Overview

Risk Management Solutions

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The basics of risk management solutions

Every human endeavor comes with risk. Managing that risk is a challenge for every organization, but it is especially critical for businesses involved in transportation. In addition to having to plan for the types of natural disasters and mechanical failures that befall most other businesses, the transportation industry is particularly at the mercy of human behavior, with potentially devastating consequences including the loss of human life. As a result, risk management solutions (RMS) often work hand in hand with truck fleet management efforts to minimize the probability of negative occurrences and protect both the organization’s financial health and the health of its drivers.

Risk management solutions for transportation fleets

For a business to operate efficiently, it must identify and then move to manage risks. These risks include:

  • Physical risks - This includes hazards such as fire, chemical spills or collisions with other motorists.
  • Location risks - This includes possible hazards near the business, such as a river prone to flooding or bad stretches of road.
  • Human risks - This includes issues with drugs and alcohol, drowsy and distracted driving, or employee theft, as well as illness.
  • Equipment risks - This includes power outages, technology failures, engine breakdowns, or brake failure. 
  • Strategic risks - This involves risking company capital on improvements or investments that have the potential for loss as well as gain, such as a new fleet of trucks or in-cab technology.

Finding solutions for these risks requires a risk assessment that is particular to a business. These assessments often look at four categories: risks that are likely to occur, have some chance of occurring, have a small chance of occurring, or have a minimal chance of occurring. For instance, a transportation business has a high risk of experiencing engine problems, but a tiny risk of their drivers getting hit by lightning. All risks can be managed, but obviously, some are more important to address than others.

The importance of effective fleet risk management services

Lytx-Risk-Management-Solutions

According to the Fatality Analysis Reporting System and the Motor Carrier Management Information System, approximately 180,000 big trucks and buses were involved in crash events in 2017, and more than 4,800 of these vehicles were involved in fatal crashes. An effective risk management program that can prevent even a single collision can significantly reduce human suffering, while potentially saving society millions of dollars in medical expenses, loss of wages, and property damage. Truck drivers can only be responsible for their own driving, so risk management in transportation focuses largely on improving their skills.

Elements of fleet risk management solutions

Fleet management industry trends include driver monitoring through RMS software. Video telematics solutions, for instance, provide fleets with exception-based video that allows fleet managers to coach their drivers on safe driving behaviors when an event is recorded and reviewed. Lytx® video telematics solutions combine predictive analytics with video coaching to reduce collision risk before a driver is involved in an accident. Reducing collisions is the number one priority in fleet management solutions.

There is also technology to monitor driver speed and detect distracted or sleepy drivers, both frequent contributors to accidents. Meanwhile, GPS fleet tracking lets management know exactly where their trucks are, which means a driver or vehicle in need can get quick help.

 

 
A closer look at the Lytx Fleet Tracking Service

 

Of course, transportation is also highly regulated, so risk management also involves monitoring government compliance and maintaining proper paperwork. Companies like Lytx offer auditing for Driver-Vehicle Inspection Reports (DVIR), as well as hours of service management and driver qualification audits. All of these risk management solutions help keep trucks and cargo moving smoothly by reducing collisions, compliance violations, and missed deadlines.

How Lytx can help you manage risk

Risk management should be a part of the operational planning process for any company, particularly transportation companies. Effective risk management assumes that equipment and employee issues will occur and that companies are better off if they proactively take steps to protect themselves from adverse events such as technology failures, regulatory action, employee issues, and natural disasters. This means having the right insurance, emergency funds, and alternate business plans in place.

The transportation industry is particularly at risk. Risk management services offer these companies the protection they need. In some cases, proactive training will help reduce the number of issues, such as accidents and driver error. Risk management software can help businesses coach employees to follow safety practices. Risk management tools can also help monitor compliance paperwork to spot emerging problem areas and address them before they lead to fines and penalties. Life is risky for everyone, so planning for problems is the best way to survive them. Corporate risk management is an essential survival tool for everyone, but especially for transportation companies.

The best way to protect a company is by utilizing advanced risk management solutions. Contact a safety specialist today to start working on your risk management solution.