• Rising insurance costs keep new truck drivers from joining the industry and can push carriers out. 
  • Drivers leaving the industry exacerbate the supply chain forces that drive inflation.
  • LogRock is a startup looking to change that. Check out its 10-page pitch deck below. 

Trucking tech startup founder Hunter Yaw has a secret plan to fight inflation, but he’s taking the long way around — through trucking compliance. 

Yaw brought his startup, LogRock, out of stealth Wednesday with $3.5 million in seed funding led by Dynamo Ventures. His mission is to keep truckers on the road and out of the courtroom or regulatory dog house. 

Historically high freight rates over the last two years are one of the factors that raised prices in retail stores. Those rates went up due to overwhelming demand from explosive consumer spending. But on top of that demand, trucking companies have been facing rising insurance premiums for more than a decade. 

“If you’re a small trucking company that has historically done 2% to 3% operating ,” and your insurance line item is doubling, “that will put you out of business immediately,” Morgan Stanley analyst Ravi Shanker told Insider last year. 

Industry researchers say the premiums are in part the result of increasingly costly lawsuits that follow truck crashes.   

Truck accidents are getting more destructive and more frequent, according to research from the American Transportation Research Institute. But insurance premiums for truckers are far outpacing that uptick. The ATRI argues that the increase in premiums stems from the increasingly dramatic court rulings that can result in payouts in the hundreds of millions.

Truck insurance premiums went up 22.5% from 2019 to 2020, according to ATRI data. Carriers told the institute insurance premiums were a top reason trucking firms reduced salaries and bonuses in 2020. And insurance premium costs per mile are three times the rate for small fleets as for large ones. 

The regulatory burden on truckers has crept up over the last two decades and, Yaw said, has now reached a critical point. The increased premiums putting pressure on pay and profits and the high likelihood of missing a regulatory deadline that can take a driver off the road, is thinning the trucking supply, he told Insider. 

“Unsafe operating practices that once incurred only short-term costs now result in long-running repercussions,” including bankruptcy, concluded the ATRI.

LogRock digitizes trucking companies’ safety and compliance information and all the legal requirements the companies have to meet, to proactively warn them when they’re heading toward a violation. But it also creates a record of all the compliance efforts so that in the case of a crash, trucking companies are more prepared for legal action — and so are their customers. 

“Brokers and shippers are now being held more and more accountable for the choice of truckers they make,” Yaw said. “Legal and compliance teams are pressuring procurement teams to be more scrupulous and more careful about the companies they work with. Compliance has gone from a back office thing to something that creates enormous risk to brokers.”

Here’s the pitch deck Yaw used to convince investors this is a problem worth tackling with a software solution and raise a $3.5 million seed round. 

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