Trucking consolidation is creating more demanding insurance placements as businesses combine operations and retain more risk, requiring brokers to reassess how coverage is structured across a growing client’s activities.
The trend was recently highlighted by C.H. Robinson’s October 5 announcement of a $5.8 billion agreement to acquire its rival freight company RXO. The combined company will be more than twice as big as its next largest competitor in the US, merging freight brokerage and managed transportation businesses, alongside capabilities in global forwarding, expedited transportation and last-mile delivery. It is expected to close in the first half of 2027, subject to approvals.
Across the trucking clients he serves, Brent Allred (pictured), who leads Higginbotham’s transportation division, sees financial pressure and exhaustion pushing some owners toward a sale. As those businesses consolidate, he said, their insurance requirements can change substantially.
“Today, consolidation is largely coming from tighter margins and, honestly, fatigue,” Allred told Insurance Business. “When margins are under attack, you have to work harder for the same or less pay.”
The C.H. Robinson-RXO merger comes amid a rapidly consolidating transportation sector. On October 6, TA Services announced its acquisition of Carmen Pacheco Transportation and Interload Forwarding, adding trucking assets, five warehouses and cross-border operations in Texas.
Fleet operators have also pursued scale. Werner announced its approximately $245 million acquisition of FirstFleet in January, adding roughly 2,400 tractors and 11,000 trailers to its dedicated trucking operations.
Allred describes an industry contending with the effects of a prolonged freight downturn alongside rising operating and insurance costs. An aging ownership base adds to that pressure. Some owners are choosing to cash out while they still see an opportunity.
Mergers and acquisitions, however, can create a more complex insurance purchase. Brent said brokers may need to work closely with clients’ corporate attorneys when structuring coverage.
“Sometimes consolidation makes sense for ease of doing business and to find coverage. Sometimes it makes sense to keep the entities independent, either for the immediate future or over the long term, because you want to isolate unique exposures for a reason,” he noted.
Larger transportation businesses may also approach insurance with a substantially different appetite for retaining losses. “It’s not unusual for them to largely self-insure a primary layer that a typical trucking company or logistics service provider would have to buy insurance for,” Allred said.
Those businesses then purchase insurance towers to address larger losses, including claims reaching $5 million or $10 million, he added. The broker’s role consequently expands into questions about how retained claims will be funded and managed.
Consolidation is also unfolding as trucking companies navigate pressures ranging from fuel costs and driver availability to an increasingly difficult liability environment. Allred identified litigation as the most persistent challenge, with improvements in individual states offering limited relief to fleets operating across state lines.
He said rising settlement costs on smaller claims as affecting insurers and trucking businesses, particularly when operators retain more of each loss. “The real issue is severity creep,” said Allred. “A claim that should cost $20,000 is now being paid out at $100,000. Extrapolate that across a thousand scenarios.”
Insurers are also demanding stronger evidence of fleet quality, increasing the importance of brokers’ ability to interpret telematics and explain clients’ safety performance.
“It’s no longer enough for a broker or agent to tell an insurance company that a client is better than its peers,” Allred noted. “The proof is in the data. Insurers want to see it.”
Those demands helped shape Higginbotham’s move to establish a dedicated transportation division, building on an existing practice that had expanded its resources in loss prevention, claims, data analytics and technology.
The structure gives Allred a full-time leadership role and brings specialist staff together to support increasingly sophisticated accounts.
While trucking remains its principal focus, Allred plans to broaden the division’s domestic transportation capabilities into areas such as moving and storage, towing and hazardous-waste hauling.
“To do that, we need to operate on our own and bring together team members with that specialist focus,” he said.
