- America’s 13 million trucks move 72.6% of all US freight, drive 327 billion miles every year, and generate $940 billion in gross annual revenue. Of the 750,000 active motor carriers and 3.54 million truck drivers in this country as of 2023, 95.8% operated 10 or fewer trucks and 99.7% operated 100 or fewer trucks.
- That said, the transportation market offers a number of unique challenges not faced by other business verticals. Nuclear verdicts, for example, tend to be a more significant challenge in transportation than in other industries due to the potential for crashes on the road and related litigation.
- But that is not the only risk factor facing the sector as of 2024.
Cargo Theft
- Just as retailers have to deal with theft in their stores, transportation carriers are increasingly having to address the potential loss of cargo directly from their trucks, whether it is true theft by a third party or even organized theft rings that are targeting certain types of goods and shippers.
- According to CargoNet, a cargo theft prevention and recovery network, incidents of cargo theft increased by 57% in 2023 compared to the year prior, and increased by another 10% in just the first quarter of 2024, with an average loss of more than $280,000 per shipment. California, Texas, and Illinois together account for 61% of all cargo theft cases. A congressional bill introduced in June, the Safeguarding Our Supply Chains Act, would create a federal task force addressing supply chain fraud and theft.
- Many insurance companies are forming their own investigative units to assist law enforcement in recovering stolen cargo. For insureds, on-time claims reporting can play a big role in recovery as well. The faster they begin the process of filing a claim the quicker their insurance company can start their loss mitigation investigation and reach a resolution.
Cyber Theft
According to a recent study, cyber attacks are growing exponentially within the transportation and shipping industry, with 101 data violations in 2023 alone. In fact, the number of cyber cases in transport was up more than 181% year-over-year, matching the number of cases from the previous 3 years combined. No other industry has seen such a large increase in attacks in recent years, with only financial services coming close with a 177% increase.
- Anything that’s easily disposed of like food, alcohol, meat, electronics, anything that they can quickly sell off that can’t really be tracked that easily. It’s a hot button issue in our industry and it’s certainly driving up the loss cost within that segment.
- The number of cyber cases in Transport was up more than 181% year-over-year, matching the number of cases from the previous 3 years combined. No other industry has seen such a large increase in attacks in recent years, with only financial services coming close with a 177% increase.
- Truckers are facing shrinking margins and rising insurance costs, and those firms that are able to implement these types of measures to improve their loss ratios and their CSA scores, which measure driver safety, are better positioned to unlock lower premiums and stronger insurance relationships.