Artificial Intelligence (AI) in the Transportation Industry: Potential New Risks

The commercial transportation industry has seen dramatic changes over the course of the past decades. The industry has adopted emerging technologies to improve safety and efficiency in operations. As part of a broad risk management strategy, technology represents a means of reducing risk exposures as a supplement to the protections of transportation insurance. One of the technologies receiving attention within the transportation sector is that of artificial intelligence, or AI. The relationship between AI and transportation is growing at exponential rates and has the potential to help companies manage risks better than ever before.

What is AI?

Artificial intelligence, or AI, is the concept that allows computers to make human-like decisions in solving problems. Sometimes referred to as machine intelligence or machine learning, AI technology has the ability to remember commands, respond to nuances in language, learn from experiences, and perform functions without direct input from humans.

Although the theoretical concept of AI has been around since the early days of the 20th century, it was not until computing technology was able to process complex commands that theory became reality. In the late 1950s, researchers were able to demonstrate the capabilities and promise of AI, and developments expanded rapidly throughout the 1970s and into today.

AI in the Transportation Industry

How is AI being incorporated into transportation industry operations? There are several promising applications in the transportation sector, including:

  • Autonomous or “self-driving” vehicles
  • Traffic and route management systems
  • Control over remote devices like drones
  • Life-saving systems aboard vehicles
  • Operational efficiency improvements in shipping, trucking, and rail transportation

The goal of incorporating this technology into transportation operations is to not only improve efficiencies, but to protect the lives and safety of employees, cargo, passengers, and business assets. In many ways, AI serves as an extension to the coverages of transportation insurance by reducing operational risks and their associated liabilities.

New Technologies, New Liabilities

Although AI has shown great promise in improving operational efficiency and safety within the transportation industry, the technology is not without its potential liabilities. In other words, while reducing certain risk exposures, AI may contribute to new risks. Any time new technologies are adopted, new liability exposures can emerge. For transportation, potential liabilities include:

  • Assigning responsibility in cases of traffic collisions, particularly when autonomous vehicles are involved. Who is liable in a crash caused by a vehicle without a human driver?
  • Data and cyber security risks, including data breaches or loss of sensitive business data.
  • Virtual hijacking, or the possibility that autonomous vehicles and AI-based systems can be compromised by hackers.

There are also unexpected or unforeseen risks, such as system-wide failures that lead to entire segments of the transportation sector to come to a stop. Imagine an AI-powered computer network managing a fleet of autonomous vehicles. Now imagine that network experiencing a critical hardware or software failure. Such a catastrophic failure could lead to vehicles losing control or becoming grounded. It could also lead to significant liabilities in terms of property damage, injury, and business interruption. Transportation insurance experts understand that new ways of thinking must be focused on the liability implications of AI. AI represents great promise, but insurance protections must also adapt to meet changing risks.

As AI technology matures, new applications will continue to be developed in all aspects of the commercial transportation industry. In the not-too-distant future, we may have fewer vehicle crashes, lower transportation costs, and more efficient traffic flows on our highways. Transportation industry players must balance the advantages of AI against liability risks. With transportation insurance protections and a better understanding of the advantages and risks of AI, companies can make more informed decisions about the future of their operations.

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.


Truckers Among High Priority Vaccine Deployment Group

America’s truckers are the lifeblood of commerce. As the coronavirus pandemic has tightened its hold on the U.S. economy, truckers are an essential component in delivering goods from manufacturing and production centers to end users. To help protect the nation’s trucking industry, a leading immunization advisory group placed truckers in the next priority group for COVID-19 vaccines. This move, coupled with the protection of comprehensive transportation insurance, helps to manage the risks truck drivers face in their daily operations.

Trucking Associations Weigh In

In mid-2020, the American Trucking Associations (ATA) and the Canadian Trucking Alliance began to voice concerns about vaccine prioritization in the commercial transportation industry. The ATA sent position letters to the White House, the National Governors Association, and the U.S. Centers for Disease Control and Prevention (CDC), arguing that as essential workers, truckers must be included among priority vaccination groups. Widespread infection with COVID-19 has affected workers in all corners of the country, including thousands of commercial vehicle operators. Based on their vital role in delivering not only goods, but the COVID-19 vaccines themselves, protecting truckers makes sense from economic and risk management perspectives. This move can only strengthen the protections of transportation insurance in the commercial trucking industry.

Phase 1b

The ATA’s concerns were addressed in December, 2020, when the Advisory Committee on Immunization Practices (ACIP) hosted a virtual public meeting to address vaccine prioritization recommendations. In a 13-to-1 vote, the committee, a group of experts from the CDC and other disease prevention agencies, recommended that truckers be placed Phase 1b of the COVID-19 vaccine deployment. Truckers join other essential workers in Phase 1b.

Final decisions on vaccine deployment are left to state authorities, but transportation industry analysts are confident truckers will gain this valuable protection once delivery of vaccines is made in the nationwide distribution rollout. The ACIP continues to study data from subsequent clinical trials in order to better prioritize vaccine distributions but stated that emergency action is needed to protect critical transportation workers.

Government Support for the Transportation Industry

Recognizing the vital role truckers play in restoring the U.S. economy, several other regulatory agencies have done their part. The most prominent of these is the U.S. Department of Transportation (USDOT), which has created hours-of-service regulation exemptions for trucking companies and their drivers. The exemptions apply to commercial drivers that provide direct emergency assistance.

The Federal Motor Carrier Safety Administration extended its own Emergency Declaration to ensure the efficient and speedy delivery of COVID-19 vaccines, medical supplies, and equipment needed to combat the pandemic. The Emergency Declaration, No. 2020-002, provides emergency relief from certain parts of the Title 49 Code of Federal Regulations, including rules governing empty vehicles and work break/rest requirements. By supporting the commercial trucking sector, federal and state regulators are helping to speed recovery while minimizing the burdens on truckers. These moves, coupled with vaccine prioritization and the protection of commercial transportation insurance, serve to provide a powerful risk management strategy for commercial vehicle companies and their operators.

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.


The Impacts of COVID-19 on the Trucking Industry

In 2020, the coronavirus pandemic dominated headlines around the world. COVID-19 affected all areas of commerce, including the transportation industry. Ever-shifting consumer demands, coupled with significant challenges associated in supply chains and driver personnel presented unforeseen risks to trucking operations. As a fundamental part of risk management, commercial transportation insurance helps to ease some of the financial impacts truckers face in the wake of COVID-19. Industry analysts suggest that the impacts of the pandemic on the trucking industry may continue to influence this critical commerce sector long into the future. Here’s how.

Consumer Demands and Supply Chain Interruptions: Symptoms of the Pandemic

Consumer demands shifted dramatically as a result of the pandemic. Certain essential commodities, including disinfectant products, medical supplies, and groceries experienced wild swings in demand; personal protective equipment like masks and gloves were also eagerly sought out by consumers. Manufacturers and producers are sometimes unable to keep up with those demands, and that weakness in the supply chain directly affected the transportation industry. Initially faced with too many truckers and not enough cargo, shipping rates plummeted. The “spot market”, which covers approximately 20% of the commercial freight-hauling industry in the United States, experienced an upheaval. This spot market is a system by which cargo is paired with available trucking operations; when cargo loads exceed available transportation options, shipping rates rise. With breaks in the supply chain caused by uneven consumer demands and failures in production, trucking companies saw a significant decline in rates, ultimately affecting their business continuity.

Infections in the Trucking Workforce

As the COVID-19 pandemic continued to spread across the country, a new risk exposure to the transportation industry was revealed: illnesses among truckers. COVID-19’s profound health effects grounded thousands of truckers, keeping them from contributing to the flow of consumer goods. In the early part of the pandemic, there were more truckers than available cargo loads. Increasing infection rates in most states took their toll on the transportation sector, and in some cases resulted in halting of trucking operations.

Regulators took note of the looming shortages in the trucking workforce, and made provisions to ease restrictions in an effort to get more truckers onto America’s roadways. One agency, the Federal Motor Carrier Safety Administration, waived certain licensing regulations for a three-month period, allowing those with a commercial learner’s permit to take to the road and reducing the staffing shortages faced by so many trucking operations.

Long-Range Effects on Trucking Operations

Not all of the effects of the coronavirus on the American transportation industry are negative. Some have had positive effects, and will influence trucking operations for years to come. One of the leading effects that has emerged in the pandemic has been that of widespread adoption of technology solutions to reduce physical contact between stakeholders. So-called “contactless” and paperless technologies like electronic bills of lading, payments, and virtual communications between trucking salespeople and vendors/manufacturers have served to protect truckers and end users from the potential spread of infection. They also help to streamline operations, reducing paperwork-related issues.

Trucking office management has also benefited from remote-work technologies such as video conferencing and virtual communications systems. Managers forced to work from home during the pandemic can easily remain in contact with vendors, employees, and contractors. Remote working has been shown to improve the work/life balance as well, and analysts from numerous industries suggest this solution will have long-ranging benefits far after the COVID-19 pandemic is past.

New driver onboarding procedures have seen significant changes due to the health risks associated with the coronavirus. Portions of new driver orientation operations have been moved to an online environment, reducing the costs associated with in-person orientation. Orientation sessions are streamlined as well, being able to be completed in less time and with less overhead. Still, there are certain advantages to in-person interaction, and many transportation industry companies are creating hybridized orientations with both virtual and in-person components.

It is expected that many of the changes being experienced in the trucking sector will remain long after the pandemic, as in addition to the health-protective benefits of adopting technologies and revamping procedures, the cost benefits far outweigh any potential drawbacks. These changes will drive down the costs associated with commercial transportation insurance claims and are a valid part of the post-pandemic risk management model. COVID-19 has been difficult for many in the transportation industry, but has served as a learning and growing experience for many forward-facing trucking firms.

About U.S. Risk

U.S. Risk, LLC. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.

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