ATRI's 10 critical trucking industry challenges from 2022

There is a myriad of exposures that can impact a motor carrier's drivers and bottom line. To ensure the safety of drivers as well as
the continued success of a fleet, it's critical to reflect on the most pressing issues affecting the trucking industry on a regular basis.
To aid in this process, the American Transportation Research Institute (ATRI) recently published a report, Critical Issues in the
Trucking Industry - 2022, highlighting the major challenges motor carriers across the country faced in 2022.

With the help of key stakeholder groups, ATRI compiled a comprehensive list cataloging 28 of today's most pressing trucking
challenges. This list was presented to over 25,000 industry contacts, and respondents were asked to select and rank the issues
impacting their fleet the most. Beginning with the most critical issues, this year's results were as follows:

  1. Fuel prices
  2. Driver shortage
  3. Truck parking
  4. Driver compensation
  5. Economy
  6. Detention/delay at customer facilities
  7. Driver retention
  8. Compliance, safety, accountability
  9. Speed limiters
  10. Lawsuit abuse reform

As part of the report, ATRI also highlighted potential strategies to address these issues, and survey respondents were asked to rank them based on how effective they believed they would be. For example, in response to record-high fuel prices, a popular proposed action was to stabilize the nation's fuel supply through federal action.

ATRI's report can be particularly useful for organizations when it comes to identifying risks they may not have otherwise considered. Additionally, given that the report includes suggested solutions to industry challenges, motor carriers have a variety of potential policies they can implement to safeguard their fleet.

For more risk management guidance, contact Witkemper Insurance Group and Financial Services today.

Essential cybersecurity controls for organizations

Organizations continue to be at risk for cyber incidents. A comprehensive cybersecurity plan is critical to ensure your company data is protected by uncovering vulnerabilities and fixing potential risks. The infographic below outlines recommendations that could prevent cyber incidents. 


Product Recalls on the Rise

The number of product recalls reached a 20-year high in the third quarter of 2022, according to the U.S. product recall index released by Sedgwick Claims Services Management Inc. Across the five industries tracked in the index, 1.22 billion product units have been involved in recalls, up from the previous record set in 2018 of 1.20 billion.

There are several reasons why regulators issued more recalls in 2022. For instance, the Food Safety Modernization Act of 2011 gave regulators more oversight of different food and products, and new technology, including artificial intelligence tools, allowed regulators to identify potential harms sooner. In addition, ongoing effects from the COVID-19 pandemic, such as increased employee turnover and staff shortages, increased the chance for human error.

Third Quarter Highlights

The driving factor behind the record-breaking number was the increases in the average recall size for the pharmaceutical and medical device industries, both of which saw their average recall size increase by more than 500%. While medical device recalls decreased in the third quarter of 2022, the number of units impacted increased by 411%. Similarly, pharmaceutical recalls fell 13.8% in the third quarter, but the industry saw 107.2 million units impacted.

Other highlights from the third quarter recall data include:

Mitigating Product Recalls

As manufacturers continue to face challenges relating to regulatory activity, ongoing geopolitical issues, supply chain disruptions, and an uncertain economic future, it’s important for organizations to take the following steps to reduce the threat of a product recall:

As the number of products recalled continues to increase, organizations must be proactive in reducing their risk. Contact us today for more risk management guidance.


The dangers of presenteeism

Presenteeism in the workplace occurs when an employee comes to work despite feeling tired or unwell, considerably reducing their productivity. This problem is especially common among remote or hybrid employees, as they are more likely to not feel the need to take sick leave when they’re feeling unwell. It is also common among older workers, workers suffering from insomnia or mental health issues (e.g., anxiety and depression), and those with unhealthy lifestyles.

Presenteeism is often caused by poor workplace culture. Employees who fear losing their job or missing out on career opportunities are more likely to come to work or refuse to take paid time off when they feel unwell. This is particularly true when employees feel their work can’t be easily transferred or covered without consequences to quality, completion times, or interpersonal relationships.

According to the Institution of Occupational Safety and Health, presenteeism can lead to the following issues in workers:

Furthermore, presenteeism can increase the risk of near-misses and accidents on the job—thus posing significant workplace safety concerns. To avoid presenteeism, consider the following tips:

Consult your supervisor for more information on the dangers of presenteeism.

Electric vehicles present new insurance challenges

Electric vehicles (EVs) continue to gain traction in the U.S. auto market. Last year, Americans bought nearly 450,000 EVs—an 83% jump over 2020. With many federal and state governments pushing for lower CO2 roadway emissions, EV demand is expected to soar during the next decade.

This has commercial fleet owners wondering what a world without gas- and diesel-powered vehicles might look like, particularly when it comes to the potential exposures EVs could create.

Unique EV Risks

Because EVs tend to cost more than standard automobiles, their insurance rates are usually higher. However, other factors unique to EVs could also make insuring them costlier. Such factors include:

While uncertainty about new EV technologies will likely drive up insurance premiums initially, expectations are that prices will stabilize over the long term. Meanwhile, several other concerns will need to be addressed before EVs become scalable. These include the following:

Scarcity of repair shops and parts—Very few auto shops can handle EV repairs, so it may be difficult to find timely service. Further, shops that do fix EVs often have trouble locating parts.
Although it probably won’t happen overnight, EVs seem positioned to dominate roadways sometime in the near future. Commercial fleet owners who start thinking about EV insurance challenges today will be better positioned to thrive in a post-fossil-fuel landscape.

How small businesses can prepare for a recession

A recession is a prolonged and pervasive reduction in economic activity. Generally speaking, multiple successive quarters of negative growth in gross domestic product—a monetary calculation of the market value of goods and services generated and sold during a set time period within a given country—constitute a recession.

A recession can last for several months or years. Furthermore, recovering from this state to the nation’s previous economic peak can take years, even after a recession ends. Because a recession typically results in diminished economic output, lowered consumer demand and a drop in employment, such a downturn can present various challenges for organizations across industry lines—especially small businesses.

Although organizations can’t prevent a recession from happening, they can take steps to limit its ramifications and maintain financial stability. This article provides more information regarding how a recession impacts small businesses and what these businesses can do to adequately prepare for an economic downturn.

How a Recession Impacts Small Businesses

Amid a recession, organizations of all sizes and sectors usually experience decreased sales and profits stemming from changing consumer behaviors. An economic downturn may also limit organizations’ credit capabilities and reduce their overall cash flow as customers take more time to pay for products and services.

While these behaviors can threaten the financial stability of any organization, large businesses are often better positioned to weather a recession because of their substantial revenues, excess reserves and privileged access to a wider range of credit markets. Small businesses, on the other hand, may be particularly vulnerable during an economic downturn, as they generally lack the additional capital necessary to offset extended periods of loss. As a result, when a recession occurs, small businesses are more likely to have to make difficult financial decisions to avoid issues such as insolvency or bankruptcy. Primarily, these businesses may need to cut operational costs and consider staff reductions to stay afloat.

Financial media website Investopedia reported that nearly 1.8 million small businesses closed their doors amid the last major U.S. economic downturn, known as the Great Recession, which took place between 2007 and 2009. Looking ahead, a recent survey conducted by investment banking company Goldman Sachs found that the vast majority (93%) of small businesses fear the nation will enter another recession in the coming months. With this in mind, now is the time for such businesses to prepare for an economic downturn.

Tips to Prepare for a Recession

To promote financial stability during an economic downturn, small businesses should consider the following recession-proofing tips:

Establish a financial plan. It’s critical to closely monitor current economic conditions and form a plan for remaining profitable amid a recession, whether this entails adjusting specific business practices or scaling back certain operations. Having such a plan in place will help eliminate unnecessary spending and highlight investment priorities.

  • Prioritize savings and cash flow. In addition to having a solid financial plan, building up reserves and maintaining a steady cash flow are key steps in successfully navigating an economic downturn. This may include limiting excess inventory, finding ways to reduce overhead expenses, implementing shorter payment terms for customers and even encouraging early or advance payment options.
  • Ensure proper debt management. While it may be tempting to pay off any debts in the face of a recession, doing so can rapidly deplete reserves and threaten long-term financial stability. Instead, it’s best to reassess interest rates on current debts and consider paying down debts with the highest rates first. If reserves are already low, utilizing additional financing options and establishing a line of credit may be useful. Yet, it’s always vital to carefully review potential costs before taking on new debt.
  • Be innovative. Frequently researching the economic climate and seeking ways to adapt business strategies in response to recession-related trends can promote innovation and operational success during challenging circumstances. For example, diversifying income streams by creating an online shopping platform to boost product sales or offering a new service to attract additional customers could prove valuable.
  • Stay transparent. An economic downturn impacts multiple parties. That’s why employees, customers and other stakeholders should be informed of shifting business strategies and associated decisions amid a recession. Open communication will help these parties understand the reasoning behind any changes, make them feel valued and provide them with a chance to share ideas they may have to increase financial stability.
  • Build strong relationships. Fostering connections with customers can help bolster company loyalty when an economic downturn strikes. Dedicated customers may also serve as effective ambassadors by sharing their satisfaction and bringing in new business. Additionally, building reliable connections with business partners and suppliers can ensure all parties will work together to safeguard operations and stay afloat during a recession.
  • Leverage effective marketing strategies. Even when an economic downturn is on the horizon, utilizing solid marketing practices should always be a top business priority. Specifically, crafting a unique brand and messaging techniques can make all the difference in attracting new customers and keeping profits up.
  • Maintain sufficient coverage. To ensure ample financial protection against potential losses, it’s crucial to have proper insurance. After all, business risks tend to rise amid a recession, making coverage increasingly important. Policies should be customized to address specific exposures. It’s best to consult qualified insurance professionals to determine particular coverage needs.
  • A recession can have serious impacts on small businesses. Fortunately, by adequately preparing for an economic downturn, these businesses will be better positioned to minimize financial hardships.For more risk management guidance, schedule a consultation with Witkemper Insurance Group and Financial Services.