COVID-19 accelerated the growth of last-mile delivery, which comes with new risk management and insurance concerns. - Photo: FedEx

COVID-19 accelerated the growth of last-mile delivery, which comes with new risk management and insurance concerns.

Photo: FedEx


In 2021, legacy issues like the driver shortage and higher insurance costs will persist, and there’s no end to the disruption caused by the COVID-19 pandemic. Both everything – and nothing – has changed for fleet carriers at the same time. 

A shortage of qualified drivers, poor CSA safety scores, and nuclear verdicts have given rise to runaway insurance costs, and the COVID-19 pandemic has shifted supply chains, changed routes, influenced regulations and increased the necessity for comprehensive technological solutions. 

Fleet operators will turn to technology to manage these issues and improve profitability at the same time. With technology now increasingly available to more fleets, the cost of risk per mile will be the best yardstick for fleet operators moving forward. 

Consider the following when developing your commercial fleet’s risk-management and compliance strategy this year:

1. COVID-19 disruption transports last-mile delivery to center stage. 

The pandemic brought B2B businesses closer to the end-user. When commercial and retail docks closed, the demand shifted to consumers’ homes. 

Because last-mile delivery is heavily weighted toward independent contractors, new risks and regulatory issues emerged, including transportation-related licensing, permitting, and intrastate protocols. Insurance policies that once covered the B2B transfer of goods over predictable highways to large docks well-versed in loading and unloading were made to cover last-mile home deliveries as well – a risk that some were not set up for.

New state and federal regulations in light of the pandemic will continue to impact the industry into 2021. New federal hours of service regulations from the Federal Motor Carrier Safety Administration provide additional flexibility for drivers, including expanding the driving window during adverse conditions, changes to the short-haul allowance, and modifications to the sleeper berth exception. 

Carriers will want to review and improve negotiations with shippers in 2021, including  better and heightened contract review in order to protect themselves from unnecessary liabilities.

2. Invest in technology to propel your fleet ahead of the curve. 

More and more carriers are turning to — and underwriters are requiring — in-cab technology. When data is collected and used appropriately, it can help drive operational efficiencies across your fleet by optimizing routes, decreasing accidents, providing more targeted support to drivers, and digitizing training and onboarding. 

Technology that aggregates data, individual risk management programs, claims tracking and service providers in a single dashboard with the goal of improving overall management and compliance and understanding a fleet’s cost per mile is the ultimate goal. An increased reliance on technology in 2021 will help transportation businesses monitor drivers, track and onboard them better and with more direction and purpose that goes beyond FMCSA rules.

Using more technology also means increased cyber risk. Any business that has a fleet and mines data to optimize operations will want to ramp up their cyber security and risk transfer efforts. Make sure your current cyber policy covers your fleet for any and all use of in-cab technology, and your business’ comprehensive technology use. 

3. Recognize the changes caused by the severe driver shortage. 

More fleet operators are considering driver benefits and wellness initiatives to stimulate driver growth. Industry leaders are advocating for Congress to reduce the legal age of drivers – all aiming at reducing the industry’s estimated 80,000-person driver shortage, moving into 2021.

Interest in employment and driver wellness programs, voluntary and group benefits are all increasing as a method of attracting and retaining quality drivers. While benefits have been an industry pain point for years, the pandemic and the growing gap in driver numbers have brought the solution to the forefront at a faster pace.

4. Trust proven risk management protocols.

Proven risk management practices keep coverage costs at bay and, most importantly, safeguard drivers. Safety scores historically rest on the individual risk characteristics of each fleet and their loss experience. This begins with proper hiring and onboarding, better vetting and monitoring of drivers, and proactive training; and today, this also includes health, wellness and performance initiatives for drivers. 

Hiring experienced drivers, keeping them trained, and leveraging technology to manage their risk is the formula that will keep fleet carriers in the clear. These defensible solutions will help reduce the recent rise in the average cost of smaller claims and nuclear verdicts as well. 

Adapting to change in 2021 

For fleet carriers, 2021 will be about increasing and accelerating investment in technology — whether that’s testing autonomous trucks, using new green energy fuels, or tracking your business metrics online. Industry disruption isn’t likely to end anytime soon. Fleet operators are challenged with embracing the disruption instead.  


Mike Birge is the president of global insurance brokerage Hub International’s transportation practice. He has over 40 years of insurance experience as a senior manager in a variety of organizations. This article was authored and edited according to HDT editorial standards and style to provide useful information to our readers.





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