Inside
this issue:
Obtaining the proper coverage in the
event of ocean carrier insolvency
Increased limitations on IATA air
waybills effective Dec. 30, 2009
FMC ruling allows OTIs to use
unlicensed agents
Commercial bankruptcies continue as
U.S. moves out of a recession
FMCSA proposes higher UCR fees and
reviews HOS
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Commercial bankruptcies continue as
U.S. moves out of a recession
As the economy seems to be recovering,
bankruptcy filings, a lagging indicator, are rising.
According to Automated Access to Court Electronic Records,
the number of bankruptcies increased by seven percent to
more than 7,700 commercial filings in October compared to
September. Thus far, 74,832 businesses filed for bankruptcy
protection during the first ten months of 2009, which is a
16 percent increase from the same period in 2008.
Since the percentage of businesses declaring bankruptcy was
down in August and September, industry analysts believe the
increase demonstrates many businesses are struggling to
obtain necessary financing and product demand remains low.
Commercial bankruptcies are expected to increase for several
quarters.
In light of bankruptcy rates, other economic factors are
implicating the United States is moving out of the
recession. The 2009 third quarter Gross Domestic Product
rose 3.5 percent from the second quarter, which was the
first increase since the second quarter of 2008. In
addition, the National Bureau of Economic Research is
expected to declare the recession over. While unemployment
numbers remain high, industry experts believe many
businesses reduce expenses and increase productivity in a
recession, which eliminates positions.
While the economy is still recovering, businesses can expect
to see low insurance premiums in 2010. Rates have been
decreasing since 2004 and for some lines any premium gains
from the hard market of 2001-2003 have been lost. Since
premiums are based on factors such as sales volume,
naturally premiums are lower because of the recession. In
addition, with the number of bankruptcies, insurance
capacity remains high causing lower premiums.
While many businesses are struggling to avoid bankruptcy,
protecting your account receivables is vital to your
success. This year, many logistics companies are struggling
with extremely low profit margins and maintaining a steady
cash flow is imperative to staying in business. If one of
your large clients went out of business and did not pay you
for your services, would your business survive? Avalon
offers Trade Credit Insurance to guarantee your business
receives payment for your services. |
