Loss trends and emerging risks: Transportation

From distracted driving on busy highways to the explosive rise of quick e-commerce deliveries on city streets, the landscape of risk is rapidly shifting for the transportation sector. As part of Sovereign’s 2025 Q&A series, Kevin Dutchak, Senior Risk Specialist, Commercial Auto, provides insights into the key loss trends of 2024 and offers practical advice on how businesses can mitigate risks to protect their operations this year and beyond.

What were the loss trends and key exposures you saw in 2024?

Distracted driving is still a big issue and it’s becoming even more significant with the growing use of technology in the industry. Technology can be great, but it can also be distracting. For example, some drivers try to map out routes on the fly, and in the e-commerce delivery space, drivers are constantly looking at addresses along residential streets. These kinds of distractions may lead to a lot of loss incidents.

Additionally, traffic seems to get busier all the time. During rush hour and with ongoing construction, it’s like that old video game, Frogger, with drivers switching lanes back and forth, speeding, suddenly cutting in front of other drivers, and trying to get ahead of everyone. Statistics show that road travel continues to be the riskiest form of transportation, from property loss and minor fender benders to serious injuries and fatalities. When you add distracted driving and traffic congestion into the mix, it can increase the risk significantly.

Driver controls are another ongoing issue. For example, there are cases where drivers took short cuts to try to save time. But that winding two-lane highway with limited passing lanes, for instance, can put you more at risk, especially in winter conditions.

What emerging risks should businesses be aware of in 2025?

Climate change and severe weather events are becoming more of an issue for the transportation sector. We’re seeing more frequent storms and extreme temperatures, which can cause delays and put drivers in unsafe situations.

While cybercrime is becoming more of a risk in many industries, I don’t see much of that in trucking yet. But as more companies integrate artificial intelligence into their operations, they should ask what they’re doing to protect themselves so people can’t hack into that and use it to their advantage.

How can organizations effectively mitigate these risks?

When it comes to distracted driving, the key to mitigation is the constant reminder that driving is your job 100% of the time. You can’t afford to compartmentalize your thinking—you have to concentrate on the road because it’s such a fluid situation.

Sound defensive driving practices are also critical. I’m surprised at the number of fleets that don’t provide that training, assuming that because their drivers have a licence, they don’t need it. But despite our best efforts, we can all become complacent, distracted and forgetful. So, companies need to get the focus back on training. It’s an investment in your drivers that can pay dividends.

In terms of driver controls, trip management programs can mitigate risks. Managers should have discussions with drivers to outline expectations: Here is when we expect you to be on the road, this is the route we expect you to take, here’s when we expect you to stop. When there is an interruption to the plan due to situations such as poor road and weather conditions, traffic delays on route and driver fatigue, protocols should be in place for drivers to communicate with dispatch and operations staff to keep them advised, which in turn can be communicated to their clients. The safety of drivers and other road users is always the top priority. Telematics can also be used to monitor drivers’ routes and ensure drivers are following the proper procedures, such as speed limits and safety protocols.

If a driver does have a significant loss event, it’s critical for companies to take effective corrective action, such as retraining or a driver interview. Often, a lack of corrective action can lead to further and more significant losses.

For weather events, fleet operations should focus on forecasting models, if they aren’t doing so already. When severe weather conditions are imminent, companies should consider shutting down operations in the affected areas; all drivers should find the first safe place to park, advise dispatch of their status and stay in place until the shutdown order is lifted.