselves and their employees. Suppliers are now being very picky on who they’ll allow to transport their cargo. If a company has a poor record of accidents or other unfavorable attributes, suppliers are likely to turn to another truck company that has a more stable record and is more dependable.

Hub Transportation believes in offering the best trucking insurance coverage to companies who need a competitive edge to survive in this struggling economy.