Trends in Shipping that Affect Trucking and Brokerage- CSA

The Council of Supply Chain Management Professionals ( CSCMP) reported that transportation costs are rising. They rose 6.2% in 2011 with different sectors having different results: Railroads- up 15.3% 3PLs and freight forwarding- up 9% Trucking- up 6% Non asset based logistic providers ( including brokers)- up 10.9% Morgan Stanley coincidentally reported that 55% of polled shippers were hesitant to use a carrier that has at least one of its seven Basic scores in an Alert status ( over the threshold). New Hours of Service Rules are estimated decrease driver productivity by 3 to 8% because of the reduction in hours a driver can work in a week. So what does this mean to an insurance underwriter: 1) Everyone in the transportation sector is getting more revenue. Rates are up so if a trucker or broker is having a hard time making money today even with fuel costs, chances are they are not going to be able to sustain their business. 2) Drivers are going to have be paid more per mile or salaried as there will be an continued exodus to other jobs if they cannot get the hours or miles. The only thing helping driver retention is current unemployment but it clear the jobless do not view truck driving as a job solution. 3) Like it or not, CSA is here to stay. The brokers and the truckers want to view any carrier operating as acceptable; however, insurance companies and shippers are looking at it in an entirely different way. There will be a move for better selection while at the same time a suppposed scarcity of qualified truckers.