COMMERCIAL LINES
HOW COVID-19 BROUGHT LAST-MILE DELIVERY TO THE COMMERCIAL AUTO INDUSTRY’S DOORSTEP In 2020, global retail e-commerce sales amounted to $4.3 trillion, a number that is expected to increase to $6.4 trillion by 2024, according to Statista.com. Online shopping has been growing in significance for years and is currently one of the most popular online activities in the world. In addition to this growth, the impact of the coronavirus pandemic on the e-commerce market has been dramatic, resulting in significant corollary changes in the commercial auto market. The transportation industry played a major role in ensuring both essential and non-essential goods were being delivered during the coronavirus pandemic, with one segment of the industry, last-mile delivery, emerging as a crucial element in the delivery process. “During the past decade there has been a shift in consumer buying habits toward more online and same-day delivery options,” says Mike Miller, commercial lines business leader, Progressive Insurance. “These shifts were accelerated during the COVID-19 lockdowns, and we expect many of the habits to remain at these higher levels, which is driving continued demand for more last-mile delivery.”
delivery segment into a rapidly growing one, which has ultimately changed the dynamic of that segment in the insurance industry and the transportation segment,” says Mark Gallagher, vice president, national transportation practice leader, Risk Placement Services (RPS). Nearly 42% of businesses that had never delivered before offered delivery services for the first time during the coronavirus pandemic, according to financial services company Rewards Network. Yet, even with an increase in the need for more immediate delivery options for everything from household goods to groceries to pre-made food, insurance carriers were reluctant to write and quote this line of business. “While demand surged for last-mile delivery services during the pandemic, few carriers were willing to write coverage for this class of business, which includes many independent contractors using their own vehicles,” Gallagher says. “Right now, there’s not a lot of carriers that provide last-mile delivery insurance coverage like the trucking segment, which has a lot of carriers providing coverage,” Gallagher says.
“Amazon, in particular, has altered the last-mile wisconsin INDEPENDENT AGENT
| FEBRUARY 2022 | 19
