As capacity is at historic highs, and looks to remain so for the remainder of 2018, higher risk becomes a natural correlation. While there are loads of ways to save on insurance costs, some aren’t as realistic as others. For instance, not everyone can simply re-route their lanes from intense urban hubs to rural ones where accidents are less likely to happen. Also, decreasing your fleet size—especially in today’s capacity crunch—doesn’t sound like particularly good business sense in many cases, either. And while everyone wants quality drivers with clean driving records, there’s only so many to go around. We’ve distilled it down to a concentrated Top 5.
1. Create a quality hiring approach
You must provide some clarity and expectations first on the basics, such as driving, detention, and layover. These are the nuts-and-bolts of the driving job, and can largely address Levels 1 and 2 of Maslow’s Hierarchy. It meets the basic needs upon which the foundation rests. Safety is further addressed with proper training, accountability, and proactively rewarding success. It is also addressed through discussing proper equipment specs. The job description helps to establish interest in the job, as well as setting expectations for both employee and employer regarding how they will interact, and their corresponding duties and responsibilities to one another.
“This is conspicuously absent for most Driving Jobs, at least in a comprehensive way,” says Damon Langley, director of solution delivery, analytics and decision support at TMW. “We generally assume that Drivers know their job, and that is true to a large extent, but being specific with clear expectations creates trust.”
Also, create a driver scorecard and cover the metrics with the drivers in the hiring process, not after orientation. The scorecard should also roll up to driver managers, so they are working together toward the same goals. Ensure your driver manager uses this scorecard to coach drivers on behaviors, rather than simply point out that they are failing in a given area. A balanced scorecard approach helps develop authentic talking points on sensitive issues.
If expectations are not spelled out and agreed to, disappointment and frustration can lead to lower morale and negativity, resulting in lower performance, lower safety, and ultimately, loss of the driver.
2. Upgrade your technology
Yes, this requires a front-end investment, but there’s a method to this madness. Whether you’re a big fleet or small, today’s the day for an upgrade. ELD mandate notwithstanding, things are changing faster than ever before from a technology standpoint in the industry. Rather than resist, go with it. Make an investment that will pay off down the long and winding road.
There are, of course, many different ways to upgrade your technology, not the least of which is telematics. Some insurers offer upfront discounts on the basis of the entire fleet being outfitted with driver behavior telematics. Others reduce your premium once you have the data, which demonstrates improved driver behavior, such as speeding and hard braking.
Additional security features such as alarms and immobilizers can also bring down the price. The contents of commercial freight varies widely, but you’re bound to have assets inside. Wherever your parked, day or night, this approach discourages thieves from driving away with your valuable vehicle and its contents.
Cameras are more popular than ever. If you’re camera happens to be rolling when your driver is in an accident, it can be used as evidence against fraudulent claims—a significant issue in the industry.
3. Reward drivers for what doesn’t happen
Part of developing and maintaining a positive company culture is demonstrating you take care of your own. When drivers go stretches of time without getting into an accident or garnering fines for oversights and violations within their control, reward them with small bonuses. It can become a friendly competition between the drivers. It also shows that everyone’s accountable for the value they bring the company.
4. Reduce lifecycle costs
C-level executives may see frequent vehicle replacement as an unnecessary cost to the overall fleet budget, instead encouraging fleet managers to retain their vehicles until they reach an older asset age. However, many organizations retain and operate vehicles far past their optimum economic life, which can result in excessive maintenance costs, increased fuel costs as the vehicles decrease in fuel economy, and reduced utilization.
Reducing vehicle lifecycle cost requires the knowledge of how to optimize replacement cycles and conforming to the correct replacement cycles. Best-in-class fleet organizations utilize economic-based replacement planning tools to empirically determine the proper lifecycles for vehicle replacement.
After considering all relevant factors such as initial new vehicle cost, reasonable projected resale value, fuel MPG, planned maintenance and projected repair, personal use payments, you would do well to get in front of your investment. There are simply too many new and highly efficient vehicles out there now not to consider when and how to assess and replace. The cost-reduction potential is huge, and that’s why it makes our Top
5. Lower your CSA scores
FMCSA’s CSA program utilizes seven categories to prioritize carriers for possible interventions. Those categories are: Unsafe Driving, Crash Indicator, Hours-of-Service Compliance, Vehicle Maintenance, Controlled Substances/Alcohol, Hazardous Materials Compliance, and Driver Fitness. Data collected through roadside inspections, crash reports, investigations and other violations from the previous 12 months are used to populate the BASIC categories, ranking carriers in each category on a percentile scale of 0 to 100. The higher the number, the worst the score.
Maintain your scores and work them down. With lowering your rates it’s all about the long haul. A little investment can go a long way–and create a more satisfying company culture at the same time.
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