We’ve Seen the Box Truck Trend Before. Here’s What’s Different Now.

 

Jessica and I talk shop every day.  Today we tossed around a few things that have consistently been coming up.  DOT inspection trends we are hearing about, the weekend's upcoming storm and then the box trucks.

Where are all the box trucks coming from?  

Trucking insurance patterns fascinate me.  A week of quoting straight up straight trucks/cargo vans we start to see a pattern. 

 

Almost every carrier I called this week was barely out of the waiting period for their MC OR getting an inactive MC going again.  Most are planning to rent a truck from Enterprise or Penske, they may or may not have a VIN yet.   

While this uptick in box trucks and cargo vans feels familiar, we’re wondering what’s driving it. Is the current increase in lower weight vehicles directly related to new FMCSA pressures on driver qualifications?

Amazon & the Pandemic Box Trucks (The last box truck craze.)

During the pandemic, non-CDL operations surged.  The low barrier to entry with smaller vehicles makes them easy to start, renting trucks makes them easy to return.  They are primarily maintained by the rental company and you could be in a fresh truck weekly if you wanted. Depending on the rental company, you can even have the truck replaced on site, immediately following a breakdown.

Pandemic fueled box trucks moved staggering amounts of Amazon freight. We started hearing I’m going to haul Amazon in 2018. But 2020?  That is all we heard.  Instead of homeschooling the kids and using my FB marketplace bread maker, I was binding box truck policies as fast as we could quote them. 

In the beginning of Amazon hauling, you just needed a DOT & MC.  Auto liability, cargo, GL and trailer interchange  for truck tractors.  Once your MC went active and RMIS had the COI on file, you were good to go.

Then it rained claims. Not just liability claims but more cargo claims then I had ever seen.  Damaged cargo, stolen cargo. Box trucks with the lift gate embedded in asphalt when they took a steep driveway wrong.  All kinds of backing claims at the shipper/receiver.

Oh, those rental trucks? They have to be swapped out with every return/pickup of a new truck.  If you forgot to call your agent, it wasn’t listed when you had a claim. Cargo coverage follows the truck.  Drivers were easily hired, but not always added to the policy.  It wasn’t nefarious most of the time, it was a lack of knowledge.  The growing pains of new operations were tried and tested on Amazon themselves, Enterprise, Penske and the insurance carriers.

Amazon responded with an experience requirement.  6 months of active MC authority before onboarding. 

Penske and Enterprise responded with new insurance requirements.  Any auto?  Yea, that was not gonna happen.  Hired auto physical damage? Hard to get with the carriers available to box trucks under 2 years in business.  

Insurance carriers responded with significantly higher box truck rates with liability premiums pretty much the same as tractors. They started asking questions: Do you deliver to individual households?  Any LTL or courier type operations? Residential exposure?  

Then freight normalized and requirements tightened.  Insurance prices increased at renewal along with the rental company’s crazy insurance requirements and many of those same operations struggled to transition. The equipment was easy to return. The authority was easy to revoke. After keeping America going during one of the most devastating times I remember, many of them closed their doors.

Current Box Truck Craze

Right now we are seeing a large increase in box truck operations getting started.  Both new authorities or inactive ones being revived.  The premiums coming in are upwards of $30,000!

This is not happening in a strong freight market. New authorities are navigating tight rates and limited access to contract freight, which naturally pushes them toward equipment and freight that is easier to enter, even if it is less stable long term. 

A good number of preferred market trucking carriers have already said no more new venture box trucks.  Some require at least 2 years in business, squeaky clean records and won’t touch it if there is residential exposure. 

Last month, Canal sent notices out, they’re offering renewals but nixed box truck new business.  Progressive has long been the new venture go-to box truck market, now add Geico in the mix with a sprinkle of Berkshire Hathaway. Let us also not forget, Progressive has been down this road a time or two, but they are pricing for it now.

On the surface, the activity looks similar. A rush toward lower-weight vehicles with rental equipment. New authorities always move quickly. But the environment surrounding this increase is very different than it was during the pandemic.

The pandemic surge was driven by freight demand and urgency. Today, the timing is lining up with tighter scrutiny around driver qualification, documentation, and oversight. In recent industry conversations, some have suggested that newer pressures on non-domiciled drivers may be influencing equipment choices, pushing operations toward lighter trucks. That remains commentary, not a conclusion, but it is a pattern worth watching.

What is clear is that this increase is happening in a market that is far less forgiving. Insurance carriers are more cautious. Underwriting questions are more pointed. Compliance expectations are higher. 

But, the FMCSA pressures on box trucks?  Significantly less.  We tend to see way less inspections on box trucks, local or long haul.

Whether this trend is being driven by regulations, economics, or a combination of both, the result is the same. Box trucks are back in the spotlight, and this time, the margin for error is much thinner.

What do you think is driving the current box truck surge: freight, insurance, regulation, or a mix of all three?

Disclosure

This post is for educational purposes only. It is not legal advice, insurance advice, or a substitute for calling your agent. Truck U is good, but we are not psychic. Policies vary, laws change, and courtrooms get weird. Do not make decisions based solely on something you read on the internet unless it is from us, in writing, with your name on it.

All opinions are our own and do not represent the views of any carrier, employer, or underwriting department that occasionally wishes we were quieter on LinkedIn.