Ongoing driver fatigue, faster demand and limited workforces have all coalesced to create dangerous roadways, with the most traffic fatalities seen in over a decade. While the $1.2 trillion Infrastructure Investment and Job Acts may be a great start to overcoming recruiting challenges, other problems remain.
“A rough road still lies ahead for the commercial auto market with several factors converging to impact driving auto loss costs,” said Rich Magold, Commercial Auto Project Manager at Safety National. “The large and ever-increasing jury awards garner all the headlines, but other factors such as rising vehicle repair costs and a shrinking driver pool are adding to the loss trend.”
These three cost drivers are contributing to current market conditions.
1. Motor Vehicle Accidents
The number of miles driven since the end of the pandemic has been steadily increasing. U.S. traffic deaths have reached a 16-year high with nearly 43,000 deaths in 2021. In the first six months of 2022, traffic fatalities reached 20,175. Claim severity has continually worsened, with 2021 marking the first billion-dollar commercial auto verdict on record. These large jury awards are projected to continue with the pressures of social inflation.
2. Driver Issues
The pool of professional drivers available continues to shrink, with the American Trucking Association estimating a driver shortage that could surpass 160,000 employees by 2030. While there is no single cause of this shortage, some factors include a high number of retirements from the industry, the considerable amount of time required away from home, and the inability of some would-be drivers to pass a drug test. More states continue to legalize marijuana, but a federal ban still bars many from driving.
More recruits may become available as the federally-mandated minimum age to drive commercially across state lines was recently reduced from 21 to 18. Currently, with the hours of service required for most drivers, fatigue and distracted driving have become more common issues.
3. Vehicle Repairs
Vehicle mechanics are amongst one of the many professions experiencing staffing issues. This equates to longer repair timelines and increased labor costs. The prices of auto parts have also increased, and supply chain issues further drive the difficult nature of obtaining them. The advancements in vehicle technology have led to many benefits, like providing better insight and early warnings into necessary repairs. However, with more technology comes more expensive pieces to repair. The shortage of rental vehicles also means that those looking to get back on the road throughout scheduled maintenance or repairs, likely cannot.