Without a robust strategy for risk management, commercial fleets are prone to experiencing disastrous possibilities, such as frequent vehicle breakdowns, drivers getting into accidents, and cargo damages. On the flip side, having reliable processes to manage fleet risk can help businesses avoid paying thousands of dollars worth of liabilities, penalties, and repair costs. Strategic fleet risk management can even help streamline workflows and increase productivity.
In this post, we explain everything you should know about fleet risk management: what fleet risk management is, potential risks that commercial fleets often face, how to reduce fleet risk, and how KeepTruckin can help you with fleet risk management.
What is fleet risk management?
Fleet risk management is about recognizing and preventing potential threats that can harm a company’s employees, commercial vehicles, cargo, etc.
It deals with creating programs and practices, including contingency plans, to prevent or deal with threats when they occur.
Besides this, risk management helps fleets avoid hefty penalties, associated legal charges, and other liabilities and comply with insurance requirements and applicable regulations.
In fleet risk management, fleet operators and risk managers should implement critical functions, such as:
- Driver background checks, supervision, and safety training
- Driver coaching
- Health and safety administration
- Vehicle and asset security and control
- Regulatory compliance
- Commercial insurance management
- Vehicle tracking
- Vehicle diagnostics
- Efficiency analysis and optimization
Fleet risks: 4 big areas for commercial fleets
Every day, commercial fleets face a variety of risks. These risks range from driver safety to compliance to vehicle safety. Some of these risks have relatively minimal and manageable impacts, while others can be massive and consequential.
It is easy to understand potential risks that fleets usually face by categorizing them into four broad categories.
Here are four types of risks that commercial fleets deal with:
1. Driver safety risks
The Federal Motor Carrier Safety Administration (FMCSA) reports that 87% of commercial motor vehicle collisions are due to driver errors and behavior, e.g., distracted or inattentive driving, speeding, tailgating, weaving, and others.
The department also said that the chances of involvement in safety-critical occurrences are six times higher for commercial drivers engaged in dialing mobile phones while on the road than those who don’t.
Speeding is another enormous risk, accounting for an estimated one-third of all motor vehicle casualties for over two decades, according to the National Highway Traffic Safety Administration (NHTSA).
Overall, the FMCSA notes speeding and driver fatigue as the major causes of fatal motor vehicle crashes. Other associated factors include:
- Aggressive driving behavior (weaving, tailgating, etc.)
- Over-the-counter and prescription drug usage
- Brake failure and other problems
- Overspeeding or traveling too fast for conditions
- Illegal maneuvers
- Traffic flow interruptions
- Following too closely
- Inadequate monitoring and surveillance
- External distractions
- Weather-related factors and problems
2. Compliance-related risks
There are certain rules and regulations that commercial fleets are expected to comply with. Failure to comply with those regulations may result in a penalty and can even disturb the flow of operations.
An efficient fleet does its best to mitigate compliance-related risks and ensures compliance with all the different regulations.
Here are a few examples of common compliance-related risks that many commercial fleets manage:
Hours of Service
Hours of Service (HOS) rules limit and monitor commercial driving hours to prevent driver fatigue and drowsiness leading to collisions and accidents. It also mandates taking sufficient rest periods, specifying the required number of driving hours and duration of breaks for a particular shift. Learn more about the different Hours of Service rules that most commercial drivers have to comply with.
The ELD mandate requires most commercial drivers to install FMCSA-registered ELDs. Failure to comply with the ELD rule may cost thousands of dollars in fines, and drivers can also be put out of service for violations.
The FMCSA has more rules on fleet maintenance, commercial driver’s licenses, driver vehicle inspection reports (DVIRs), and more to help trucking industries reduce safety risks.
3. Vehicle safety risks
Collisions are among the most critical vehicle safety risks for commercial fleets.
Other than disturbing fleet operations, road collisions and accidents can also lead to massive monetary penalties. According to the FMCSA, large truck collisions, on average, cost approximately $91,000. In the case of fatalities, the cost jumps up to $3.6 million.
These collisions can be caused by multiple reasons: aggressive driving behavior as well as poor vehicle upkeep.
According to the 2020 Internal Roadcheck results by CVSA, 3,163 vehicles were put out of service because of violations related to brake systems.
These vehicle-related issues can become a major risk for commercial fleets.
Apart from maintenance-related problems, vehicle theft is another serious risk that fleets should manage. Because of vehicle theft, fleets may lose expensive commercial vehicles as well as valuable cargo and business contracts.
4. Asset/cargo tracking and risks
Truckload theft has been increasing for the past five years, with 870 cases throughout the US in 2020, a 23-percent spike from 2019. For the past five years, this was the highest recorded volume, equating to 2.39 thefts daily. 2020 also saw a five-year high in the stolen shipments’ average value: $166,854 (higher by 41% from 2019).
These rising figures reveal the increasing risk for fleets and a greater need to track and safeguard their cargo. The higher the value, the more susceptible they are to truckload theft.
Fleets also face a greater challenge in securing shipment assets since thieves have gotten more creative, using even high-end technologies to gather intelligence, etc. Unfortunately, numerous fleets fall prey to cargo thefts due to a lack of proper and frequent truck-securing practices, vigilance, and robust asset tracking systems.
How KeepTruckin can help with fleet risk management
KeepTruckin offers an all-in-one fleet management solution to fleets of all types and sizes. The KeepTruckin fleet management platform not only helps fleets increase productivity and efficiency, but it can also help them mitigate risk and operate safely.
Here are a few ways how the KeepTruckin fleet management solution can help with fleet risk management for each category:
Driver and fleet safety
KeepTruckin’s fleet safety solution provides valuable insights and data to identify high-risk drivers and aggressive driving behavior. This real-time information and visibility into driver performance can dramatically improve fleet and driver safety.
There are multiple components that work together to provide fleet and safety managers with in-depth information.
First, the Smart Dashcam captures high-resolution videos, detects unsafe driving events, and automatically triggers alerts in real-time.
Second, DRIVE, KeepTruckin’s proprietary risk score, analyzes road conditions, dashcam video, vehicle type, location, weather, and more to measure individual and fleet-level driving performance more accurately. Without full context, it can be difficult to determine who to coach and what behaviors need to be improved.
Third, all the relevant data is sent to the easy-to-use Safety Hub. Using that data in an easy-to-understand format makes it easier for safety departments to make improvements in driver behavior and manage risk more effectively.
Individual driver behavior risk reports look like this:
In the Events tab beside Drivers, you’ll find more details about an event’s severity, risk factors, geographic location, and more:
Live GPS tracking
KeepTruckin helps safeguard your fleet and deliveries from thefts and ensure their safety through live GPS tracking and visibility into your vehicles’ whereabouts.
You can view your fleet’s locations on one screen, receive alerts if unauthorized persons are operating them, and get relevant incident details. This helps prevent vehicle misuse and theft.
Vehicle maintenance management
To avoid breakdowns and malfunctions that can result in expensive crashes, KeepTruckin lets you set and track preventive maintenance schedules and reminders.
The Driver App also has real-time fault code detection systems and lets you set live email alerts on these engine malfunctions to address them ASAP.
Plus, to simplify drivers’ fulfillment of their DVIRs (which records vehicle defects during inspections), KeepTruckin allows them to create and customize electronic reports for any vehicle and asset type via the KeepTruckin Driver App.
Managers can then receive alerts for these defects and view all DVIRs in the KeepTruckin Fleet Dashboard.
KeepTruckin makes compliance easy with its #1 ELD solution and easy-to-use, driver-friendly KeepTruckin Driver App.
Drivers receive alerts in real-time for upcoming Hours of Service (HOS) violations — which helps minimize compliance-related risks.
In addition, KeepTruckin also helps interstate commercial fleets with streamlined IFTA calculation.
Manually calculating the IFTA tax is an error-prone and laborious process. KeepTruckin automates the IFTA fuel tax calculation process and eliminates the administrative burdens as well as the risk of human errors that come with it.
Benefit from effective fleet risk management
Fleet risk management is an important aspect of modern-day fleet management. It is especially important because of all the different areas it affects.
By understanding what bases you need to cover and arming yourself with the right tools and technology, you can minimize various types of fleet risk and ensure smoother operations. Modern, all-in-one fleet management solutions, such as KeepTruckin’s, play a vital role.
Request a free demo today to learn how you can improve and simplify fleet risk management with KeepTruckin.
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