The Roemer Report November 1986
- Leased Operator Semi Truck Insurance Quotes
- Bobtail Semi Truck Insurance Quotes
- Occupational Accident (Occ Acc) Semi Truck Insurance Quotes
- Cargo Semi Truck Insurance Quote Form
- Commercial Auto Liability Quotes
- Physical Damage Semi Truck Insurance Quotes
- Owner Operator New Authority Semi Truck Insurance Quotes
- Non-Trucking Liability Semi Truck Insurance Quotes
- Contingent Liability / Contingent Cargo
- Motor Carrier Liability
- Primary Auto Liability
Will Autos Still Drive the Economy?
Sales of autos and related products perennially constitute a big chunk of the freight market. Thus, truckers are understandably sensitive to the current vital signs in Detroit. Can the hefty pace of auto sales over the past five years carry through yet another year? For openers, the indus try has three extremely positive factors working for it as it cruises into a new model year. Low interest rates, modest gasoline prices, and sticker prices that are often lower than the Japanese competi tion--these all argue for a continuation of recent trends. But there's also an issue that clouds the future: Detroit has been hawk ing low-interest rate incentives so heavily that it may have perma nently weaned consumers away from buying under normal and financially rational terms. These giveaways may have put future buyers in the refrigerator, to come out only when the low-interest deals are intro duced again. The trade deficit and Federal budget deficit are also concerns. We see no imminent collapse in sales. Nor do we see how 1987 auto sales can match this year's level.
THE LOST ART OF TRUCKING INSURANCE UNDERWRITING: The cost and limited availability of trucking insurance is by now all too familiar. We have cited many of the reasons in detail in past issues. But, there is also a basic skill that goes to the very heart of our industry that may account for some of the trouble truckers and others in specialized insurance lines are encountering. Putting it simply, we're referring to the general decline in underwriting skills that has occurred in the past eight years. The truth is that there are now very few people who can thoroughly and objectively evaluate a trucking outfit's loss history, then develop and secure the appropriate insurance coverage.
WHAT HAPPENED TO THE TALENT? Back in the days of a soft insurance market characterized by excessively low rates, the industry abandoned normal prudent underwriting standards in favor of cash flow under writing. With inflation high, the pressures were simply irresistible to forego sound underwriting to merely secure funds for reinvestment. The guy who could thoroughly calculate the bona fide cost of a poten tial risk and put together a comprehensive program wasn't in demand. All the incentives were on securing funds. Trucking never had that many underwriting experts who really understand the unique nature, risks and realities of this business. When the market switched from hard to soft, trucking simply looked like an unpredictable area with all sorts of risks. In short, it has been an area where many big insurance houses have chosen to avoid. Some of the underwriting veterans who stuck it out through the old market are once again plying their skills. But, there are precious few young people around who have been trained to understand trucking and who feel comfortable working with industry executives in an entrepreneurial basis to develop coverage at an affordable cost.
DEREGULATION IN RETROSPECT: For openers, the term "deregulation" is really a misnomer, since no industry in this country has been totally deregulated. But, given this point of clarity, has the deregulation trend really lived up to the claims of the economists who advocated it? The record is spotty thus far, according to the cover story in this month's issue of Dun's Business Month. Trucking has probably experienced the most sweeping competitive changes of all deregulated industries. The number of ICC licensed carriers shot up from 18,000 in 1980 to about 33,000 today. Moreover, the competition in rates is unquestionably more intense...a factor that clearly benefits most shippers.
There is also the undeniable fact that the economy has been transformed in the process. For example, deregulation has powerfully altered the earning power and bargaining leverage of Teamsters, airline pilots, bus drivers, and many others in the transportation industry. Curiously, few people in Washington now seem to be talking about further deregulation. Increasingly we hear talk about "re-regulation.” It seems that we are now re-examining the virtues of what was once perceived as oppressive government control of key industries. Stay tuned.
DEREGULATION SHIFTS GEARS: Legislation, court decisions and new ICC rules have just about settled deregulation on the federal level. Private fleets involved in interstate trucking can already see the results. In fact, some experts predict that the ICC will have little or nothing to say about truck fleet deregulation by the end of next year. But state regulations are another ball game. Fleets operating on an intrastate basis--and some interstate fleets, too--are still getting choked by hundreds of contradictory state regulation. Many of these rules are ridiculously outdated. Comparing some state regulations to relaxed federal standards is like driving back in time about 30 years. So far Florida, Arizona, Wisconsin, Maine and Alaska are the only "deregulated" states; Delaware and New Jersey were never "regulated" to begin with. Insiders say it's time to shift deregulation from state to federal control. The best route may be federal legislation to limit the states' regulatory powers. Otherwise, industry activists face a long, uphill push in every state.
WHERE THE BUSINESS AND SPORTING GREATS MEET: Two strategic attributes can be found in the business and sporting greats: an extraordinary amount of periph eral vision and an unrivaled sense of anticipation. Consider two of the world's great athletes...Wayne Gretzky and Larry Bird. Those who compete against them say each seems to have a much broader vision of the playing area. Both Gretzky and Bird play as if they were elevated above the playing surface, seeing player positions and unfolding plays that nobody else sees. Both of the greats also seem to know what will happen next. Example: Bird doesn't pass the ball where his teammate "is." He throws it where the player "will be." Gretzky passes a hockey puck in the same instinctive way. That's anticipation. Neither of the above are really physical gifts. They are mental and perceptual qualities…the same common ingredients one finds in today's peak performing businessman.
ANATOMY OF A WINNER: Now and then we all speculate on the secret of success. With top managers the question is twofold: What makes them run…and how do they make others run? A recent study (reported by AT&T Communications) sur veyed 16,000 managers. Here's what they found…A sensitive, participative approach distinguished the best from the rest. Winners focus on people, not tasks, as they rise through the ranks. Willing to share ideas and feelings, they encourage others to do the same…and they are committed to innovation… Top achievers demonstrate a driving need for self-fulfillment. Safety and security pale in importance beside an opportunity to inspire, improve or create. Outstanding managers motivate others by guiding them toward the same goals, facilitating their personal and professional growth.
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