?? Driving Up Insurance Costs

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In today's newsletter, we dive into how cargo theft has caused insurance rates for carriers and brokers to surge. Plus, an Illinois-based trucking company has filed for bankruptcy, Outrider raises $62M for autonomous yard operations, and at 9 a.m. CT today, we’re releasing an exclusive interview with the CEO & Founder of Carrier411.

??Question of the Day: Truck drivers in Mexico earn an average monthly salary of $___ in Q2 2024. Find the answer towards the bottom of the newsletter.

*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.

?? WHAT’S COOKIN’ IN FREIGHT

?? AI-Powered Detection Reduces Drowsy Driving. Drowsy driving poses significant safety risks, linked to thousands of crashes and hundreds of deaths annually. To combat this, fleet managers are adopting a new AI-driven technology Samsara’s Drowsiness Detection, now launched industry-wide after successful testing with 50 early adopters. The tool, trained on tons of data, identifies driver fatigue with a 77% success rate. If detected, tired drivers are discouraged from hitting the road. Reports from trucking firms show improvements in driver alertness, with some companies seeing no fatigue-related incidents for over a month. “We used to have multiple drivers falling asleep at the wheel. Now, we’ve gone as long as 30 days without a single driver falling asleep due to these alerts,” said a source at a large US oilfield service, according to Samsara’s company release.

?? Mighty Move Transportation Files for Bankruptcy. Mighty Move Transportation, a Dolton, Illinois-based trucking company, recently filed for Chapter 7 bankruptcy, citing assets under $50,000 and debts between $500,000 and $1 million. The five-year-old company, which once managed 70 trucks and 75 drivers, faces two breach-of-contract lawsuits from Apollo Funding and DMKA LLC. CEO Charles W. Sanders also filed for Chapter 13, hoping to pay down his debts over a period of time if approved. Mighty Move's gross revenues reached $4.5 million in 2023, yet financial strain led to this liquidation move. Meetings for creditors in both cases are scheduled for November and December.

?? Outrider Secures $62M to Scale Autonomous Yard Operations. Outrider, an autonomous truck company, has raised $62 million in a Series D round led by Koch Disruptive Technologies and New Enterprise Associates, with support from notable investors like NVIDIA’s NVentures and ARK Invest. The funds will drive Outrider's 2025 scale-up of its yard-automation services for major Fortune 500 clients, solidifying its role in logistics automation. Outrider’s technology, featuring proprietary AI and a robotic arm for trailer connections, reduces manual labor risks and enhances efficiency. Byron Knight, President of Koch Disruptive Technologies, is “thrilled” with Outrider and plans to continue to “support” their continued growth.

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Cargo Theft Is Driving Up Insurance Costs: What Carriers and Brokers Need to Know

Cargo theft is on the rise, and it’s hitting carriers right where it hurts – in their wallets.

With organized crime and tech-savvy theft tactics, premiums for cargo insurance are spiking, as detailed in a report from Transport Topics.

Carriers across the board are feeling the squeeze.

Let's break down what’s causing these hikes and how it’s affecting carriers and brokers.

Why Insurance Rates Are Climbing

Cargo theft is no longer a low-cost crime. Scott Dickinson of TrueNorth Cos., an insurance brokerage, shared, “On average, rates have risen by 8%-12%, but for companies with poor loss histories, this can soar to 20-30% or more.” Smaller carriers with limited budgets are getting hit the hardest.

• Premium hikes: Average increases range from 8-12%, but bad loss records can drive this up to 20% or more.
• Small carriers at risk: One big loss can have a lasting impact, making it hard to stay profitable.

"We’re seeing a trend toward higher deductibles for all motor carriers and freight brokers," Dickinson added.

New Tricks for Old Crimes

Gone are the days of “stolen off the back of a truck” clichés. Today’s cargo thieves are organized and using tech to hijack shipments. Jason Odgers from World Insurance points out that thieves are hacking into load boards, posing as legit companies, and re-routing shipments.

• High-tech tactics: Thieves spoof phone numbers, hack into systems, and assign fake destinations to reroute cargo.
• Prime targets: Electronics, cars, and other high-value goods are often on the hit list, making them costly to insure.

Complicated Coverage Policies

Cargo insurance has gotten tricky. Coverage isn’t just a one-size-fits-all; it’s split into different policies for carriers and shippers. Odgers explained that many shippers don’t realize they need their own policies. There are also more conditions – like no coverage if the load is left unattended, and requirements for GPS tracking or secure parking at night.

• Bigger deductibles: Nick Saeger from Sentry Insurance said carriers now face higher deductibles on items prone to theft, meaning they have more “skin in the game” to prevent theft.

The Numbers Don’t Lie – Cargo Theft Isn't Slowing

The TIA’s 2024 Fraud Report shows cargo theft skyrocketing – up 600% in just six months between November 2022 and March 2023. Theft hot spots include California, Texas, and Illinois.

To fight back, companies are turning to GPS trackers, better employee training, and working with law enforcement. But recovery rates are low; only 8-12% of stolen goods are found.

Impact on Brokers: The Price of Fraud and Bonding Costs

Freight brokers are also getting caught in the crossfire. As cargo theft and fraud rise, brokers have been hit with massive hikes in surety bond costs – something we reported back in April.

• Surety Bond Costs: Brokers are now facing double or even triple the bond costs due to increased fraud risk.
• Increased Scrutiny: Some brokers are having to tighten their vetting processes and invest in better fraud prevention to keep their bond costs manageable.

Bottom Line: Higher premiums and bigger risks mean both carriers and brokers have to make tough choices. Either invest in security and fraud prevention or pay the price with rising insurance and bonding costs.

As Dickinson put it, “The burden of preventing theft now lies as much on carriers as on insurers. For some, these high premiums might be the tipping point.”

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?? AROUND THE FREIGHT WEB

?? Trucking Trouble. Polk County, Tennessee faces congestion, accidents, and road damage as freight trucks divert to Highway 30 post-Hurricane Helene, frustrating residents impacted by increased 18-wheeler traffic.

?? Labor Talks. The ILA and USMX will restart contract negotiations in November focusing on issues like the use of automation as well as jurisdiction protection, healthcare benefits, and container royalties.

?? Saia Growth. Saia sees record high third-quarter revenue growth of $92.7 million as new terminals and direct service to all contiguous 48 states helped strengthen the company's business.

?? Bribery Scheme. Alexsander Barsukov must pay $8.1 million after a decade-long bribery scheme involving fraudulent contracts with FedEx. His company (Salt Lake Trucking Group) was paid roughly $108 million by FedEx over the 10 year span.

?? Red Sea Conflict. A report claims Russia aided Houthi forces in recent Red Sea attacks by relaying targeting data received from Iran to the Houthi rebels.

?? Salary in Mexico. Truck drivers in Mexico earn an average monthly salary of $423 in Q2 2024. This is an increase of 8.4% YoY when the average wage was $390 a month.

?? THE FREIGHT CAVIAR CORNER

• Conferences: F3 Future of Freight Festival, November 19-21 in Chattanooga. Get $1395 off with our special link!
• Freight Jobs: Find the latest freight job listings here.
• Find Shippers Fast: Looking for customers? Check out ShipperCRM, the world's largest shipper database, and create an account.
• Podcast: At 9 a.m. CT today, we’re releasing an exclusive interview with Darren Brewer, CEO & Founder of Carrier411.

FREIGHT MEME OF THE DAY