Today’s organizations with transportation fleets are more important than ever, continuing to power the American economy through on-time deliveries of critical goods. What’s more, they are the backbone of solidifying our nation’s overall supply chain. In order to remain healthy and viable, fleets must continue to identify ways of managing risks associated with transporting goods over long distances. As such, more companies are turning to advanced safety technologies and telematics as a comprehensive solution.
Managing driver risks to enhance recruitment
Over the years, the recruitment of drivers has been a significant challenge for fleets because of risk management. Namely, driving a heavy-duty truck is a physically demanding job and one of the most dangerous jobs in America. According to the U.S. Bureau of Labor Statistics, truck driving is the seventh most dangerous job in America with around 900 fatalities annually. Moreover, the number of truck drivers dying on the job increased 6.6% over the last five years, proving conditions aren’t Creating a stronger culture of safety through increased driver input has made a difference, and the use of telematics because of advanced data analytics has built a significant knowledge bridge between operations and finance. This has been helping companies reduce overall costs, while adhering to a long-term strategic asset management plan that helps organizations specify trucks with advanced safety features in mind. Fleets are taking a closer look at this because of driver safety and the increased risks associated with the transportation of goods.
Costs from liabilities are rising
Increased risk isn’t just a problem for drivers and driver safety, it’s also hurting the bottom line. According to the most recent ATRI (American Transportation Research Institute) report on the Operational Costs of Trucking, large truck crashes declined from 2021 to 2022 by 2.5% according to the Federal Motor Carrier Safety Administration. However, insurance industry experts expect commercial auto liability premiums to increase at greater rates in 2023 due to rising costs and poor performance in the previous policy year.
For their part, private fleets have also faced risks associated with safety. This year, private fleets report 0.47 DOT Recordable Accidents per million miles, up slightly from last year’s all-time reported low of 0.40 accidents per million miles. Private fleet managers continue to aggressively manage safety through improved driver hiring with screening drivers and adopting new active safety technologies. According to the National Private Truck Council 2023 Benchmarking Report, risky drivers are finally being trained up or trained out. Safety technologies, such as forward-facing event-recording cameras, provide private fleets with increased visibility, tracking and analytics. Another benefit of these technologies is that they provide the information that private fleets need to challenge accidents on their record that are not their fault3.
The role technology and analytics play in risk management
The pre-hire process is always necessary to every risk management and safety program today. Background checks and motor vehicle reports are obvious pre-screening starting points and provide a good basis for knowing who you are hiring. However, it is not wise to focus solely on those tactics as a lot can happen without your knowledge in the time between a pre-hire screen and an annual follow-up.
Post-hire monitoring of driver behavior with an effective scoring system should also be the basis of an effective risk management system as this is the only way to use predictive analytics for reducing risk.
Because of this, there is more emphasis on the use of technology to score drivers. Telematics, forward- and rear-facing cameras, violations, collision history, and certain maintenance events can all be effective early warning indicators. The methods of collecting, scoring, and reporting are all important for risk managers as part of their overall processes.
An effective scoring system needs to be event-based with the ability to automate as much as possible. Some of the most common events fleets use for scoring are telematics tracked events like speed, harsh breaking, harsh acceleration, harsh cornering, and seat belt usage. An effective telematics system should capture these data points and provide timely reporting by driver, not just by asset. It’s important to decide how to score and weigh each event for your overall risk profile of a driver.
Furthermore, the driver’s collision history should also be considered and incorporated into the scorecard, especially since at fault collisions can be a key indicator of future risk.
Recently, fleet safety professionals have been inquiring more about identifying which “events” should be considered for scoring drivers, as well as how best to aggregate and analyze data from disparate sources into a holistic analytics tool that predicts who is more likely to be involved in a collision. Technology- and vendor-agnostic platforms are a must in these data analytics environments.
Incorporating newer trucks provides competitive advantage
Fleets today recognize the value newer trucks with advanced safety features can have on their operations. They view this upgrade as strategic and competitive as it prioritizes the safety of drivers and other motorists, but the upgrade also has positive benefits toward the bottom line. However, it is also important for companies to have a clear understanding of how this actually translates to the finance side of the business.
One of the most compelling reasons to invest in modern heavy-duty trucks is the array of advanced safety features designed to prevent accidents. Collision mitigation systems, lane departure warnings, and automatic emergency braking not only enhance the safety of the driver and other road users but also contribute to a substantial reduction in accident-related costs. In fact, according to settlement amounts of trucking cases settled between 2015 and 2023, the average truck accident settlement amount was recorded at $73,109, which includes cases where the defendant was operating a tractor trailer or other heavy/commercial truck.
Furthermore, insurance companies increasingly reward organizations that prioritize safety. Upgrading to trucks equipped with advanced safety features not only reduces the likelihood of accidents but also positions the company as a lower risk for insurers. In the last decade, truck insurance premiums have witnessed a gradual but consistent rise, according to data from ATRI. Premiums have surged from 6.4 cents per mile in 2013 to 8.8 cents per mile in 2022. When viewed in terms of hourly costs, this represents an increase from $2.57 in 2013 to $3.57 in 2022.
Transportation fleets remain important in today’s economy and play a large role in the transport of critical goods. Those companies that place a premium on safety and risk management using data analytics, telematics, and newer equipment will ensure fleets are positioned as competitive leaders, with stronger lines of communication between finance teams, risk management, and the C-level.