First, Let’s Kill all the Commercial Trucking Insurance Companies

No one enjoys hearing the news that a family-run trucking company is parking its rigs for good. The headline in June was harsh, slightly sensational, but plainly factual: “Indiana trucking company to shut down after insurance costs double, rates fall.”

Thinking about what one might say to the press and employees on camera about why your business was all of a sudden failing, one might be tempted to blame a couple very familiar bogeymen like Big government and uncaring insurance companies.

It’s sort of like what Shakespeare said in one of his plays: “First, let’s kill all the lawyers.” Even way back when, there was enough general loathing for the predations of the profession in general society that a clever wag could toss out that bit of populist red meat and without doubt, the audience and everyone is in on the laugh.

Reported in FreightWaves by Ashley Coker, the owner of Anderson, Indiana based A.L.A. Trucking, Inc. Alan Adams lamented that because of the way the Federal Motor Carrier Safety Administration (FMCSA) handles Compliance, Safety, Accountability (CSA) scores, the companies commercial trucking insurance rates essentially doubled to more than $700,000 in 2019 compared to less than $340,000 in 2018.

Reading the headline as it’s offered, one might think “First, let’s kill all the commercial trucking insurance companies,” but in jest of course.

Bring out the usual scapegoats: Corporate greed, heavy hand of government

Losing control of any seemingly thriving, profitable business and seeing it crash and burn after more than 30 years in business has got to be among the more distressing things any person might go through in their professional and personal lives. Adams story is especially tough, considering his business was seemingly thriving just two short years ago.

Adams explained to the reporter that the jump was due to factors beyond the company’s control: “I didn’t do anything wrong with the company. It’s the way the government has this new grading system that is affecting a lot of companies.” He explained that “If there’s a situation on the road where a car comes off the on-ramp and bumps into a tractor trailer, until that claim is settled, the insurance company charges a company with that claim.”

Although it is true his insurance rates may have ultimately been what pushed his company past the brink, the company’s financial troubles are also stemming from a general slowing of freight and rates across the market. The reporter said Adams admitted that falling freight rates had also taken its toll on the company.

Anyway blaming commercial trucking insurance cost and it partner in crime, the gubbermint for shuttering his business is something easily understood by most everyone, and fits in well with the culture of victimhood narrative as well. “Of course, it wasn’t my fault my business failed, it was the fault of my insurance company raising its rates.”

Growth is hard, businesses fail

According to the report, Adams business was going through a big expansion--which may have something to do with the equally dramatic rise in the company’s insurance rates—not to mention other costs. For instance, there was no mention of his debt load or financial risk profile. For all we know, perhaps through no fault of his own, A.L.A. had several drivers cited for moving violations in 2018 and more than just distracted drivers “bumping” into his trucks. Again not known, and pure speculation, but bad luck on the road can pile on too.

Growth is the hardest thing for any business to manage successfully – especially when expenses go up and revenues go down as the headline also points out. Could it be their fleet operations managers and drivers lost sight of some of the “details” regarding maintenance or safety documentation.? It’s easy to imagine, in the midst of an expanding dynamic business, some things could begin to slip through the cracks and jump CSA violations. Driver safety and hiring policies could have easily “lapsed” in the rush to hire new drivers for the company’s fleet expansion plans.

What Shakespeare meant about killing all the lawyers

What did Shakespeare mean with his famous quote? A few years back, one revisionist in the New York Times explained that in the context of the line, Shakespeare was referring to killing only bad lawyers. OK, sure let’s kill only the bad ones, fair enough. I think the writer was a lawyer too. So let’s apply that logic to commercial truck insurance companies. For the purposes of this blog, let’s only joke about killing the bad ones.

Without judging A.L.A. and its fleet risk management practices (or lack thereof) too harshly, there are ways to manage CSA scoring – sort of like fixing and maintaining your credit score. safety expert Shawn Alexander, Safety & Loss Control Specialist finds there are many ways to work with FMCSA and manage CSA scoring to help moderate commercial trucking insurance rates and keep costs manageable.

Monitor A&I data proactively

To help assure scoring captures the best data and help lower commercial trucking insurance rates, fleet managers can access A&I data at the site. For starters, fleet managers should be proactively monitoring operator data to make sure it is accurate, factual and correct.

You can’t manage what you don’t measure, and fleet operators should be very familiar with its driver’s data so as to shine a light on any potential problems.

Is leased equipment condition generating violations? Even though ownership is outsourced, maintenance of these assets can’t be. If violations are trending with say, trailers, it might be wise to seek service providers with more effective programs. Even small issues with vehicle maintenance can affect CSA scores. For example broken marker or brake lights can add up and negatively impact CSA scores.

Commercial trucking insurance companies use CSA data and often keep a list of high-potential risk indicators to evaluate the carriers’ safety management programs, including brake violations, hours of service violations, controlled substance & alcohol abuse by drivers, and more. It’s pretty simple really; fleet operators who are more proactive managing their maintenance and risk in a programmatic and documented way will help keep CSA scores trending down.