Insurance and equipment costs squeezing out fleets, report says

These factors, paired with a sustained “Great Freight Recession,” have been too much of a burden, forcing several trucking companies to call it quits.

In late July, Florida-based Caroll Fulmer Logistics, a carrier that oversaw 400 trucks and 1,700 trailers (a mix of owned and rentals), closed down after 71 years of operation. The family-run business has been assailed by six to eight personal injury lawsuits.

“Many of these lawsuits are bogus, meaning that no injury actually occurred, but we still have to fight them, and that takes a lot of money,” Phillip Fulmer, the founder’s son and one of the company’s partners, told Clermont Sun after the carrier announced the decision. “These payments cause people to lose jobs and businesses to close, and insurance rates to increase for everyone.”

Florida is, however, one state that has actively tried to improve the litigation landscape with tort reform. Legislation passed in 2023 makes it so plaintiffs with +50% fault can’t recover damages, cuts the statute of limitations in half to two years, and provides insurers with a 90-day grace period for bad faith claims.

But for trucking families like the Fulmers, the damage has already been done.

“We can’t carry on,” Fulmer said. “It’s tiring and it’s draining fighting all the time. Sadly, we’ve had enough. I know I can’t deal with this anymore.”

Amwins noted that the rising insurance limit requirement of $1.5 million has increased the barrier to entry for new carriers in states such as New York, California, Texas, and Illinois, while in New Jersey, the firm said that new entrants are “essentially non-existent.” In the Southeast region, underwriters are also less likely to take on businesses with fewer than five years of experience.

That may change, as Georgia has joined Florida in reforming tort law.

These non-value-add costs have forced some fleets to shrink rather than grow. “Insureds will continue to reduce both the number of units and drivers due to the increase in cost,” the report predicted.

The pressure is most pronounced in operations with unusual or high-risk exposure, or those that fall under Excess and Surplus (E&S) specialty classes. These include:

The report said these fleets face heightened scrutiny, making coverage limited or cost-prohibitive. Hired and non-owned auto liability has also become a sticking point, with many insurers reluctant to offer it at all.

Overall, the tightening marketplace requires business agility and “deep specialization and creative placement strategies,” said Zach Bowling, EVP at Amwins Brokerage.

Amwins’ solutions include its portfolio of data and analytics offerings, called Amwins DNA, along with leveraging its extensive market relationships. These help carriers and brokers “access capacity while exploring alternative risk solutions and safety-focused strategies that resonate with underwriters,” said Tracy Andrews, VP at Amwins Brokerage.

Adopting dash cams and keeping meticulous maintenance records are proven ways to fight lawsuits and potential nuclear verdicts, but the fact is, bad actors in trucking have increased the insurance burden for everyone.

This all means that trucking companies need to make up for the uncontrollable costs, like rising premiums, by finding ways to lower fuel costs and unexpected maintenance costs, such as roadside emergency events. For the latter, it doesn’t cost anything but time to review your drivers’ pre-trip workflow to ensure it's easy to follow, and whether you use paper or digital DVIRs, issues are addressed promptly by the right people.

As for avoiding tariffs and new truck costs, the auction market is a source of plenty of diamonds in the rough just waiting for a new owner to polish. And in some cases, it could be more beneficial to overhaul an engine versus buying a new one.

Finally and most importantly, remain consistent with preventive maintenance and inspections.

“A thorough inspection catches any potential issues before they become costly problems,” Nick Richardson, Blaine Brothers trailer service manager, told Fleet Maintenance. 

And even though it is still August, it’s never too early to start planning when to start winterizing the fleet.

Richardson advised that techs check and service the charging and electrical systems, inspect the differential fluid, and address moisture in the air system by servicing the air dryer. He also said to “check the block heater, test battery performance, and ensure coolant protection is sufficient.”

It’s a never-ending battle, and as Fulmer said, it's "draining,” but tariffs, recessions, and insurance problems are all, for the most part, cyclical in nature. They come and go, but proper maintenance will ensure you are in it for the long haul.