We’re over a month into 2023, so it’s time to take the pulse of the trucking industry. Unfortunately, it appears that the industry’s crystal ball is fuzzy.
It’s a little easier to find drivers. It’s a little easier to find equipment and parts. Driver wages continue to rise, which tends to encourage more folks to enter the industry. This has resulted in motor carriers hiring more drivers than in recent years. In fact, between 2020 and 2030, we’re expected to see a rise in truckers by 6%.
These promising signs aside, it’s not all peaches and cream. In talking with our customers, we have heard from some that their hiring rates are rising, from others that rates are starting to decrease, and some are even having banner years.
With all this uncertainty, it’s no time to kick your feet up. We talk with trucking companies every day that are spending more than they should on advertising, turnover, insurance, and claims - even if they’re happy with their hiring rates.
In order to help you succeed amidst the murky waters of 2023, we’re going to examine a few ominous macro trends we see in the trucking industry and how you can combat them.
We’re seeing two headwinds that will only get worse:
If you’ve been following our blogs, you’ve likely read about nuclear verdicts. These are verdicts where the defense must pay $1 million or more. They’re getting bigger and more frequent. However, we’ve been seeing a less obvious trend: the smaller claims are getting bigger, too.
We call these Runaway Verdicts. While the nuclear verdicts make the headlines, everyone else is suffering from the average cost per claim rising. And, not only do you spend more for that trip to the courthouse, but your insurance costs are rising too. Insurance companies have to charge more because it’s getting more and more expensive to cover claims.
"20 years ago, 1 out of 50 claims maxed out policy limits. Today, it’s 1 out of 5. That’s a 9,900% increase. Severity doesn’t matter because of nuclear settlements."
-John Liberatore, Founder & President Primacy Risk Services
What’s causing this increase are billboard trial lawyers who are backed by investors. For example, Morgan and Morgan, a popular law firm in Florida, went from spending $60,000 to $300,000 per day on their advertising. That’s a 400% increase. They wouldn’t dump that money in if it wasn’t fruitful.
The average age of truck drivers in 2022 was 47 years old. In 2019, the average age was 46. While it’s getting easier to hire drivers, it won’t stay that way if things continue in this direction.
As long as the majority of carriers hire drivers who are at least 21-23 years old, trucking will be the second, third, fourth or fifth career. By law, they need to find a job between 18-21 that’s not driving a truck interstate which means they’re going to another job first.
The trucking industry has an aging labor force. Eventually, the gray beards will retire and there won’t be enough newbies to replace them. If this doesn’t impact things directly in 2023, it will have an impact in the years to come.
When it comes to the macro trends, it is what it is. You can’t control it. That being said, you don’t have to throw up your hands and surrender either. There are three direct actions you can take to set yourself up for success in 2023:
You won’t suffer from runaway claims if you don’t have any in the first place. Get ahead of the claims by investing in professionally-produced safety training.
When your drivers are in an accident, even if they didn’t cause it, you’re going to pay. Best case scenario, you’re only paying for lost time, administrative costs, and delayed deliveries. Worst case, you’re paying massive lawsuits. Like we said earlier, one accident can be well over $1 million.
You’re able to completely avoid these costs if you invest in training.
Defensive Driving Programs like LLLCTM allow you to:
When you put resources towards safety training that actually works, you're guaranteed to like the results.
You need to invest in safety training to avoid claims, but you also need to be prepared if the worst happens. You don’t want to get caught by surprise if you’re called into court.
Plus, if you have an out-of-compliance driver in an accident, it doesn’t matter who caused it. It’s your fault because that driver shouldn’t have been there. This is a proven winning argument plaintiff attorneys are making in court.
You need to be ready to provide DQF and training documentation when billboard lawyers send you a letter. Remember: they want a quick win, not a hard fight. If you can prove that you won’t be an open and shut case, they’ll move on.
Compliance tracking software like A-Suite Comply will let you:
When you build a defense with A-Suite Comply, billboard lawyers won’t touch you with a ten-foot pole. They’ll move on to easier prey.
In 2023, it should be easier to attract, recruit, select & hire qualified drivers. But you don’t want to spend a fortune doing it.
While you grow your fleet of drivers, you want to make sure you’re spending the least amount possible. We have proven ways to reduce your cost per hire and stay efficient:
Everyone operates in the same landscape. There is money to be made in every economy. You need to understand your headwinds while still being aggressive. Not everyone will make it through a slow-down, so that’s your opportunity to pounce on customers, drivers, and equipment. You need to be smart with your cash to make those moves.
We see way too many companies overpaying for ads and wondering why their cost of hire is so high, complaining about the cost of claims without investing in safety training, and getting caught with out-of-date DQFs and no plan to fix it.
2023 can be the year you shut your doors or set a record for revenue and profits. It’s not up to the trends. It’s about how you react to them.
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