Using financial data provided by motor carriers from all sectors and fleet sizes, the American Transportation Research Institute (ATRI) annually documents and analyzes detailed trucking costs. Mining operating expense data from 2008 through 2019, ATRI released its 2020 update to “An Analysis of the Operational Costs of Trucking” with a bit of relatively good news for fleets and operators.
Given the substantial insurance cost increases over the last several years, it appears that the industry may have hit the ceiling in its ability to continuously cover annual double-digit increases in insurance premiums. ATRI finds fleet size is also playing a bigger role in how insurance costs and risks are managed. Breaking down the insurance cost per mile by fleet size, ATRI says the smallest fleets, those with less than 26 power units, reported insurance costs of over 15 cents per mile in 2019.
Fleets with more than 1,000 power units reported insurance costs of 5.3 cents per mile. Not surprisingly, says ATRI, specialized fleets reported the highest insurance costs per mile with 7.5 cents per mile. These carriers, explains ATRI, often haul more dangerous freight or extremely valuable cargo, and therefore insurance costs adjust accordingly.
The good news is insurance and claims decreased every year from 2017 and stabilized at nine cents per mile in the 2019 data. ATRI found private fleets, as units of non-trucking companies, generally have more resources and strategies for hedging insurance cost increases.
According to insurance industry experts, insurance costs will continue to increase in the near future, but at a slower rate of growth. Calling it a moderating effect, ATRI says the lower rate of growth will likely be attributable to increased use of active safety systems and some positive changes associated with state-level tort reform.
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