Transportation
As the industry charts a new course, technology can help steer clear of obstacles.
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What to Expect in 2025
While not new, “nearshoring” will transform the supply chain in North America and open opportunities for the Canadian transportation industry. But other significant challenges — like changing independent contractor regulations, the ongoing driver shortage and sustainability costs — could make for a bumpy road in 2025. Companies that embrace data analytics and technology to drive their business strategy and operations forward will be better positioned to navigate the industry’s twists and turns.
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1
Profitability
Improved navigation on risky roads can help ensure profitability.
2
Vitality
Alternative benefits options can drive recruiting, retention and employee engagement.
3
Resiliency
Trekking through evolving regulations will require adaptability and tech tools.
4
Profitability
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Improved navigation on risky roads can help ensure profitability.
1 | Profitability
32,600:
The number of additional transport truck drivers employed in Q1 2024 as compared with Q1 2023.1
Alternative benefits options can drive recruiting, retention and employee engagement.
2 | Vitality
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Trekking through evolving regulations will require adaptability and tech tools.
3 | Resiliency
Slowing inflation, lower gas prices and rising demand for transportation services are fuelling modest growth in the transportation sector after several years of economic challenges. The industry remains cautiously optimistic as companies across North America must navigate high operational and labour costs.2
According to the HUB International 2025 Outlook Executive Survey3, there is room for both optimism and concern about future profits. More than half — 52% — of transportation industry respondents indicated they’re highly confident about performance and profitability in 2025. Yet these same leaders cited the following as most likely to adversely impact profits: government regulatory changes, increased expenses and geopolitical risks.
Some of those increased expenses come in the form of rising insurance costs. Twenty-nine percent of the companies surveyed acknowledged economic challenges and inflation have significantly impacted their ability to secure ample insurance coverage, and these challenges are likely to continue into 2025.
Commercial auto insurance is one of the most significant operational costs facing freight operators, with commercial auto losses continuing to be a problem for insurers who have responded with higher rates or by exiting the market altogether.
Most provinces reported that most auto coverages were not sustainable due to runaway repair costs and catastrophic losses.4 The situation is serious in Alberta, where a fixed rate cap has led several insurers to withdraw from the market completely.5 Transportation companies should expect additional premium increases through at least the beginning of 2025 as more carriers exit the market or reduce their liability limits, particularly for excess coverage.
Nearly three-quarters of respondents to the HUB survey indicated they don’t have enough insurance to protect against risks that could hurt profits. However, cutting coverage to reduce costs is not an option. Instead, fleet operators need to rely on insurance analytics tools that can pinpoint their greatest areas of risk and advise on the level of coverage needed.
The ongoing push to reduce the transportation industry's carbon footprint is also demanding significant investment by transportation companies. While costly up front, this investment can lead to cost savings later from improved efficiency, lower fuel costs and more last-mile delivery (LMD) opportunities. Companies that provide last-mile delivery services particularly need to demonstrate sustainability when bidding for new business. Partnering with an insurance broker who can analyze their telematics data and identify fuel costs and opportunities for conservation is key to achieving a competitive advantage.
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Maintaining a strong transportation workforce remains a critical issue for the industry. There were more than 3 million unfilled truck driver positions worldwide in 2023, and driver shortages are expected to worsen in the coming years.6
Providing comprehensive benefits solutions can differentiate employers in recruiting and retention. The massive acceleration in the use of data and analytics to manage costs and develop personalized benefits to retain drivers is emerging as a way to stand out from the competition. According to the HUB survey, 64% of transportation companies say benefits analytics are “significantly to extremely” important in formulating their benefits strategy. Clinical informatics can play a vital role in enabling companies to rethink their benefits strategy by predicting future health plan costs based on employee data.
Improving driver productivity, health and wellbeing are ongoing top priorities for transportation companies, but rising health insurance costs can stifle efforts to modernize benefits. With
truck drivers prone to suffering from chronic health conditions (i.e., obesity, cardiovascular issues and depression) due to long stretches of inactivity and isolation, transportation companies need to provide access to tools for improving physical and mental health, whether through personalized health coaching programs, apps or telehealth. A recent study shows the correlation between driver health and crash risk, causing further need to address the issue before it affects the company’s reputation and bottom line.7
When it comes to retirement benefits, 43% of transportation companies surveyed by HUB indicated they intend to request additional support from their plan providers to help them boost retirement plan participation to help improve overall employee satisfaction and financial wellness. Companies who invest in educating their employees on the importance of financial health and provide access to financial wellbeing platforms will reap rewards in recruitment and retention.
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Flexibility and adaptability will be key for transportation companies to stay resilient in 2025. Historically, the trucking industry has relied heavily on independent contractors to transport goods, with more than 350,000 drivers currently working as independent owners and operators, according to the Federal Motor Carrier Safety Administration (FMCSA).8
Trucking companies could face substantially higher costs if required to transition their current contractors to employees or fines if they don’t, while many independent owners and operators may decide to leave the industry rather than lose their autonomy.9
To continue working with independent contractors, companies will need to restructure their business model or switch to contract carriers. Both actions have significant legal, insurance and risk management implications.
At the same time, transportation businesses must also prepare for additional regulations aimed at improving the industry’s long-term sustainability. Environment Canada’s stricter emissions standards, announced at the end of 2023, require all new vehicles to be zero emissions by 2035.10
In 2025, the FMCSA may introduce several rule changes for the trucking industry, so cross-border drivers will need to pay attention to limits on large truck speeds, new regulations for electronic logging devices (ELDs) and requirements related to emergency braking systems.11
Transportation companies need an experienced broker to help them stay in compliance with ever-changing regulations and ensure they have the right coverage for current or emerging liabilities. Together with a best-in-class broker who has access to cutting-edge tools and deep carrier relationships, leveraging data from technology tools (such as telematics and GPS tracking) can help companies develop effective risk management strategies that will help them avoid regulatory headaches, nuclear verdicts, rising insurance rates and other threats to their long-term resiliency.
Case Study
By analyzing the telematics and claims data of a charter bus client who wanted to better understand their costs, HUB was able to identify four key routes that generated 70% of claims and only 3% of profits. HUB advised the client to remove these routes, which resulted in the company reducing their losses by 18% and lowering insurance costs by 22%.
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4 | Theme Name
Navigating Your Next Steps
HUB transportation insurance specialists will work with you to develop a tailored strategy for 2025.
1
Share your data.
Companies that share their data and analytics with their broker will reap benefits — not only will they have additional information to mitigate risk, but they can demonstrate a strong safety performance to carriers that can result in better terms and conditions.
Listen to your drivers.
2
Personalized benefits tailored to the needs of your drivers can help increase recruitment and retention. Find ways to connect drivers to benefits beyond health insurance, like providing access to personal insurance solutions, and create rewards programs to incentivize good driving behaviour.
Embracing cameras and telematics — and making the most of your data and analytics to reduce risk — will improve your company’s resiliency for the long haul. And integrating new technologies with traditional claims and first notice of loss system data will reap even greater rewards, increasing roadside safety and organizational efficiency.
Invest in technology.
3
Consistent communication with your broker will help identify and mitigate issues in advance of renewal and position the organization in the best light. Review exposures and insurance needs at least 90 days prior to policy renewal to allow your broker to find the optimal mix of coverage for your organization’s needs.
Be transparent with your broker.
4
Be Prepared
Download our 2025 Transportation Outlook and Insurance Market Rate Report to see what to expect in the coming year.
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Meet the Experts
Practice Leader & Chief Sales Officer
Transportation Practice
David Berno
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Practice Leader & Chief Strategy Officer
Lisa Paul
Transportation Practice
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Expert
Lee Sherback
Transportation Practice
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Risk Advisor
Shane LaClare
Transportation Practice
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HUB Transportation
When you partner with us, you’re at the centre of a vast network of experts who will help you reach your goals. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB transportation insurance specialist.
About Us
$1.84B
in commercial insurance premium brokered by HUB
24,000
transportation clients
57,000
insurance policies managed
Strategies for maintaining a safe and well-trained fleet of drivers
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Developing a data-driven incentive program for drivers
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Related Resources
3. HUB’s Outlook Executive Survey polled 900 C-Suite and VP-level executives on the issues facing them on profitability, employee vitality and organizational resilience.
4. Canadian Underwriter, “Why Canada’s auto line isn’t stable – or profitable,” July 23, 2024.
5. Insurance Business, “Insurers’ auto insurance appetite sinks amid Alberta rate cap,” August 6, 2024.
6. International Road Transport Union (IRU), “Global driver shortages: 2023 year in review,” December 21, 2023.
7. BMC Public Health, “Understanding health needs of professional truck drivers to inform health services: a pre-implementation qualitative study in a Canadian Province," October 10, 2024.
8. American Trucking Associations, “ATA Expresses Strong Support for Kiley-Cassidy Resolution to Protect Independent Contractors,” March 6, 2024.
9. American Transportation Research Institute, “Industry Costs Increased More than 6 Percent During Freight Recession,” June 25, 2024.
9. The Council of Insurance Agents & Brokers (CIAB), “Commercial Property/Casualty Market Index Q2/2024,” August 2024.
10. Environment Canada, “Canada’s Electric Vehicle Availability Standard (regulated targets for zero-emission vehicles),” accessed October 13, 2024.
11. International Road Transport Union (IRU), “Global driver shortages: 2023 year in review,” December 21, 2023.
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1. Trucking HR Canada, “Trucking HR Canada releases Q1 2024 labour market snapshot,” May 24, 2024.
2. American Transportation Research Institute, “Industry Costs Increased More Than 6 Percent During Freight Recession,” June 25, 2024.
64%
of transportation companies say benefits analytics are “significantly to extremely” important in formulating their benefits strategy.
0%
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0%
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2035:
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