Take command of Fleet Risk Management

Vehicle accidents tend to be the greatest source of loss for many organizations. With an effective fleet risk management program in place, a company can proactively reduce driving violations, help increase driver performance, reduce wear and tear of vehicles, prevent vehicle accidents or lessen the severity and costs involved, decrease vehicle downtime and lower insurance premiums.

The cost of truck crashes is significant. Based on the latest data available from the Federal Motor Carrier Safety Administration (FMCSA), the estimated average cost of a crash involving a straight truck is $97,811; $172,292 for a tractor trailer. The cost per non-fatal injury crash for a straight truck averaged $247,353 and $334,892 for a tractor trailer.

As to be expected, the cost of truck-involved fatal crashes is considerably higher: $6,314,659 per straight truck; tractor trailer, $7,633,600.

DRIVER FOCUS
One essential element of any successful fleet risk management program is identifying high-risk drivers and training them to reduce the likelihood of accidents. Driving behavior is responsible for up to 90 percent of all crashes, and 33 percent of fuel consumption, says Dan Steere, CEO of GreenRoad, a pioneer and provider of a comprehensive service to improve driving behavior.

Driver-decisions also play a very important role in the wear and tear of the vehicle, he notes. "Fleets that can significantly improve the daily decisions drivers make will find that they have to spend dramatically less money on maintenance and have far greater control in managing risk."

There are four essential elements of a driver risk management process, says Stanley Stone, vice president of safety, Penske Logistics:

• A proactive driver screening and hiring process which provides an opportunity to hire low risk drivers, i.e. drivers with no moving violation convictions and/or accidents, suspensions, revocations, etc.

• Policies and procedures that clearly define and communicate the expectations of driver performance.

• A comprehensive training program to help ensure drivers continue to maintain a low risk status.

• A process to monitor driver performance and interventions to appropriately address driver performance; reward/recognition for desired performance and remedial training and/or discipline for drivers who cannot perform to expectations.

"In our experience, written policies, legislation and monitoring all fall into the category of negative reinforcement - which alone cannot change driving behavior or create a culture of safety," says GreenRoad's Steere. Company data and studies have shown that "the carrot is just as important as the stick - maybe more so. Drivers need constructive input and positive feedback if they are to make sustainable changes in their driving behavior.

"The fact is, we all need regular, relevant feedback in order to improve. Real, valuable and productive feedback needs to come in two forms: What you are doing wrong - speeding, weaving between lanes, allowing enough following distance, etc., and what you are doing right - preparing in advance for a turn, reading the road, maintaining appropriate speed, etc."

MAINTENANCE FOCUS
Another important factor to effectively managing fleet risk is proper vehicle inspection and maintenance. Operating safe vehicles is a must because maintenance issues are increasingly cited in vehicle crashes.

"Unsafe equipment increases the risk of accidents and associated injuries and deaths, Penske Logistics' Stone says. "Therefore, proper and timely maintenance of vehicles coupled with pre- and post-trip inspections by the drivers is critical to managing this risk."

BOYD BROS.
Safety is always first and foremost at Boyd Bros. Transportation, says David Baker, vice president of maintenance. Formed in August 1956 and headquartered in Clayton, AL, Boyd Bros. is a flatbed truckload carrier that operates throughout the eastern two-thirds of the U.S. hauling primarily steel products and building materials.

In 1997, Boyd Bros. purchased Welborn Transport, which is now WTI Transport. That company is also a flatbed carrier with a shorter length of haul.

Together, Boyd Bros. and WTI own and operate more than 1,000 conventional tractors, and nearly 2,000 48-foot, 102-inch-wide, spread-axle flatbed trailers. Each tractor is equipped with satellite communications, an on-board computer and automatic load tracking.

About half of the power units are International 9400 sleeper tractors. These tractors are being replaced with the new 2011 International ProStar with the MaxForce engine. There are also some Peterbilt 386 and Freightliner Cascadia tractors in the fleet.

The typical tractor has a 435-horsepower engine and a manual transmission. Some 100 tractors have automated transmissions. Wide-base tires on tractors are becoming standard in the fleet as trucks are being replaced.

Boyd Bros. has three full-service facilities, which include complete maintenance shops, in Birmingham, AL; Cincinnati, OH; and Clayton, AL. There are service centers in Cartersville, GA; Cofield, NC; and Greenville, MS. WTI has a full-service shop in Tuscaloosa, AL, and yard facilities in North Carolina, Mississippi, Texas, Georgia and Florida.

9 basic steps to managing fleet risk

This list of elementary steps for taking control of fleet risk management comes form the Insurance Bureau of Canada, the national industry association representing Canada’s private home, car and business insurers.

1. Determine the extent of fleet loss exposures (types, causes, sources, number and cost of potential accidents):
• Use the risk management process to identify and determine the frequency and severity of fleet risks.
• Use benchmarking to compare losses to others in the industry.

2. Implement a preventative maintenance program.

3. Create fleet policies and procedures that could include:
• A motor vehicle safety policy that would establish the organization’s philosophy of safety and the way it expects drivers to perform.
• A vehicle selection and acquisition policy that would establish the minimum safety requirements for new vehicle purchases.
• A preventative maintenance policy.
• A policy for the disposal of vehicles to ensure that ownership is entirely transferred.
• A driver screening and hiring policy to establish minimum requirements of drivers (e.g., number of years experience, maximum number of traffic violations, etc.).
• A list of unauthorized uses including driving while impaired (drugs, alcohol, prescription medications, health impairments, fatigue, etc.), personal use, driving outside given geographical areas, etc.
• Maximum allowable speeds.
• Safe following distances.

4. Create a fleet safety manual for drivers. Each driver should have access to a copy. If each driver has read and has access to the policies and procedures, there is no excuse not to abide by them. Include all company policies and procedures related to driving. Create a pocket manual with key points, for quick and frequent reference.

5. Communicate any policy/procedure changes to all drivers. Have them sign to acknowledge that they understand the new policy/procedure and will abide by it.

6. Encourage drivers to give feedback and suggestions about how to improve fleet safety.

7. Ensure drivers receive regular training. Provide refresher courses.

8. Reward and publicize safe driving.

9. Ensure drivers know the procedure to follow in the case of an incident/accident.

SAFETY LANE
Every time a rig comes through one of Boyd Bros.' or WTI's full-service facilities, it is required to first go through a safety lane where it is fueled, inspected and PM'd if scheduled, before it can move on to the yard. Any necessary repairs are made at that time. If the repair is more than a simple fix, the unit is moved into a separate shop bay where the work is completed.

Each safety lane has its own shop computer. Once the equipment information is entered, the maintenance software alerts technicians to any required work that needs to be performed.

"For the most part, the maintenance shops can do any type of work," says Baker. "However, most of the major repairs, as well as body work, are sent out so technicians don't get bogged down. It's a matter of keeping technicians as productive as possible."

Boyd Bros. is getting more involved with predictive maintenance, particularly with the more expensive engine emissions systems, he notes. Getting to know the lifecycles of various components and systems allows the company to reduce maintenance costs and vehicle downtime by scheduling service on a component before it may fail or starts causing bad operating conditions.

The fleet also does maintenance tracking and benchmarking to make sure components, vehicles and equipment are performing as expected. Drivers, along with technicians, receive training on any new equipment that is introduced into the fleet.

CONTINUAL TRAINING
Because proper vehicle maintenance and repair is essential to fleet safety, keeping technicians trained and up-to-date is a main focus and a vital part of Boyd Bros.' 64-person maintenance operation, says Baker, who was a truck driver before moving to the maintenance side of trucking. All technicians go through various annual certifications and regular training from vehicle OEMs and suppliers with classroom, online and hands-on training courses.

A beneficial side-effect of this investment in technician training, he points out, is a very low turnover rate of technicians.

Drivers, along with technicians, receive training on all new equipment that is introduced into the fleet. "That is the only way to get the full benefit of anything new," maintains Baker.

To keep its drivers focused on safety and efficient vehicle operation, Boyd Bros. has its own driver simulator system and a dedicated training manager, Jason Bagley. He uses the simulator to observe a driver's performance during driving in a virtual space, under various situations and conditions, while operating the controls of an actual vehicle.

To further promote safety, drivers are brought in to the company's facilities every six months for safety reviews, as well as an evaluation of the company's and driver's performance.

"Everyone in Boyd Bros. and WTI are focused on safety," says Baker. "It's a total team effort and a part of this company's culture. Our sound safety program has all departments, with every associate, dedicated to insure we ‘Operate Safely and Legally' - our company's first ‘Corporate Belief' in our mission statement."

Both Boyd Bros. and WTI Transport have received 34 national and state safety awards since 2003, most recently with WTI Transport winning first place and Boyd Bros. winning third place in this year's American Trucking Association's annual safety awards program.

TELEMATIC DEVICES
With the evolution of telematics - the combining of computers and telecommunications systems - fleets have visibility into their driver's driving behavior, says Stone of Penske Logistics. Telematics also provides the opportunity to address certain unsafe driving behaviors, like hard braking, following distance, speed, lane drift, etc., that are otherwise very difficult to determine without an observer riding with each driver. Monitoring such behavior can help reduce the number of accidents.

Information from vehicle telematics can also assist fleets in defending drivers from accusations of speeding, aggressive driving or late deliveries by verifying an their arrival at a specific location. In addition, telematics systems can increase operational efficiency through improved logistics and back-office administration.

SAFETY SYSTEMS
Onboard vehicle safety technologies, also referred to as intelligent vehicle technologies, have proven effective in enhancing driver safety and helping prevent potential accidents.

"The critical and primary focus of accident prevention is skillful and safe operation of the vehicle," says Stone. Onboard vehicle safety technologies, such as adaptive cruise control, obstacle detection systems, lane change or road departure warning systems, vehicle stability systems, etc., "provide a secondary and emergency approach toward enhancing driver safety and preventing accidents and/or reducing the severity of accidents."

Vehicle safety systems are distinguished by those systems that just warn - such as lane departure warning and forward collision warning, and those that provide warning with active interventions, explains Fred Andersky, marketing director - Controls Group, Bendix Commercial Vehicle Systems. Bendix develops and supplies leading-edge active safety technologies, air brake charging and control systems and components for medium and heavy duty trucks, tractors, trailers, buses and other commercial vehicles throughout North America.

Lane departure warning can indirectly prevent most any crash caused by drowsiness and or distraction, says Bill Patrolia, director of North American Truck Sales, Iteris, a traffic management company focused on the application and development of advanced technologies that reduce traffic congestion, minimize the environmental impact of traffic congestion and improve the safety of surface transportation systems infrastructure. A few early warnings can "nudge" a driver to get off the road and take a break.

Forward collision warning systems are beneficial because warning time is critical in avoiding rear-end collisions, and "a fraction-of-a-second warning could make all the difference," Patrolia says. He references a Daimler study that showed 0.5 seconds can prevent 60 percent of these accidents; 1 second could prevent 90 percent.

Systems that supply warnings and active interventions, such as collision mitigation systems and stability systems, deliver both warnings and active interventions to help drivers avoid accidents, says Andersky of Bendix.

"There is a difference in stability systems," he points out, "and this can impact the full value that fleets may receive in terms of helping to reduce risk in their operations or delivering an acceptable return on investment."

ESP/ESC (electronic stability program/electronic stability control) or "full stability" systems – These are designed to help drivers mitigate rollover and loss-of-control situations on a dry, wet, snow or ice-covered roadways. "Often a loss-of-control situation results in a rollover," notes Andersky, "so helping drivers to potentially mitigate the initial loss-of-control may, therefore, help reduce rollovers."

RSP/RSC (roll stability program/roll stability control) or "roll stability" systems - These are designed to help mitigate rollovers - typically on dry surfaces.

Andersky cites a study by the National Highway Traffic Safety Administration (NHTSA) released in October 2009 that found full stability (ESP/ESC) technology would help reduce more accidents, fatalities and injuries than roll-only systems on combination vehicles.

"Keep in mind, however, that no commercial vehicle safety system replaces the most important safety components of all - a skilled, alert professional driver exercising safe driving habits, as well as continuous, comprehensive driver training," he emphasizes.

"Proper vehicle maintenance is also important - especially involving the braking system and tires," adds Andersky. "When the driver, or active safety system, needs to intervene, typically a properly maintained vehicle is going to perform better than one that is not."

The key for fleets regarding safety technologies and risk management, however, really ties to understanding how the safety technology helps drivers mitigate accidents, he concludes. In answering this question, there are two aspects to consider: how does the system aid the driver in the field to help him or her avoid accidents, and how does the system help/equip the fleet to better train their drivers to avoid accidents?

ACCIDENT REPORTING
Another aspect to fleet risk management is having accident reporting procedures. These "are critical in determining the root cause of an accident and will help determine how to prevent the same type of accident from happening again," says Penske Logistics' Stone.

"In the unfortunate event of accidents, reporting is critical to understanding and potentially reducing legal liability," Steere of GreenRoad adds. "The more insights you have into the cause of accidents - road conditions, poor traffic design, high-risk driver maneuver, etc., - the better."

It is helpful to be able to recreate the accident with real-time data from the vehicle, he says. What was the driver's speed? Was the driver making a high-risk compound maneuver like accelerating into a turn? Have other drivers had difficulty in the same location? "By answering these types of questions," he says, "you can determine something far more valuable than just who is at fault: how to permanently prevent future accidents."

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