The North Carolina Trucking Association recently held its annual management conference in Asheville, North Carolina. In general, the trucking and transportation industries face many challenges, such as interstate regulation, multi-state tax, financial solvency, merger and acquisition, capital asset acquisition, employment hiring and retention issues.
While the discussion and presentations led to many areas of focus, several themes did emerge. A summary of the top three topics is shared below, as reported by Milton Howell, DMJ’s Director of Tax Services, who was also in attendance.
- Driver Issues
- The trucking industry holds a 75% annual turnover rate among drivers. In spite of that, it is important to monitor and counsel problem drivers and let them go if necessary. The liability for retaining problem drivers is just too high.
- There are many technology solutions available to monitor the driver’s actions. These applications track hard braking, speeding, and video inputs. If you collect this data, are you using it to evaluate the driver? Failure to analyze the information that is being gathered could expose the company if there is a court action.
- Eighty percent of accidents happen to drivers that have been with a company for less than six months. This makes an evaluation of new drivers and efforts to retain seasoned drivers especially important.
- Trends in Litigation
- More and more plaintiff attorneys in truck accidents are willing to invest the time and risk for the “home run” verdict. They will carefully prepare, look for every angle, and are more technologically savvy. They are likely to have more specific knowledge about trucking issues.
- Be concerned that your insurer-provided defense attorney isn’t working as hard in comparison, and treats your case like a $5,000 settlement matter.
- The main serious injuries in huge cases are burns and traumatic brain injuries.
- In court, plaintiff attorneys are issuing subpoenas to the driver’s prior employers, and finding out better and more detailed data than was available when you hired them. They will ask the question, “Did the driver have a bad record in the past?” despite the fact that this information was not at your disposal.
- Defense attorneys are seeing more drivers fail the post-accident drug testing. Required testing under the Department of Transportation and other guidelines do not test for everything. Many synthetics will not trigger a positive result under basic testing and drivers are telling each other how to circumvent the routine testing systems.
- Typical road insurance liability coverage cost is increasing 30%.
- Freight rates have been steady. Recent low fuel savings have offset the higher insurance cost for the operators. Trucking companies need to worry that this dynamic may not continue into the future. Thus, be careful about entering into long-term contracts based on this model.
- Be careful about letting other companies and their employees pull your trailers. Their experience may negatively impact your insurance ratings and you may not have the coverage that you expect. If this needs to happen under your business model, make sure that you know what coverage you have and how it affects your insurance arrangements.
DMJ’s attendance at the 2017 NC Trucking Association Conference demonstrates our continuing commitment to the success and support of the trucking and transportation industry. As a North Carolina CPA and business consulting firm, DMJ welcomes complex or introductory engagements from small locally-owned businesses to multi-state carriers. We view the issues they face not as a problem, but as a challenge.
We look forward to any opportunities in which we can further assist.