Transportation risks affect just about every industry, but God must love California contractors because He has blessed them with more “learning opportunities” than any contractors anywhere else in the country.
Some of the challenges are shared everywhere, including:
- Driver shortages are challenging supply chains
- Product delivery and availability of services, as 2018 experienced 20-year high freight demands. From distributors to manufacturers, the need is expected to remain strong.
- New equipment with new technologies for emissions and safety that are jacking up the price.
On top of those issues, for California construction companies, each of which is a trucking company in disguise, the situation could only be described as a nightmare of regulations. Just for starters, there are the California Air Resources Board (CARB) air quality rules for on-road and off-road heavy-duty diesel equipment. You must keep up with this ever-tightening regulatory constriction or lose your ability to haul your equipment, products and supplies—an eventuality that puts you in the pot competing with all the other freight consumers.
Then there all the other agencies—the Department of Industrial Relations wants you to pay for a license to be allowed to bid on public works projects. The State Water Resources Board (SWRCB) requires you to submit detailed plans of how your construction will not affect the “waters of the state,” prepared by your certified water quality planning specialist or a consultant with the necessary credentials. There is the Contractors State License Board, the Department of Insurance, the California Wildlife Conservation Board and, of course, the Board of Equal ization—alifornia’s “Taxman,” as the Beatles would say.
Lately, and this brings it back around to your trucks, the Department of Motor Vehicles (DMV) is now working hand-inglove with CARB to make sure every truck registered in the state shows proof of compliance with the air rules. So far in this process, DMV and CARB have unearthed 80,000 non-compliant trucks, which means you lose your legal use of those trucks until you fix them, sell them or destroy them. That new wrinkle technically goes into full effect in 2020, but the agencies are getting a headstart on their “processes.”
The State Is Going to Pot
The legalization of pot in California brings with it the challenge substance abuse is an increasing issue. Acollateral issue, distracted driving, continues to plague commercial fleets. The burden of participation in substance abuse testing programs and their supervisors are required to have “reasonable suspicion” training.
Business and commercial vehicle insurers have seen success in improving safety performance with fleets that embrace telematics technologies. These include electronic logging devices (ELD’s), vehicle tracking systems that identify at-risk driver behaviors and video event recorders.
When it comes to construction, these issues and a few more will challenge the industry. Here’s a look at three construction transportation issues that you’ll want to keep on your radar:
- Construction drivers are busier and more distracted. Construction is booming – which means contractors are short on equipment and drivers. The result is an increase in claims involving vehicle incidents. We have seen several critical crashes involving less experienced drivers and distracted drivers that are trying to multitask behind the wheel. We have also witnessed an increase in load securement issues, including driver fatalities dues to drivers not taking the time to properly secure their loads.
- Contractors and DOT compliance. As the demand for construction continues to increase through 2019, contractors will widen their operations and look to once again increase the size of their commercial vehicle fleets. Many construction fleets now realize that several regulations they once thought only applied to traditional truck fleets also apply to their operations so they must either use their resources or outside vendors for compliance activities.
- Vehicle safety technologies. As construction fleets grow and need to purchase new vehicles, the opportunity exists to purchase new safety systems. These include automatic braking, antirollover technology and lane departure alert systems as well as air disc brakes.
While expensive, this technology is very reasonable in cost compared to average claim costs on commercial vehicles—now over $10,000. When we do stories like this, we often feel like Stan Laural waiting for the punch line from Oliver Hardy: “Well, here’s another nice mess you’ve gotten me into!” We promise to look for more cheerful news next month.