Managing the Financial Side of Commercial Fleets

Avoiding Fleet Safety and Accident Management 'Speed Bumps'

Among a fleet manager’s primary duties is ensuring driver safety. While it is imperative to have a safety program in place, avoid the pitfalls that can doom it to failure and negatively affect the bottom line.

March 2013, by Staff

We live in an increasingly litigious world. Victims, or those seeking to be victims, look for deep pockets. A successful corporation and its fleet make enticing targets for such litigation.

Fleet managers have a basic responsibility to physically and financially protect not only drivers, but the public and the company as well. They do so by providing the safest vehicles they can (within the scope of the mission), ensuring proper vehicle maintenance and care, and providing safety training to drivers. Along those lines, instituting both fleet safety and accident management programs are important steps. Here are some “speed bumps” to avoid:

Building a Safety Foundation
It sometimes seems as though fleet safety is a “boutique” issue; interest waxes and wanes depending on circumstances. The CEO sees an article online about an accident involving a business vehicle, and suddenly safety is important. Fleet managers know better; they know that having a safety policy is one of the foundations of a successful fleet program.

What, then, are the elements of such a foundation? They include:
● MVR screening for new hires, existing drivers, and family members (personal use).
● Seat-belt policy for all drivers and passengers.
● Cell-phone policy, which bans its use while driving.
● Regular communication of safety-related information.
● Clearly defined penalties for driving violations.
● Rewards for extended safe driving periods.
● Definition of accidents as preventable or non-preventable.
● Establishment of an accident review committee to review and classify accidents as preventable or non-preventable.
● Safe driving training: behind the wheel, online, written, or some combination of all three.

An effective fleet safety policy will contain all, or at least most, of the above elements. It should be written, available to all drivers and other fleet stakeholders (legal, risk management, human resources, and drivers), and in an easily updated format. With the advent of the Internet, a company intranet website is a perfect venue.

Finally, any fleet safety policy should have not only the approval, but the full endorsement, of senior management. Without this, effectiveness can be reduced, possibly substantially. All drivers should be required to read and sign off on the policy (either separately or as part of overall fleet policy) when hired, and it should include a release from the drivers to permit the company to obtain MVRs for themselves and for any family members who are qualified and permitted to drive the vehicle.

Avoiding Safety Policy Pitfalls
The ultimate goal of a fleet safety policy is to avoid violations and accidents, which, by definition, keeps drivers, passengers, and the public safe. Within each of the elements previously discussed are pitfalls the fleet manager should avoid.

Motor Vehicle Records (MVRs):
● Don’t eliminate new-hire candidates due to violations on the driver’s record. There are ways to mitigate risk while addressing issues. Certainly, a candidate with a long, consistent record of unsafe driving is probably a risk that should be avoided. But, a single violation, or a small handful of minor violations over a five-year record can be dealt with, while hiring an otherwise qualified, talented candidate. Delaying the provision of a company vehicle (having the driver use a personal vehicle while being reimbursed for its business use) is one way; a probationary period (e.g., six months) can help emphasize the company’s focus on safety. Then, after a vehicle is assigned, the record can be reviewed monthly, or bimonthly, for the balance of the first year.
● Conversely, don’t ignore what may at first seem like minor violations, such as equipment (headlight or brake lights), administrative (expired inspections or registrations), or minor moving violations (failure to signal a lane change, or “speed trap” tickets). Not properly caring for a company vehicle or not keeping a registration current can be a sign of sloppiness that might “bleed” into overall job performance.
● Don’t treat all violations equally. Deal with serious moving violations, e.g., speeding, DUI, reckless driving, etc., severely and swiftly.
Reward/Penalty Programs:
● Don’t simply reward safe driving; drivers are expected to drive safely as part of the job. Reward exemplary records, such as five or 10 years or lifetime records without chargeable accidents or violations.
● Don’t allow exceptions (this holds true for all aspects of the safety program). “He or she is our best salesperson” is no reason to make an exception for multiple violations or accidents. Apply penalties consistently across the board.
● Don’t exempt senior management from the policy. Senior managers must buy into the policy (so called “C-level” management) for it to be effective. If the senior VP of sales has a second or third chargeable accident, or a serious moving violation, apply penalties as you would a new-hire salesperson.
Safety Training:
● Don’t think that safe driving training once or twice a year will be effective. Such training should be a regular part of the driver function. Repetition is the key to effectiveness. Drivers know they shouldn’t speed, drink while driving, or drive defensively and should wear seatbelts. It is only when they are reminded regularly, when it is fresh on their minds, that training will be effective.
● Safety communication should be a standard part of the drivers’ daily or weekly activity; thus, don’t simply send out a monthly newsletter or e-mail. Work with management to make safe driving part of regular sales meetings and conference calls. Again, repetition is critical.
● Don’t limit safe driving communication to electronic venues (online, e-mail, etc.). Though it may seem outdated, drivers can more easily keep and reference written/printed material, especially while out on the job.
● Avoid just text and words; try to make safety communication interesting and visual. Don’t use only generic material; use drivers and other employees, perhaps even family members, in the communication.
● As noted earlier, don’t make exceptions to the policy, no matter who the driver may be. There will inevitably be circumstances when a senior manager, or a member of his or her family, will be in violation of the policy. Apply enforcement and penalties consistently throughout the organization.
● Don’t simply apply penalties; use enforcement to work with the driver and manager toward getting the safety message across. Training and communication should be a follow up to the consequences of violating policy.
● Avoid extremes whenever possible; penalties should match the seriousness and frequency of violations. Termination, for example, should only be a last resort. Not only is it extreme, but termination will necessarily involve legal and human resources departments. That said, drivers who just don’t “get” the message, and, despite the company’s best efforts to get them to change, continue to endanger themselves and others, are too large a risk to remain in jobs that require regular business driving.

Managing the Inevitable
No matter how thorough a company’s fleet safety policy is, and how vigorously it is enforced, accidents are inevitable, from minor fender benders to major, serious accidents, which can result in injury or even death. They can involve only the company vehicle, or one or more other vehicles as well as pedestrians, and they incur both hard and soft costs. An accident management program will provide both drivers and the company with a process that will collect data, get vehicles repaired, and get drivers back out on the road doing the job quickly.

Accident management programs consist of three primary services:
● Accident reporting.
● Vehicle repair management.
● Subrogation recovery.

There are other “sub” services within some of these, including replacement rental vehicles, towing, and shop screening. All of these services combine to help manage a difficult and time-consuming problem, get drivers out of the process and back out on the road, and ultimately save money.

Accident management is itself one of the core processes of fleet management (others are leasing/purchasing, maintenance management, and fuel), and it is inexorably tied to a safety policy. As with most business activity, proper planning and implementation go a long way toward success.

How Not to Manage Accidents
As a safety policy is all about prevention and mitigation of risk, so accident management is about remedy ­— handling events that occur when safety policy isn’t enough. Here are the “don’ts” of each element of an accident management program:
Accident Reporting:
● Don’t produce too many, or too few, reports. Before implementation, survey fleet stakeholders to find out who needs to see the report. Keep in mind, though, most accident management suppliers will provide a fixed number of reports as part of the program, with surcharges for additional reports. Usually, sending one each to the fleet manager, to the driver’s manager, and to risk management will suffice.
● Don’t assume drivers know how to properly fill out the report, or what information the supplier needs to do so on the phone. Part of implementation should be to review the report with all drivers, emphasizing what information they’ll need to collect before calling the incident in to the provider.
Repair Management:
● Avoid your drivers’ attempts to inject themselves into the repair process.
● Fleet suppliers will try to take on as much authority as possible. Avoid allowing accident management suppliers to manage all your company’s resources when providing the service. Know and understand the basics of damage repair and how to make the repair/replace decision. Keep supplier authority low; be involved in the process as much as time permits.
Subrogation Recovery:
● Avoid delays. The longer a claim goes unrecovered, the smaller the chances of collecting. Stay on top of open claims; suppliers will usually provide reports that show contact, offers, and other progress.
● Try to stay away from payment offers. They can often simply replace one claim with another, when the first payment or two are made, and subsequent payments go unrecovered. It can be better to collect a lump sum recovery that is smaller than the sum total of offered payments, which the company may never see.

Strategic ‘Don’ts’
What fleet managers should avoid in specific instances and circumstances can be summarized with some overall actions to avoid when choosing, implementing, and managing both safety and accident management programs:

● Avoid “turning over” the entire process to a supplier. While a supplier brings expertise and resources to the table, draw a careful balance between making best use of those resources and keeping key decision making in house.
● The fleet manager, and the fleet’s supplier, is the expert. Don’t allow drivers or other fleet stakeholders to inject themselves into the process.
● That said, don’t leave them out of the program altogether. You’ll need input from several stakeholders — legal, human resources, and the drivers’ departments — to properly set up procedures and implementation. Not only that, but they’ll need to know and understand what place they have in both programs.

Safety policy and accident management programs are both key components of a successful fleet operation; the former helps prevent problems, the latter handles them when they inevitably arise. Working hand-in-hand with all stakeholders, while avoiding the pitfalls of implementation and procedures, will make certain that both are successful. n

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