Input from agents, MGAs and carriers is invaluable when assessing the current conditions in any insurance line. We can gauge the attitude of markets and see what the major issues are affecting pricing, underwriting, and capacity for the future.
However, the insured's viewpoint can add valuable insight as to why a particular market may be experiencing a certain degree of softness or hardness, as well as letting us know how well the industry can handle rate changes. In the case of the trucking market, this is especially true as rising fuel costs are having an impact across the board.
The exchange of information within the insurance community is very useful, but if we don't get an insured's perspective, it would be like a doctor diagnosing an illness without talking to the patient, or a field commander dismissing intelligence reports.
The insured perspective
We went to the home office of Celadon Trucking Services in Indianapolis to get their perspective on the issues facing the trucking market. Started in 1985,Celadon now is the largest transporter of truckload freight between Canada and Mexico. It has terminals in Michigan, Illinois, and Texas; employs more than 3,500 people; and runs over 7,200 trailers. It has handled more than two million crossings between the United States, Canada and Mexico since 1985. The vast majority of Celadon's drivers are employees.
Celadon's top management addressed the major transportation issues, such as driver shortages, safety, technology, and recruiting. According to Brett Terchila, director of recruiting for Celadon, he's not aware of a shortage of drivers. He said that it's more likely to be a "churning" of drivers. Some companies may be losing drivers to other companies that provide better working conditions. Terchila said that the over-55 drivers are used to staying on the road for periods of weeks, even months. The younger drivers who are coming into the market will not work those hours. Terchila noted that Celadon pays well and offers more time at home for its drivers. The time away from home is 10 to 17 days and their drivers receive one week's pay for every 30,000 miles driven. Celadon has a saying that they have two customers, the driver and the client.
According to a recent article in the Indianapolis Star, a report by Little Rock, Arkansas-based Stephens Investment Banking, drivers ranked "respect from management" second only to pay, more important than health care benefits, pension plans, and time away from home. Almost 40% said they left their last trucking job because of a lack of recognition and respect.