Trucking Industry Outlook: What We’re Looking Forward to in 2023

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Text, Wednesdays with Woodward (registered trademark) Webinar Series.

A coffee mug sits next to a laptop on a desk. Text, Travelers Institute (registered trademark). Travelers. A woman appears on a video call. Text, Jessica Kearney. 

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JESSICA KEARNEY: Good afternoon and thank you so much for joining us. I'm Jessica Kearney, assistant vice president here at the Travelers Institute, standing in for Joan Woodward today, and I'm thrilled to welcome you to today's program. 

If you've joined us for a webinar before or if you've followed any of the work of the Institute here, you know that roadway safety and innovation is a key pillar of our educational programming. We've explored topics on this program including the evolution of telematics, how to change risky driving behaviors, the future of insuring autonomous vehicles, distracted driving and so much more. 

Today, we're thrilled to dive into a critically important sector in transportation and roadway safety-- trucking. We have three wonderful speakers, who I'll introduce momentarily, to provide an outlook on the trucking industry and to help us peek around the corner and see what we have in store for 2023. 

Before we get started, I'd like to share our disclaimer about today's program. 

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Slide, About Travelers Institute (registered trademark) Webinars. The Wednesdays with Woodward (registered trademark) educational webinar series is presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate. Travelers Institute (registered trademark). Travelers. 

Slide, Wednesdays with Woodward (registered trademark) Webinar Series. Trucking Industry Outlook: What We're Looking Forward to in 2023. Logos, Travelers Institute (registered trademark), Northland Insurance (registered trademark), , American Trucking Associations (registered trademark), Big I Minnesota (registered trademark), C.B.I.A., UCONN School of Business, M.S. in Financial Technology, MetroHartford Alliance.

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And with that, let's jump right in. First, I'd like to extend, really, our enormous thanks to our partners for today's program, who you'll see here onscreen-- Northland Insurance, the American Trucking Associations, the Master’s in FinTech program at the University of Connecticut School of Business, MetroHartford Alliance, the Connecticut Business and Industry Association, and the Big I Minnesota. Huge thanks to these organizations. 

We're going to kick things off with some opening comments, as always, from our speakers, and then we'll bring it back together for some moderated discussion, and, importantly, your questions. So you know the drill here. There's a Q&A ribbon on the bottom of your screen in Zoom. Please drop your questions in, really, at any point throughout the program, and we'll make sure to get to them and give them to our speakers as we get underway. 

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Slide, Speakers. Pictures of four people. Text, Jessica Kearney - Assistant Vice President, Travelers Institute, Travelers. Ed Gilroy, Senior Vice President, Legislative Affairs, American Trucking Associations. Donato Monaco, President, Northland Insurance. Chris Hayes, Assistant Vice President, Workers Compensation and Transportation, Risk Control, Travelers. 

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So with that, let me introduce our three speakers for today. First, we have Ed Gilroy, who is senior vice president of legislative affairs for the American Trucking Associations, or ATA. In this capacity, Ed oversees and manages all aspects of the ATA's congressional affairs and activities, including the development, implementation and communication of legislative initiatives affecting the trucking industry. 

This is Ed's second stint of service with the ATA. He previously worked in the Association's Capitol Hill office as VP for legislative affairs and represented the industry before Congress and the federal government on matters relating to labor and employment, employee benefits and tax. 

Prior to rejoining the ATA, Ed served for 16 years as director of workforce policy for members of the U.S. House of Representatives Committee on Education and Labor. And all in all, he brings 30-plus years of experience in Washington, D.C. 

Next up, we're going to hear from Donato Monaco, who is president of Northland Transportation, one of the longest-tenured truck insurance carriers for commercial trucking companies. He's responsible for Travelers' fleet and nonfleet transportation business and serves as a member of the small commercial leadership team here at Travelers. He has a long history of leadership in the insurance industry, having worked in health services, group benefits for small businesses and reinsurance. 

And then we'll hear from Chris Hayes, who serves as assistant vice president of auto and workers compensation risk control for Travelers. He oversees risk assessment strategies, development of service strategies for our insureds, and training staff on the essentials of safety and risk assessment. Chris has an extensive background in safety, and he's also been a regular speaker of ours here at the Institute on all matters related to roadway safety, including distracted-driving education programs. 

So with that, I'm pleased to turn the floor over to Ed Gilroy from the ATA. Ed, take it away. 

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Ed appears on the video call. Slide, A.T.A. (registered trademark), American Trucking Associations. 

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ED GILROY: Thanks, Jessica. And thank you for inviting me to be with you all today. I appreciate it. I should say good afternoon to you all, or good morning I suspect for quite a few of you. But I'm thrilled to join the webinar today and such a distinguished panel. So let me say thank you right up front. 

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Slide, Travelers. November 2022. Ed Gilroy, S.V.P. of Legislative Affairs, American Trucking Associations. Logo, A.T.A. (registered trademark). 

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Quickly jumping into things here and so we can get to the other panelists and hopefully to your questions, I want to give a higher-level view with respect to how things are currently going here in Washington, D.C., the political environment. 

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Slide, An Exciting Time in Washington. A bullet point list. Bullet, Political Environment: Wacky and Wackier. Bullet, Biden Administration, Pandemic, then pivot. Supply chain and workforce challenges. Priorities. Bullet, Congress. House. Partisanship increases after moments of pandemic agreement. Bullet, Senate. More balance and tied. 

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As you can see at the top of the slide, it is, to say the least, an exciting time here in Washington, D.C. We're a week out from really critical midterm elections that are going to impact things significantly. In a word, the political environment is wacky, or wackier, and continues to move in that direction. 

I want to touch on just a couple of things, though, in talking about the political environment. First, with respect to the Biden administration, where they've been, where they currently are and where they may be headed. A little bit of the same with respect to Congress. And then move into some of the issues that we as an industry and we at the ATA are focusing on. 

With respect to the Biden administration, keep in mind that when Joe Biden took office in January of 2021, that the country, in fact, the world was in the midst of a public health crisis. So understandably, that was the focus of the administration-- frankly, for all policymakers, including Congress here in Washington, D.C., was how best to address the critical issues, problems resulting from the pandemic. And that's where the Biden administration appropriately focused their time and attention. 

With hopefully the worst of the pandemic in the rearview mirror, the administration pivoted to other issues, in particular supply chain challenges and workforce challenges. These were both offshoots or results of the pandemic. You'll recall on newscasts from a couple of years ago the multitude of cargo ships parked off of LA and Long Beach Harbor; workforce challenges as millions of Americans were thrown into unemployment. So the administration had to pivot to addressing those issues, and they did, and they continue to work on those, as well as other priorities. 

Top of the list I think for other priorities is the economy. As part of the economy, the continuing challenges with respect to inflation. So that's what the administration has focused on for much of the last couple of years. 

With respect to Congress, a similar but somewhat different story. Again, the pandemic has affected how Washington operates generally, certainly how Congress operates. We saw in the early days of the pandemic a real move toward bipartisanship, which was a really good thing to see, and again, driven by the need to address a very real, very serious public health crisis. 

We saw moments of, fleeting though they may be, of bipartisanship in Congress that, unfortunately, quickly changed. And soon after we got most of the pandemic behind us, much of the partisanship, particularly in the House of Representatives, returned. 

A little bit different story in the Senate, where there is a-- the so-called upper body takes a more measured approach to things, more balanced and more thoughtful in their deliberations. Moving on, please. 

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Slide, A.T.A. Key Priorities. A bullet point list. Bullet, Safety. Drugs - testing and challenges with decriminalization. Technology - innovations and mandates. Truck Parking. Bullet, Energy and Emissions. Federal slash State tensions and patchwork. Protecting the "all of the above" strategy. Bullet, Taxes. F.E.T., Alternative Fuels. Road User Taxes. Bullet, Workforce and Training. Support for Recruiting and Training. New Talent. Diversity. Credentialing. 

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Just a couple of words about ATA's key priorities. You'll see it's no surprise that we bookended this slide with both safety and workforce training, and importantly, safety at the top of this list, as safety is our first and foremost, most important priority in the trucking industry. 

As an industry, we spend billions annually to ensure the safety and well-being of our drivers as well as the motoring public. So appropriately at the top of this list, a couple of the things that fall within that category of safety, drugs, in particular the expanding decriminalization across the country of marijuana and how that impacts our industry. 

Technology. We're thrilled with some of the technological advancements that we're seeing and how they can improve and enhance safety. How those are regulated, and we can come back to that, is important. 

Truck parking. It's critical that at the end of their working day, truck drivers who have fairly mandated restrictions on the hours that they can work have a safe and-- safe place to park their vehicles. 

Workforce training. One of the biggest issues, challenges that we face. Current shortage of drivers of about 100,000 currently expected to increase exponentially in the coming years. And so we are focused greatly on what we can do both legislatively and with the regulatory agencies to support new means of recruiting and training drivers, bringing new talent into the industry and hopefully, a more expansive, more inclusive, more diverse workforce. And so those are focuses. 

One way of doing that is through credentialing, trying to streamline federal credentialing requirements, and we spend quite a bit of time and energy in that area. Moving on, please. 

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Slide, Lame Duck Action. A bullet point list. Bullet, Must-do list for Congress. Fund the Government. Defense Authorization. Tax Extenders. Debt Limit Increase? Bullet, Preparing for November Elections and the 118th Congress. Majorities? Oversight? Logjam or crossing the aisle? 

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Just real quick, lame-duck session. I mentioned Congress elections next Tuesday. All 435 members of the House, about a third of the Senate we're likely to see, if not seismic shifts here in Washington with respect to control of Congress, certainly important ones. Importantly Congress, when they complete the elections next week, have to come back for what could be a pretty frantic four weeks of a lame-duck session, short but formidable. 

Must-do list on the federal government through the remainder of this fiscal year: They have to pass a national defense bill, they have to do something about a fistful of expiring tax provisions, and they have to decide whether or not they're going to decrease the federal debt limit. 

As we let them do that, we're also preparing for the 118th Congress, but new majorities in Congress may mean we expect that Republicans reclaim control of one or both bodies of Congress. We expect to see that in the House. We expect to see quite a bit of oversight as they seek to hold accountable the Biden administration for policies put in place, and, with an eye toward, frankly towards the 2024 presidential elections, the politics of that were already beginning. 

What that means with respect to partisanship, bipartisanship, logjam or crossing the aisle remains to be seen. We look forward to it. We're prepared for it. The Senate indeed expects we may see more of the former than the latter, but we will work feverishly to do what we can to advance the interests of the industry, and on a bipartisan basis. And I'll pause there, Jessica. Thank you. 

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Slide, a picture of a group of people in white shirts and black pants posing in front of a semitruck. Text, Thank you. 

Donato Monaco appears on the video call. Slide, A picture of two trucks on a highway. Text, Northland Insurance. Successfully insuring trucking companies since 1948. A bullet point list. Trusted Commercial Truck Insurance. Bullet, Northland Insurance is one of the longest tenured truck insurance carriers for commercial trucking companies. Bullet, Our dedicated team of transportation industry experts and flexible commercial auto insurance services has helped keep trucking companies safely on the road and in business for 70-plus years. Bullet, We remain exclusive to the transportation specialty wholesale channel to ensure expertise and maintain service standards for our trucking customers. 

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DONATO MONACO: All right, thanks, Ed, for the introduction. Good afternoon. Good morning. My name is Donato Monaco. I'm with Northland Insurance here in Hartford, Connecticut. Northland is owned by the Travelers, for those of you who aren't familiar with us. 

Before I give a quick overview on Northland and get into some of the topics that are impacting truck insurance, I just wanted to put a plug in for Ed. Thanks for joining the panel at short notice today. Wish Bill the best. Hope he feels better soon. 

And in general, I encourage everyone on the call, if you're not familiar with the ATA, learn about it, support it. They provide great perspectives, industry information, and they're always up to date on current trends. They're a great advocate for the industry. So thank you for all the ATA does and for joining our panel today. 

So Northland Insurance, we've been around for a while. We're going to celebrate our 75th year next year. So a little trivia some of you may not know, we were started by the Hamm family in the St. Paul area. And the Hamm family owned a brewery called Hamm Brewery, so we're rooted in beer, so we're fun to our core. We never mix drinking and driving, that we take safety very seriously. 

And over the last 75 years, we've really have a great distribution network and a great customer base. We're one of the largest insurers. We have over nearly 20,000 current policies read it all and admitted paper. We focus primarily on interstate, trucking Class 8, heavy truck, although we do have some light trucks. 

And we sort of mirror the transportation industry, right, so we have a lot of owner-operator and small fleets. We do write some midsize and quite a few larger fleets as well. Everything we write is fully insured, and we do offers. We have some deductible programs, but the jumbo fleet, as many of you know, typically like to self-insure and the Travelers does have a home for them as well. So our National Accounts team can write self-insured business. 

And over those 75 years, we've been able to develop what we call the Northland Advantage, which is really a comprehensive insurance offering. So from a coverage standpoint, most of our policies are multiline. We write auto liability, physical damage, general liability. We also offer cargo insurance. And we have some enhanced coverages like roadside assistance and towing, which is really to help truckers today, especially as those prices have spiked recently. 

Starting on the front end, we have dedicated transportation underwriters who specialize in fleet and nonfleet, so they're very consultative. Our-- one of the differentiators that we bring to the table is one of the most experienced risk control teams, really, in the country. 

Many of them have a transportation safety background, have come to Northland. Some of them have been risk managers or safety managers of fleet, so they have deep industry experience, and they're sought after for their opinions and their recommendations. And we offer those services not only to our largest fleets but also to midsize and smaller fleets. And we have a variety of self-service tools as well. So that really sets us apart. 

And then, of course, our dedicated Northland Claims, which are designated specifically for trucks. So they know the business, and they are very familiar with specific geographies and jurisdictions. Also, have great relationships with local counsel, so they could bring in to quickly settle or defend claims and drive the best outcomes. 

And then lastly, I do have a note on here. I just wanted to call out that we distribute exclusively through the wholesale channel, and we work with transportation specialists in the wholesale market because we believe that trucking is very complex coverage, and the truckers that we insure have a high expectation and need for white-glove service. 

So working with some of the most experienced and knowledgeable wholesalers in the business allows us to provide that level of expertise and service that truckers require and can often not be available through a general retail agent. And the wholesalers can provide good service through them as well on their customers’ behalf. 

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Slide, A picture of a pen and a pair of glasses sitting on a document titled Insurance Policy. Text, Northland Insurance. Successfully insuring trucking companies since 1948. A bullet point list. Multiple factors impacting truck insurance market. Bullet, Decrease in number of federal filings for truck businesses since peak in 2021. Bullet, Claim costs continue to rise for both physical damage and auto liability. Bullet, Advances in truck technology should continue to improve safety. Bullet, Data analytics enabling tailored insurance services, enhanced risk selection and sophisticated pricing. 

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So the next slide. So here are a few factors that are impacting transportation insurance. The good news is that trucking is a highly regulated business, so there's a lot of procedures and filings in place, and the Federal Motor Carrier Safety Administration requires that truckers file for an interstate license, and because of that, we're able to use that as a proxy for the overall size of the market. 

And what we've seen this past year is that there’s been a decrease in the number of filings. Now, it's not a huge decrease. It's off roughly about 2%, and it is off a peak in 2021. And what happened into '21, if you think about the time, we were coming through and out of COVID. There was pent-up demand in the supply chain for products to be delivered. 

Diesel prices were in a very different state, much more affordable. There were a number of people that were out of work and drivers that were available to drive. So we saw an increase in the number of new-venture filings. 

And over the last 12 months, what we've seen as a constriction in terms of the overall market and a shift from some of those new ventures or owner-operators that have chosen to get out of the trucking space as some of the demand has moderated somewhat and the spot rates have softened. 

It's not as attractive from a revenue standpoint. And with increasing costs, some of those owner-operators have even gone out of business, or what typically happens is they've hired onto a fleet or have actually sold their equipment and joined as a full-time driver. 

So from an overall market standpoint, we've seen that there's been a small decrease in the number of opportunities and a shift from new-venture owner-operators to a slightly more tenured or experienced base of fleet operators. 

During that time, we've also seen increases in claim costs, and that's across both auto liability and physical damage. A couple of things driving that. So physical damage in part due to the supply chain issues coming out of COVID, but also because of the equipment that is on trucks now has more sensors and technology that costs continue to rise from a replacement standpoint. 

As the demand had increased for drivers to have trucks, there is a shortage in replacement vehicles as well as parts, and the cost of labor to replace them continue to rise and is still rising. And then new vehicles had been delayed, so it was really a-- sort of a tailwind against the costs of physical damage, and we see that trend continuing. 

From an auto liability standpoint, we often talk about nuclear verdicts or social inflation, and that continues to be a problem. There are certain states where that's a bigger problem, but nationwide, we continue to see the number of large settlements, $10 million and plus increase and the average size of settlements increase. And there's a variety of reasons why that occurs. 

So we continue to have to be able to address that from a trend standpoint, but our claims team is well aware of that. And what we find is that when we're able to get involved most quickly in claims and settle, we're able to avoid the high cost of taking these to trial and additional legal costs. So that's one way to try to offset the trends we're seeing. 

And then the advances in truck technology from a safety standpoint continue to improve overall experience. The types of things we're talking about could be automatic braking or lane assistance, additional camera technology, not just forward and rear but internal, driver-facing as well. And we expect that to continue to be adopted and utilized to improve claims on the highways. 

And then the ability for insurance companies to use analytics to help tailor insurance products to both select and price but also to be able to provide additional coaching and actually change behaviors and improve safety as well. So those are just a number of high level-- I'd say, right now the trends in the insurance marketplace, which we'll get into more detail. So with that, I think I'll turn it over to Chris Hayes. 

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Chris Hayes appears on the video call. Slide, a picture of two men shaking hands in front of a semi truck. Text, God, grant me the serenity to accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference. Reinhold Niebuhr, 1937. 

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CHRIS HAYES: And thank you, Donato. So, thank you for having me today. Jessica and Donato asked me to join this call and discuss some of the things I've learned over the course of my career and what that does to inform us about the future of trucking. 

And as I started putting this together, I realize I've worked on the safety and insurance side of trucking for about a quarter century. So first thing I noticed is that I'm a lot older than I thought. But it also gave me a chance to reflect on the things that have been standing out over the years related to trucking safety. 

And as I thought about it more, it really came back to this quote. And this is the serenity prayer from Reinhold Niebuhr. "God, grant me the serenity to accept the things I cannot change, the courage to change things that I can, and the wisdom to know the difference.” So, what does this have to do with trucking? There's a lot of things impacting trucking and trucking safety, and there's a lot of things that are not in the hands of the average truck driver or the average trucking company owner. 

So we'll spend a few minutes talking about the things that are just environmental issues that are really out of our hands, and what's left and how we can start impacting, making trucking safer. 

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Slide, Demographics & Economics of Crashes. A line graph titled Annual U.S. Motor Vehicle Accident Deaths. The x-axis lists years from 1913 to 2019, and the y-axis shows numbers from 0 to 60,000, in increments of 10,000. The line starts at around 5,000 in 1913, then goes up. The line shows increases and decreases, peaks in the early 1970s, then continues to increase and decrease, with a gradual trend downward. Text, Source: National Center for Health Statistics.

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So if we move on, we'll take a look at just some raw numbers. And this is-- a look at this-- the number of motor vehicle fatalities in the United States year by year since 1913. 

We should really notice, it's not a very clean line, lots of ups and downs, lots of abrupt changes. In general, though, it's been going up. But if we look a little further, you might see some other stats. 

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Arrows pointing to various points on the line appear. Text, Stock Market Crash 1928, U.S. enters Second World War, Baby Boomers turn 16, 1973 & 1979 OPEC oil embargoes, and Great Recession. 

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So every time there's been a dramatic change in the number of motor vehicle fatalities, there's almost always a demographic or an economic issue that ties to it. 

Starts with the stock market crash of 1928. Suddenly people don't have jobs, hardly had cars, and we had a slight decrease in the number of crashes. Things went along until the United States entered the Second World War. Now, a lot of our drivers are instead in the military. There's rationing of fuel. There's fewer new cars on the road. Things are a little bit off until my dad got his driver's license. 

My father was born in 1947. I think of him as the very first baby boomer. And you'll notice that right as baby boomers are turning 16, crashes started going up dramatically, and it continued as the number of people driving went up as baby boomers got their licenses. 

Again we see a couple of other drops with some different changes of the economy, the oil embargoes-- 1973, 1979, both had sharp drops, number of drivers-- number of crashes because people weren’t driving as much. And again, it happens during the Great Recession starting 2008. 

So while we like to think that individual driver behavior, things like distraction and speed make a difference, and they do, there's bigger issues that drive the number of people on the road, and this tends to be what drives crashes. So let's move on to a little deeper look.

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Slide, Costs in Lives, Costs in Fuel. Is there a correlation between fuel costs and motor vehicle crash trends? A graph with red bars and a blue line. The x-axis lists years from 1994 to 2020, and the y-axis shows dollar amounts from $1 to $4, in increments of 50 cents on the left, and numbers from 10 to 20 on the right. Legend, Red bars, Average U.S. Dollars per Gallon, Blue line, Deaths per 100,000 population. The red bars start small in 1994 and increase steadily, with a sharp spike upwards in the early 2010s, then decrease slightly. The blue line starts at just below 17 in 1994, decreases slightly, then dips low starting in 2006, and rises again starting in 2014. Text, Sources: National Center for Health Statistics, U.S. Energy Information Administration. 

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I mentioned to our speaker Ed earlier that the first time I heard this theory was actually from Bob Costello, the economist from the American Trucking Association, about 20 years ago. And he made the case that the price of fuel ties very closely to the number of motor vehicle crashes and the number of fatalities on the highway. 

The logic is that as fuel becomes more expensive, there's less disposable income. People drive less. It takes people off the road. We have fewer crashes. Sometimes in an audience like this, it's hard to make that connection. I usually get not mad, but I frown when I see the amount of fuel costs that go into my car, but I can certainly pay the costs. 

But if we all think back to a time where we were concerned as to whether we could actually have enough money to fuel that car, whether it was a discussion between do we pay the rent or do we pay for gas, now there’s a lot of people and probably times in our lives where that was a challenge. 

So we see on the right here some stats showing the number of deaths per 100,000 for motor vehicle crashes and the average price of a dollar of fuel. And you can see there's a bit of a correlation. 

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A new line graph appears on the slide. The x- and y-axes show the same numbers as the previous graph, and a red line and a blue line. Legend, Red line, Average U.S. Dollars per Gallon, Blue line, Deaths per 100,000 population. The lines show the same ups and downs, starting low in 1994 and gradually increasing, with a spike upwards from 2011 to 2014, then a sharp spike downwards. 

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But if we advance a little bit more, we take that axis and flip it, it's actually a lot closer. And you can see there is a pretty close correlation between the price of fuel and the number of motor vehicle crashes. The cheaper fuel is, the more people are driving; the disposable income, the more we're out driving around. 

Now, if you can solve fuel costs, that would be great. But just know this process on the outside of the hands of those people on this call, this is just one of those factors that's always out there. You've got to keep our eye on. Moving on. 

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Slide, Polling Question. A picture of a stoplight at an intersection. Text, You are approaching a traffic light and it turns yellow. What do you do? Slow down? Speed up?

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I think we have a polling question. And our question is, you are approaching a traffic light, a light turns yellow. What do you do? Please make a choice. All right, see how we did. It's interesting. Most of the times I've done this, we get about the same set of answers. About 80% of population says, I will slow down. And good for you. That is the right answer. We're a little lower at 78%, but that's OK. So, 78% of our participants said they would slow down approaching yellow light. 

Now, you're going to a polling question. I'm going to ask you all to take a moment and ask yourself this: If you answer that question when you're between the ages of 18 and 21, how would that change your answer? So we'll take a minute. Most people are remembering a time where they ran through that light right at the end, kind of chuckling to themselves about that dangerous time they were driving and having a little bit of a laugh. I'm sure we all did that. 

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Slide, a picture of men in combat uniforms standing in front of a helicopter, and a picture of a semitruck and an S.U.V. driving next to each other on a highway. 

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But moving on, we'll talk about why that might be something we do think about as we talk about policy in the future. There's a lot of discussion, and I'm sure we'll have it again over the course of this discussion as to where the next group of truck drivers will come from and the challenge that you cannot drive interstate until you're 21 years old. 

So there's a lot of argument that-- and we really want to move that age down. When we move down to 18, 18-year-olds should be able to drive tractor-trailers. You should be fine with that. After all, we have 18-year-olds in our military doing arguably the most important jobs we have in the United States. And that is true. 

Also, 18-year-olds in the military are about the most-supervised people in the history of work. They're constantly being observed, coached and managed. By contrast, someone driving a tractor-trailer is on the road for 11 hours a day, making every decision by themselves. 

So it's a bit of a difference between them, but it's not really a great analogy. It's not an argument for or against moving the age to 18. It’s just that these issues are always much more complex than they seem at first blush. It's good to go into these discussions very well informed. 

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Slide, a picture of a document titled Application for Employment, and a circular graphic divided into three sections, with the title Travelers Workforce Advantage (registered trademark). Text, Supporting & Engaging, Attracting & Hiring, Onboarding & Training. 

(SPEECH)

So let's move on to things that we can control. And the one thing we can control, with all these other issues around demographics, the economy and the age of the population, is how we treat our employees and how we manage our employees. 

Travelers has this concept we call the Travelers Workforce Advantage, which is this idea that a well-engaged workforce is a safe workforce and a workforce that will stay with you. Now, we talk about it in three different segments. There is attracting employees, onboarding employees and supporting and engaging employees. 

People tend to think that attracting and hiring that next group of employees is the key. But we'd like to think of it as the end product. The start of this process should be supporting and engaging your current workforce. 

Look at the employees you have today who are the best performers, who are the people you want to keep. What makes them stay? What makes them successful? Ask these questions and start making a workforce that your next group of employees will want to stay with. Then we have to keep the employees that we have. 

As you go through the analysis, we encourage people to look at their onboarding and training programs. Take your best employees. See how do they become your best employees. How did you get them trained and on board and supported to be those best employees? 

And once that's done, then we move into that attracting and hiring piece, where you look at your process for job descriptions, job safety analyses, how you look for candidates, how you interview candidates, what are the attributes besides just having a driver's license that really makes a strong candidate, and bring them in. The more you can support and engage your current workforce, the fewer seats you have available, the more picky you can be about who you bring into your new workforce. 

Now, this is something we talk about for really any employer. And folks in our audience might be wondering, does this work for a commercial trucking audience? Well, let's take a look. 

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Slide, the cover of a report featuring a picture of a truck driving down a highway. Text, Special Report 2020. What Drivers Want Survey. Randall Reilly (registered trademark). New slide, What Drivers Want, Special Report 2020. Job Perceptions. Why did you get into trucking? Check only one. All Respondents. My family was in the business, 15%. I was always drawn to the open road, 33%. Good salary slash way to provide for my family, 26%. I didn't want a boss looking over my shoulder every day, 16%. It was a job of last resort, 10%. Quote, I like to travel and get paid to do it. Source: Randall Reilly. 

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The Commercial Carrier Journal did a really interesting study a couple of years ago, looking at 2,000 drivers and did a poll to see why they were with their jobs, why they like driving and what were the challenges they were saying. 

Now, they're coming up with a new report later this year. I encourage everyone to go look for it. But these are the 2020 stats. I think they're still pretty impactful. The one thing that I've heard over the years is, we really want to be able to move that driving age to 18 because what happens is, someone gets out of high school, they might try a few different jobs, they're not successful at them, they hit 21, now they’ve failed at a few jobs, now they're going to go try to become a truck driver. And so it's people who've failed at something before becoming truck drivers. 

It's an interesting idea, but this study was very revealing. That that's really not the case. For the most part, people who are in trucking got into trucking because good pay, good support, the ability to work in a different environment that you and I might work in. So the idea that this is a job of last resort, as you can see, very low. It's really a job that is attractive, and people aspire to get into. 

So what makes them want to stay? Well, let's take a look. 

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Slide, What Drivers Want, Special Report 2020. Recruiting & Retention. Why do you think fleets are having a hard time finding drivers today? Check all that apply. All Respondents. They don't pay enough, 68%. They don't offer enough miles slash loads, 23%. They don't get people home often enough, 50%. There's no career path, 23%. They don't respect drivers and the job they do enough or treat them as part of the team, 53%. They don't support their drivers and help them deal with shippers, law enforcement, et cetera, 45%. They don't provide good trucks slash equipment for drivers, 19%. Source: Randall Reilly. 

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This is a look at why people are having a hard time keeping the drivers they want. And it might look familiar. So if you look at the stats, they don't pay enough. Well, honestly, any study you look at looks at employee satisfaction, always has an element of pay. 

I'd like to use this opportunity to ask Jessica and Donato for a raise, which I don't think they can do, but I'm going to use this opportunity anyway. We also go on to not enough home time. It's just a feature of trucking. Home time is challenging, but increasingly, as companies move to regional operations and First Mile/Last Mile, I think it's going to be less of a problem. 

So let's look at everything else. It's about support. It's about engagement. It's about having a career path. It's about having management to understand you and your challenges and willing to engage and support you as best they can. So really every issue that we looked at with our Workforce Advantage applies to trucking as well. 

So one of the big issues we're all facing is that shortage of truck drivers; where is that next group of truck drivers going to come from. I think the answer is, let's look at the best ways we can support our current drivers to make this the best job we can for the next generation of drivers. And thank you. 

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The slideshow disappears. Jessica and the three speakers appear on the video call. 

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JESSICA KEARNEY: Chris, thank you so much for that. Ed and Donato as well. We had quite the tour of issues in the trucking industry. We got a little bit of a history lesson with you, Chris, all the way up to the current midterm elections, which are about to happen in Washington, D.C., and everything in between. 

So now's our opportunity to bring it all together. And Donato, I wanted to bring you in first here. You talked a little bit about Northland and the type of business that you do. What's the sentiment out there today among your insureds, Northland customers? What's on people's minds? 

DONATO MONACO: I think our customers are very interested in the state of the market from an economic standpoint. There are a number of forecasts out there. Some are fairly optimistic around stable rates and stable demand from a tonnage standpoint. 

Some people feel like the potential rail strike or low levels of the Mississippi River causing increased demand. We're moving into the holiday season, although we've worked through the supply chain backlog, there are plenty of inventories to move, so people are confident that the market will remain strong. 

In fact, we just had a report in September. The most-ever, new net orders of Class 8 trucks were submitted in the month of September, so 56,000 new vehicles. So clearly, some people are feeling very optimistic about buying new equipment. 

That being said, we also know that there are some challenges, probably most notably-- and I'm sure my fellow panelists will have a comment on this as well-- but just the challenge around diesel prices and availability. I don't think there's going to be a shortage. There's low levels, and prices are going up in some geographies more dramatically than others, but that will impact people's ability to make money continuing to drive. 

So what we like to think about is just prepare for volatility. Try to lock into contracts if you can. Try to lock into rates where you can get fuel surcharges. Plan now. If you're a fleet owner and you have drivers, plan ahead. Try to get around some scheduling and some flexibility if you need to pivot. Certainly with interest rates rising, try to reduce debt, if it's variable rate especially. That's probably what’s top of mind. 

JESSICA KEARNEY: No, that's great. And I think that covers a good swath. And Chris, I wanted to ask you next too. Obviously, we covered quite an array of topics in the opening. If you were to zoom out as likewise as Donato just did, what are the top issues on your mind? 

CHRIS HAYES: The top issues on my mind are the top issues I've seen for 25 years, there's just a different flavor to it every time we get to it. And those top issues are fuel and drivers. So fuel prices right now, very volatile. Geopolitics will play a big role in that. And drivers, we're at a very unusual place with the economy. 

I'm not an economist, but anyone's guess what unemployment will look like, will go up or down. That will drive the availability of drivers. So just the large amount of uncertainty around those two topics I think is the key thing on people's minds right now. 

JESSICA KEARNEY: And Ed, to throw it over to you and bring you back into the conversation, clearly, we've just been talking about the shifting sands of the economy. And you see this up close in Washington, D.C. At the ATA, how are members preparing for what's next? 

ED GILROY: Thanks, Jessica. I think-- and Chris just touched on it. And I mentioned in my earlier comments, sort of top of the list in terms of challenges, concerns, I mentioned the driver shortage. And so that's a continuing issue or area of concern that we are working on. 

Both Chris and Donato mentioned fuel prices, again, a major concern. It's something that we're watching very closely. And Chris mentioned our economist Bob Hayes, I think, it's fair to say that Bob shares Donato's view with respect to the situation regarding fuel. That, yeah, prices are too high, but in terms of supply, we should be OK, absent any unexpected developments, but it is certainly top of mind. 

More broadly from a policy standpoint here in Washington, one of the things we're looking at very closely is the continuing implementation of the infrastructure law that was enacted at the end of last year. 

Really beginning to see the Department of Transportation, in particular, implement that law across the country and how they do that and how quickly they do that is of paramount importance. I think fair to say we think they're doing a fair-- better than fair job, pretty good job so far, but we look forward to working with them on its implementation in coming months. 

JESSICA KEARNEY: And actually, can we just spend one more moment on the infrastructure law for folks here that might be following that or looking for developments over the next year? What will you at ATA be looking for or rooting for? 

ED GILROY: Yeah, thanks, that's a great question. So one of the things, we were very excited as an industry and an organization to see passage of the bill and enactment. It was long overdue and enormously frustrating to many of us that it took as long as it did to get it done. In particular, we've been pleased with and excited about the financial investment that this bill includes with respect to infrastructure. 

It is truly generational in terms of the financial investment, hugely important, not only to the trucking industry in terms of roads and bridges and highways and the like but to the broader infrastructure of the country. And so it's important that we work with the administration to ensure that those vast new resources that the bill included are spent effectively, efficiently and wisely. And we are working every day to help make that happen. 

JESSICA KEARNEY: Terrific. Thank you. And, Ed, just to continue, I know there was mention of the possible rail worker strike. Can you comment on that at all? 

ED GILROY: Yeah, a little bit. It's not so much my or ATA's lane, but a little bit on it. My understanding is that most of the railway labor unions have agreed to the proposed labor agreement. There are a smaller number, as I understand it, who continue to oppose it, and so that agreement is not yet in place. 

Work continues. We hope the parties come together and can reach some kind of accommodation. I don't know how many folks are aware trucking is rail's biggest customer. So what happens with the railway industry, certainly where there could be a work stoppage, would significantly impact our member companies and the customers that they serve. So we're watching very closely. We hope the parties come together, and we're looking forward to seeing that happen. 

JESSICA KEARNEY: Great. Great. Thank you. That's terrific. And I want to turn back to insurance now directly. And I know Donato, you gave us a bit of a market update, and obviously, you're in a fantastic position to--  fantastic vantage point from that respect. What do you think are the most important trends happening in insurance, kind of expanding on some of your earlier comments? 

DONATO MONACO: I think the use of data is definitely a trend that we continue to benefit from. This industry, as I mentioned, has a lot of publicly available information through the filings or even the IFTA, which are tax reports. So insurance companies can use that to select and price. But also there are now new sources of third-party data, which can help companies and also provide opportunities for agencies to be able to do prospecting in a very targeted, focused way. 

We also see that the automation of pulling that data in can streamline processes. So for many of our retail wholesale partners, you can reduce the work associated with getting quotes and servicing truckers in a more efficient way, which is really beneficial for everybody. And then we continue to see the development of digital or self-service tools for our customers and agents as well. 

JESSICA KEARNEY: That's terrific. And I see we're getting a lot of comments about that in the Q&A as well, just people asking about where that stands and how they can learn more about it. So that's great. And then kind of piggybacking on this insurance conversation in trucking, Ed, I want to talk-- and again, I'm looking at the questions here from our audience members. We're getting a lot of questions about lawsuit abuse and nuclear verdicts and its impact on the trucking industry. So I'm wondering if you can comment on that. 

ED GILROY: Sure. And just briefly, I think as this group can certainly appreciate, this is a huge issue for our industry. Some would go so far as to say it's a scourge on our industry. 

Lawsuit abuse and the impact of these nuclear verdicts and the impact those things have had not just on the price of insurance for our carrier members but in some cases even just the simple availability of insurance. 

So it's a very big issue and one that we are devoting significant resources to addressing both at the state level as well as here in Washington, D.C. We have been and tend to be fairly aggressive working with our state associations to address lawsuit abuse at the state government level. 

We've had some success there. Texas in particular comes to mind, and we expect to be even more aggressive going forward. Also taking up this fight at the federal level, working on bipartisan legislation in this Congress, and we expect to again next Congress to try and address lawsuit abuse. And at a minimum, educate members of Congress about its impact on our industry. 

JESSICA KEARNEY: That's great. That's great. And I'll just read one of the audience questions we have here, and we'll get to many more in the next few minutes. Jim Kopec from Hub is asking, what suggestions do you have for proactively containing or preventing nuclear verdicts. Do you have any success stories in this area? So I don't know, Ed. Certainly welcome your thoughts. But Donato, do you have any thoughts on that from where we sit? 

DONATO MONACO: We can't completely eliminate, but one of the ways to help address is having great safety programs in place and good records that are consistently applied and able to be presented. 

We have a great claims department that has been successful by getting engaged very quickly and where possible, either defending or, if necessary, moving to a quick settlement. And I think there may have been a question about, do we have any examples. 

And a good example might be the use of camera, so forward-facing cameras that typically are thought only to be used in defense. And they clearly have worked in that case. We have a number of examples where we were able to prove that a driver was not liable, especially in these fraudulent claim scenarios, where now, it's not just individuals but actually rings of people. I think there's an operation sideswipe down in New Orleans, where they're now up to 41. 

Basically, criminals that have fraudulently filed claims either completely fabricated or falsified the information. And having a camera to be able to disprove those is extremely helpful. But even in the rare scenario, where a trucker may be liable, to have that data, we can also more quickly gather, assess and then settle. So it avoids court and these nuclear settlements that we're so concerned about. Ed, Chris, any other thoughts? 

CHRIS HAYES: If I can add something to that. Having a good safety program that's documented, structured, hits all the best practices is very important. What's more important is actually following it. And that tends to be where people get into trouble at these events when you can find that, oh, there was a change in the economy, change in customers. Something happened, and we broke from our standard practice, and we broke from our documented practice. That tends to be one of the biggest issues. So having a policy and sticking to that policy so you can be able to go to a court and say, we did our best, here's our best, here's how we stuck to it, that's a good defense. 

JESSICA KEARNEY: Great, thank you, Chris. And I have two follow-ups from that just looking at our audience questions. Rusty Husted asks, "How soon before forward- and cabin-facing cameras are required?" Anyone want to take that one? 

CHRIS HAYES: It's funny to get that question because it wasn't that long ago that we said the driver shortage is going to get worse because we're seeing more cameras. And what I heard from fleet after fleet was, all the drivers hated them until the first driver had his job saved by the camera, and then everybody wanted them. I don't know what the answer to that is, but it's becoming increasingly common. And certainly, I think more drivers are in favor of them than there ever had been in the past. 

JESSICA KEARNEY: Great, and then Chris-- 

ED GILROY: [INAUDIBLE] 

JESSICA KEARNEY: Oh, go ahead. 

ED GILROY: No, no, no, I was just going to say I'm happy to jump in, not to offer any great insight. I think it's fair to say there’s a variety of views, mixed views with respect to the federal-- certainly at the federal level mandate on onboard, forward-facing cameras. It's something that our members discuss and debate, as I said, the diversity of views, but something that I think is getting greater attention, conversations with the Department of Transportation and something we're keeping a close eye on. 

JESSICA KEARNEY: Terrific. And then Chris, we touched on some of the criminal activity, and we did have a question come in about cargo thefts and the status of cargo thefts. Could you weigh in on that and what you're seeing? 

CHRIS HAYES: I can. So I checked in with Scott Cordell, who is our lead on cargo theft at Travelers, and he asked me to remind everyone that we have, I believe, the only dedicated cargo theft investigative service in the industry, which I'm very proud of. And he did point out that the cargo theft has increased dramatically over the course of the pandemic. The same commodities that we often see being targeted, which is easily-- easy-to-sell consumer goods, pharmaceuticals, but especially electronics have become a increased area of theft concern. 

So what can we do about it? The simple answer is be harder to steal from than the truck next to you. It's not a great answer, but it's an answer that works. Think about where you're going. Look at the high-theft states. Don't park in those states. Park away from the-- park away from areas where we know theft occurs. Don't leave trucks unattended. Very simple things make your truck a little less easy to steal from. That makes a big difference, especially going into the holidays. 

JESSICA KEARNEY: That's very practical. Ed, anything on your end there? 

ED GILROY: No, I think Chris covered it pretty well, Jessica. Thanks, I'll leave it there. Thank you. 

JESSICA KEARNEY: Great. We're also getting some questions in about autonomous trucks, automated vehicle technologies and the increase in automated vehicle technologies. There's been a lot of headlines over the last several years about where autonomous vehicles are going and when they will arrive, not all of which have panned out in reality. Donato, I'm curious. Where do you see the evolution of automated vehicle features, safety technologies today, and how is that-- how do you foresee that impacting the trucking industry? 

DONATO MONACO: Yeah, well, just autonomous vehicles in general, I think for years, pundits and technologists have said, it's coming. We're clearly not there yet, but we continue to monitor that from an emerging risk standpoint. It's also an emerging opportunity standpoint. So the way Travelers, we build a team around that, and we constantly keep an eye on that. 

I would say that more recently, we've seen some companies, some pilot some different routes. I think of Kodiak is out of Silicon Valley, but they're operating out of Texas, and they've done some point to point. Now, all the tests today still have a driver in there that they can take over for safety reasons. I think Embark is creating sort of a beltway across the southern states to be able to do something similar. So it is coming. Today, we don't really see it necessarily in practice for the next couple of years, though. 

JESSICA KEARNEY: And Chris, any comments on that from a risk control perspective, even kind of taking a few steps back and looking at some of the automated technologies that are here today or may be coming in the near future? 

CHRIS HAYES: Absolutely. I would say to Donato's point, everyone who's ever said my kids will never need a driver's license because the cars will drive themselves, their kids are probably in college now. So that's interesting to look at. The head of autonomous vehicle development at MIT-- Jessica has also been in meetings with this individual-- has said 2050 is his projected time to start seeing them on the roads. 

So the answer there is, who knows when it's going to happen? But in the meantime, there are some amazing advancements being made in safety to get the technologies ready eventually for autonomous vehicles. I think one of the key things to look at is the things like forward radars, how that ties into driver systems, how that ties into automated driver-assist systems, things like lane-departure warnings, automatic braking, stability control for trucks. 

There's fantastic advancements made in safety that's being implemented today. Autonomous may happen. It could happen tomorrow. It could happen in 50 years. I don't know. But I do know that these advancements in trucking safety to get us there can have a real impact today. 

JESSICA KEARNEY: Great, thank you for that. And I wanted to do rapid-fire audience questions as we're moving into our last, final few minutes here on the webinar program. Donato or Chris, what do you think insurance agents can do to provide value aside from just selling a policy? This from Jake Ferreira at Street Smart Insurance. 

DONATO MONACO: Some of you may be familiar with the term we call a second sale. So the first is an agent trying to sell to the fleet owner. The second sale would be the agent preparing a quality submission for the insurance carrier to be able to provide a very competitive quote so that they'll have more markets and a better fit for that customer. 

So that can mean everything from not just checking the box, but actually providing details around what type of equipment is used, what type of programs they have, any successes they've had in terms of modifying behavior or driver retention, those types of things to be able to provide to the carrier. And then, during the account, obviously, servicing that account and preparing appropriately for the renewal, which may include doing many of the risk control recommendations that have been provided on the prior term. 

CHRIS HAYES: One of the most fun things about working in risk control is the fact that we talk to a lot of customers. We get a lot of good ideas, and we get to share them with the company that we see next. And I think the same applies to our agency partners. Understanding what risk control we're recommending, be able to pass that on to more than just that one customer, helping pick up tips to make us all safer on the roadways can really bring that extra value. 

JESSICA KEARNEY: Great. OK, I'm going to keep going here. Earl Starring from ENIA wants to know, how do you see telematics playing a role in trucking and insurance? I don't know who wants to jump in on that one. Chris? 

CHRIS HAYES: Telematics is here to stay. I think when most companies brought their ELDs in, they rolled into a telematics system. There's a lot of promise to telematics. Having data on where your trucks are, what they're doing is great. It provides a lot of driver monitoring, which I know is much more challenging than most people expect. The consultants that work for me spend most of their time working with insurers to understand that data and how to use it better. So it's here to stay. There's a lot of promise, and I'd like to see it realized. 

DONATO MONACO: Yeah, we just had that first iteration may have been usage-based, how far are they driving, and maybe using that in selection and pricing from an insurance standpoint. I think the next generation is really what Chris was just talking on being able to provide driver feedback and tailor safety programs specific to those drivers to actually change behaviors and make the road safer. 

JESSICA KEARNEY: Fantastic. All right, Ed, this one's for you. Steven Babcock from ECBM wants to know, what are your thoughts on California and the independent contractor situation? 

ED GILROY: That's a great question and one we spend quite a bit of time talking about. Interestingly, ATA just wrapped last week. We had our annual conference and trade show out in San Diego. And so there was quite a bit of discussion about California and California regulations in particular with respect to the so-called AB5 legislation, legislation imposing serious restrictions and testing requirements on independent contractors. 

It's a legislation statute now that we think was ill-advised at its inception and inappropriately swept the trucking industry up in an effort, we think, to regulate independent contractors in the so-called gig economy, the Ubers, Lyfts, the Instacarts of the world. Trucking is certainly not those companies, not to cast aspersions towards them at all. But it's certainly something that we look at very carefully. 

Also, with the emissions regulations that are coming out of California, we occasionally joke that it seems like many bad ideas come from California and then sort of roll across the country. And so we look at those things very carefully. But the IC issues and the emissions issues are two in particular. 

JESSICA KEARNEY: Great, thank you for sharing your views on that. Donato, I have one for you from Jeffrey Marks. You mentioned some of the market dynamics currently in consolidation. Do you believe that trucking companies will continue to consolidate through 2023 as an economic downturn will put additional pressure on smaller fleets and owner-operators? 

DONATO MONACO: Yeah, so that's just one man's opinion, but I do expect that would continue. Maybe not to the level in terms of the frequency, but there still will definitely be some consolidation as some smaller fleets look to get scale and consolidate routes. And it really all depends on where we do go. And the idea that had slipped my mind previously was that if we do go into a recession, I think most people feel like it will not be prolonged or very deep. So that is possibly a good sign so we can get through this period of time. 

JESSICA KEARNEY: Great. My huge thanks to all three of you for this really fantastic conversation today. We covered a ton of ground. We had a ton of questions coming in. Thank you also to our audience for joining us. I'm going to turn to a few of our upcoming programs and preview what we have available coming up next week. 

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Slide, Wednesdays with Woodward (registered trademark) Webinar Series. Register: travelersinstitute.org. Upcoming Webinars: November 9 - Reclaiming the Lost Art of Connecting. November 16 - Global Hotspots and Geopolitical Risks. November 30 - Got Your C.P.C.U.? (registered trademark) Explore New Opportunities to Grow Your Risk Management Career. December 7 - The Business Imperative of Diversity, Equity and Inclusion. December 14 - The Construction Job Site of Today: Risks and Opportunities. 

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So, big thanks, again, to our three speakers, Donato, Ed and Chris. And thank you to everyone for joining us. There's a link to our survey about today's program in the chat. So please let us know what you thought, and also let us know what else you'd like to hear about during these programs moving forward. 

We have a great slate of programs to close out the year. Next up on November 9, we'll look at the lost art of connecting. So when was the last time you brushed off your professional network since COVID, and how did you go about it? Author and CEO Susan McPherson is going to share her approach to building meaningful professional and personal relationships. 

Then on November 16, we have former U.S. Deputy Assistant Secretary of Defense Ian Brzezinski joining us to discuss today's geopolitical risks and global hotspots and what it all means for our businesses. 

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Slide, Wednesdays with Woodward (registered trademark) Webinar Series. Watch Replays: travelersinstitute.org. LinkedIn, Connect: Joan K-O-I-S Woodward. Take Our Survey: Link in chat. #WednesdaysWithWoodward. 

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And then as always, please visit us at travelersinstitute.org for our full lineup of programs, registration, replays and more. Thank you, again. Our huge thanks again to Ed, Donato and Chris, just a really fantastic discussion today. And thanks, everyone, again, for joining us. See you next week. 

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Text, Travelers Institute (registered trademark). Travelers. travelersinstitute.org.