First, the good news: The last mile delivery boom is expected to continue, with the market projected to grow by $62 billion in North America by 2027. Now, for the bad news: With nuclear verdicts on the rise, “good” could turn to “bad” with a single accident.
Nuclear verdicts, jury awards exceeding $10 million, are becoming increasingly common in transportation, and last mile delivery isn’t immune. These massive payouts can cripple smaller companies, drive up insurance premiums and threaten the entire delivery ecosystem.
Road of risk: factors leading to nuclear verdicts in last mile delivery
The nature of last mile delivery is loaded with risk and exposures that contribute to the potential for serious accidents, making this segment a prime target for nuclear verdicts:
- Challenging Traffic Conditions: Traffic congestion and unpredictable behavior of pedestrians and cyclists create a high-risk environment for delivery drivers that increases the potential for severe injuries in accidents.
- Beating the Clock: With an industry-wide driver shortage, delivery companies struggle to keep up with demand and keep pace with competitors’ quick delivery timelines. That pressure to meet tight delivery windows can lead to less-than-ideal delivery behavior — speeding, parking in unsafe areas, distracted driving — increasing the risk for accidents.
- Drive time: Since last mile delivery vehicles are typically smaller box trucks and vans, drivers aren’t required to hold a commercial driver’s license. This attracts a younger demographic with a lower level of driver experience and less experience navigating challenging urban streets.
- Deep Pockets: Larger last mile delivery operations can be seen as prime targets for plaintiffs’ attorneys seeking massive awards
The road ahead: how can the last-mile delivery industry navigate this nuclear threat?
Nuclear verdicts depend upon a lack of evidence for fault and sufficient evidence of non-compliance. If the jury can’t see crucial evidence that helps determine responsibility for the accident, they are likely to assign fault to the delivery driver. If there is ample evidence that the delivery company was not in compliance with all transportation rules and regulations, then the jury may decide that management was at fault.
Here are some key risk mitigation and safety measures that will help prevent a nuclear verdict:
- Think safety first: Implement a comprehensive driver training program, safety technologies like dashcams and collision avoidance systems, regular maintenance protocols, and maintain a culture of safety. Dashcam footage provides collision evidence that could absolve drivers in a lawsuit.
- Put data in the driver’s seat: Utilizing data analytics to identify high-risk areas and driver behavior patterns can help keep accidents from happening.
- Report & record: Maintain driver safety assessments with driver scores, and keep up-to-date maintenance data. These records will be crucial in proving that drivers and vehicles are completely compliant with all rules and regulations.
The future of the last mile delivery industry depends upon eradicating unnecessary nuclear verdicts. With a proactive approach to prioritizing safety and compliance, and implementing the latest in telematics, delivery companies can help ensure the industry’s projected growth through 2027 and beyond.
Renee Paul is vice president of BizCHOICE Transportation, a division of Specialty Program Group, LLC. Renee has been instrumental in creating contract carrier insurance programs for the Heavy Bulk Last Mile Delivery segment of the transportation industry. She also has experience integrating a variety of technology solutions with insurance offerings to promote safety and compliance across transportation networks and logistics companies. Renee earned a Bachelor of Science degree with a major in Business Management and Administration from Humboldt State University, and is a licensed broker in Accident, Life and Health, Property and Casualty and Surplus Lines.