Trucking goes high-tech

United Brokers capitalizes on tech advances in trucking industry

By Phil Zinkewicz

In the 1940 Hollywood melodrama “They Drive by Night,” Humphrey Bogart and George Raft play seat-of-the-pants truck-driving brothers negotiating their vehicle over mountainous and unlit roads, day and night at dangerous speeds to get their produce to market before their competitors. Their goal is to earn enough money and establish a good enough reputation so that they can build their own trucking firm, with many trucks and many drivers. Their hopes are dashed, however, when Bogie, tired from lack of sleep, accidentally drives off the side of a mountain road, destroying their truck and crippling himself.

The rest of the film deals with treachery, murder and mayhem. Nevertheless, on that one level, the film is an accurate representation of the trucking industry of those times, when safety took a back seat to getting goods to market before competitors. Today, however, the trucking industry has changed significantly for the better; and driving those changes are new technologies.

How many of us have driven down the highway, frozen in fear as we are sandwiched between two semis? If we knew about the new technologies contained in those semis, we would probably not be so fearful. Because of those new technologies, since 1988 the trucking accident rate has decreased by almost 50%, and only 5% of all motor vehicle accidents involved trucks, according to the American Trucking Association (ATA). Of all accidents involving trucks, the truck driver was found at fault in only 24% of the cases.

Anthony R. Glotzbach, president of the New Albany, Indiana-based United Brokers, Inc., along with his staff, knows all about those new technologies and how they have affected the transportation industry for the better.

United Brokers was established in 1983 as a general commercial lines retail agency. In just two years, the firm began its metamorphosis into a managing general agency (MGA), specializing in the transportation industry. Today, fully 70% its business is in the transportation arena.

United Brokers has penetrated major markets in Kentucky, Indiana, Tennessee and Ohio; and recently it became a division of R. W. Scobie, a 75-year-old MGA, which has resulted in United Brokers’ expansion throughout the Midwest.

Glotzbach believes that the trucking industry is on the verge of some boom years and, with the assistance of the insurance industry, can capitalize even further on those opportunities. “If you wear it, eat it or use it in any way, there will have to be trucks to deliver it,” he says.

“According to Greg Fulton, president of the Colorado Motor Carriers Association and frequent speaker before AAMGA educational forums, the volume of freight moved by trucks is expected to increase 64% over the next eight years,” says Glotzbach. “The weight tonnage of trucks is expected to increase by 33% over the next 12 years, and the overall size of trucks will cause an increased need for new drivers.”

Moreover, Glotzbach emphasizes that new technologies in the trucking industry will lead to increased efficiency for trucking companies and improved underwriting results for insurers. The result will be increased profits for the insurance carrier and decreased insurance premiums for the insured. “We are not going to run away from that; rather, we embrace it,” he says. “The best way to make money in the trucking insurance industry is to recognize that those who use the new technologies to the fullest will become the best insurance risks. It’s a win-win deal.”

Stay in your lane

Amy Zettel, vice president of marketing at United Brokers, says that new technologies are rapidly being developed and implemented by responsible trucking fleets. “Some equipment is intended to prevent accidents, while others are aimed at improving a trucking company’s ability to effectively manage its fleet,” she says.

“The newest technology for accident prevention includes lane departure warning systems and anti-roll devices. Lane Departure Warning (LDW) is in reality a second set of eyes, always alert and focused on the road,” Zettel continues. “These systems are designed to prevent sideswiping, running off the road and lane change accidents caused by fatigue and inattention. Since fatigue is the number one cause of trucking accidents, the presence of an electronic or virtual navigator will have a tremendous effect on accident frequency.”

Kelly Reynolds, senior underwriter, points out that drivers have reported that LDWs are of great help in low-visibility conditions, and more than 96% of drivers approve of the equipment. For one trucking company insured by United Brokers, implementation of LDWs in half of its fleet resulted in a 50% decrease in accidents caused by lane changes. None of the drivers operating units with LDWs received citations for improper passing or lane change over the course of the two-year trial period, according to Reynolds.

“The insured is proceeding with implementation on the rest of its fleet,” she says. “I can tell you that these results made a significant impact on the trucking company’s insurance premiums.”

In addition to equipment targeted to improve the safety of trucking fleets, many trucking companies are using speed governors and on-board GPS units.

Believe it or not, speed governors have been in use since 1769 (before the invention of automobiles, governors were used on various types of equipment containing wheels).

“All European equipment has, by law, governors set at 56 miles per hour, according to the ATA. Other than fatigue, driving too fast was cited as the leading cause of critical accidents caused by trucks,” Reynolds explains. “Sixty-three percent of truckers in the U.S. use speed governors, generally set at 68 m.p.h., the ATA reports. Those companies that don’t use governors say that they strain their relationships with drivers if they use the technology. Here is where education is needed in order to establish priorities that are in the best interest of the driver, the trucking company and the insurance carrier. More work needs to be done here.”

Perhaps the newest technology on the trucking scene is on-board GPS units, says Tony Glotzbach. “This is a tool that greatly improves the management of the trucking fleet by tracking the speed, stopping distances, stopping or rest times and mileage of every truck. Imagine the possible uses of this information.

“Problem drivers can be discovered immediately and managers can implement additional tracking measures or take corrective action before an accident occurs,” he explains. “The mileage information can be downloaded right into fuel tax reports. That means no more errors or time-consuming report completion. Also, drivers that are not complying with hours of service regulations can be detected before the insured’s out-of-service rankings become a problem.”

Bryan Glotzbach, vice president of underwriting at United Brokers and Tony’s son, adds: “All of these tools will increase the efficiency of the management of trucking fleets and can also result in ease of writing trucking insurance. Imagine if all of this information were used in the underwriting of a risk. We could easily determine the best carriers and reward them for their performance and could help those with problem areas by providing appropriate loss prevention programs.”

New drivers needed

One of the challenges facing the trucking industry, according to Tony Glotzbach, is the dwindling pool of drivers. According to the ATA, the long-haul segment of the trucking industry currently has a 20,000-driver deficit. The ATA predicts this number will increase to 111,000 by 2014. Part of the reason for the decline is the fact that the current driving pool is getting older and nearing retirement, says Glotzbach.

“We at United Brokers believe the insurance industry can attack this problem by providing the means of attracting and training new drivers to keep up with the demand. My father was a truck driver for 37 years,” says Glotzbach, “and was accident free. He ran a daily route from Louisville, Kentucky, and delivered freight to rural towns in Indiana as a one-man operation. He always felt he could not find drivers who could ‘do it as well as he did.’ He learned trucking by on-the-job training.

“But today things are very different,” Glotzbach observes. “It’s the trucking company’s job to maintain driver quality and integrity and provide the means of training new drivers as they are brought on board. United Brokers, for example, can insure truck driving schools. As the need for drivers continues to rise, more truck driving schools will be needed, and we have the markets available to insure these risks. In addition to this training, the trucking industry will most certainly endeavor to improve the working environment by getting the drivers home at night, increasing benefits and offering wellness programs to keep the drivers healthy,” he says.

Finally, Glotzbach addresses what United Brokers offers its agency network in terms of servicing the trucking industry. He says his firm offers an array of products for agents to market to the trucking industry throughout the Midwest.

“We offer online quoting for more than 10 classes of business, including physical damage, nontrucking/bobtail liability and motor truck cargo. We can quote and bind online in minutes,” he says. “In addition, our turnaround time on quotes and policy issuance is less than 48 hours for 90% of risks. Our executive agent center also offers the ability to download forms, policies and endorsements, order loss runs, report losses and a great deal more.”

Glotzbach continues: “Our overall philosophy is based on the three-legged stool concept. The first leg represents our intent to meet or exceed the expectations of the customer; the second is to meet or exceed the expectations of employees; and the third is to recognize the financial needs of the organization. Our goal is to balance the stool. If we fall short in any one of those areas, we are out of balance. Also, I follow the dictum: ‘Good is the enemy of being great.’ It’s our goal that the R.W. Scobie Company will become a great company.” *

For more information:
United Brokers, Inc.
Web site: www.ubinc.com