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How to Rein in Rising Insurance Costs

GPS tracking and telematics software help lower insurance costs.

Insurance is one of those things you may not really think about until your business needs it. That is, unless you’re facing skyrocketing premiums or, worse, shrinking access to coverage itself, which is what’s happening to truck fleets. Negative trends impacting the insurance market’s view of trucking are forcing more fleet managers to think a lot more about insurance.


Fleets are facing what commercial-insurance broker Hub International defines as a “hardened insurance market,” in which premiums have not only gone up, but in many cases have doubled. “With increases between 10% and 15% for the third year in a row, policies are no longer just 3% to 4% of a fleet’s annual revenue — they can approach north of 7.5%.”


Reining in insurance costs requires looking at your operation the way an underwriter does. Is your fleet, at bare minimum, a calculated but acceptable risk for an insurance carrier to take on? Or does everything about your operation scream disaster about to happen?


To be sure, you are not alone in facing the insurance juggernaut. In its latest survey on the top issues confronting trucking, the American Transportation Research Institute, which is part of the ATA Federation, identified insurance cost and availability as an emerging issue. 


Since 2013, per ATRI data, fleets surveyed have been walloped by insurance premium costs that have jumped over 17%. ATRI states that rate hikes are being “driven by a number of factors, including increasing costs associated with: equipment repair, rising medical costs, higher jury awards and settlement costs, and greater safety and legal exposure.


Underscoring how serious the threat is, ATRI has pegged as a top research priority the impact of so-called “nuclear verdicts,” massive punitive damages of over $10 million, on truck fleets. The researchers will document and quantify historical trends associated with growing jury awards and out-of-court settlements resulting from negligence cases and other tort suits brought against trucking companies.


While the rise in nuclear verdicts can be, and are, blamed on personal-injury lawyers who are very good at their jobs, the fact that trucks can be involved in horrific accidents is arguably the biggest factor. Some crashes can’t be avoided, and no driver or employer should be blamed for them. But in the current tort-happy legal climate, it behooves all truck operators to do all they reasonably can to prevent or mitigate accidents on the road, especially calamitous ones.


Risky Environment


“Significantly minimizing the cost of insurance is unlikely in the current environment,” contends Keith Dunlap, transportation practice leader and senior vice president for Gallagher Bassett, a global claims-services provider. “There are too many issues insurers are facing today, from the high cost of defense, to unreasonable plaintiffs’ attorneys with unreasonable demands, to year-over-year escalating loss costs. And until there is meaningful tort reform implemented by state legislators, I don’t think it is possible to lower insurance pricing significantly.”


That being said, he also points out that, “exceptionally well-run trucking companies with experience, owned equipment, low driver turnover, minimal loss activity, a commitment to a telematics investment, and impeccable CSA scores are in a better position to gain access to more insurers with better pricing than those that don’t stand out as best-in-class companies.”


Dunlap adds that commercial insurers have “a much higher chance of achieving better outcomes on claims with focused third-party [claims] administrators managing expectations” of liability claims.


Third-party claims administrators for commercial liability insurance providers act much like claims adjusters. They may work with the insurance company’s internal claims adjuster as well as outside claims investigators and defense counsel in the event of lawsuits.


Speaking of defending against the rise of nuclear verdicts, Dunlap warns that “hiring marginally acceptable employees” has helped lead to “exploitation by skilled plaintiff’s lawyers.


“This leads to negligent hiring and retention claims against the motor carrier, all in a concentrated effort to support gross negligence and punitive damage claims, maximizing recovery,” he says. “These efforts can result in higher jury awards, adversely affecting insurers who write [policies]in the trucking space. Those insurers then increase their rates across their entire book of commercial auto business.”


Dunlap advises that the “only way any motor carrier can truly protect themselves against allegations of negligent hiring today is to maintain a driver qualification file that can withstand scrutiny. Truckers need to comply with each of the seven hiring processes outlined in the Federal Motor Carrier Safety Regulations [49 CFR 391], which outlines the minimum requirements for hiring commercial motor vehicle drivers.”

 

Eyes and Minds


Whenever a driver is involved in an accident, both driver and employer can be targeted by a break-the-bank personal injury suit. One way to combat that is to do all you can to prevent distracted driving, advises law firm Franklin & Prokopik in its transportation-practice blog.


The firm states that “in trials that result in massive civil judgments, awards for punitive damages, if sought, far exceed awards for compensatory damages….the reason for this trend may be rather simple: With an increase in commercial vehicle accidents involving a distracted driving component, the transportation industry has seen an increase in nuclear verdicts.”


As Franklin & Prokopik sees it, there’s a common thread to nuclear verdicts. “There exists some act leading to distracted driving, whether visual, physical, or cognitive, and an element of preventability and accountability on behalf of the carriers and trucking companies. There is no dispute that distracted driving significantly increases the likelihood of catastrophic accidents. The recent nuclear verdicts in cases involving commercial vehicle accidents with a distracted driving component make clear that juries will hold not just the driver accountable, but the motor carrier accountable as well for the safety of the public on the roadways.”


Although distracted driving can be the root of many horrific crashes, it is of course not the only cause of poor safety performance that can drive up insurance premiums and even lead to a denial of coverage for a truck fleet.


Here’s where managers roll up their sleeves and dig into their safety stats to identify what needs fixing first and foremost to make their fleet attractive to insurers. The tools used may be soft-touch, such as improving driver recruitment and retention to hire the best possible drivers, or hard-edged, like leveraging telematics and spec’ing advanced safety equipment.


The results of these efforts need to be measured and the goals set for them continually updated to present the fleet to insurance underwriters with the most flattering loss-ratio profile possible.


Tell a Positive Story


“Insurers want to work with fleets. Particularly insurance brokers. They want to make sure their customer [risk profile] is attractive to underwriters,” says Mark Murrell, co-founder of CarriersEdge, which works with a number of insurance providers that resell the company’s online driver training modules. CarriersEdge also co-produces the annual Best Fleets to Drive For program.


Murrell says there are “starting points” to building a positive profile, including showing proof of documented safety policies for drivers and managers and proof they are followed, such as by documenting training.


“More training equals a better safety profile,” Murrell contends. “And insurers want to see how much is done in terms of follow-up to any training. Some may want to see it in print or electronic form. But my guess is they will take what they can get to work with.” They’ll also want the training regimen organized with drivers methodically tracked. “They don’t want to see a room full of boxes” of training material.


“Keeping the materials online will make it easier to pull up reports,” he adds. “Since it can be billable work for a broker to work up profiles, being organized will save the trucking company money — as will the broker being able to tell a better story about the fleet to an underwriter.”


“Improving a fleet’s safety profile is seldom a one-time fix,” says Chad Hoppenjan, assistant vice president of Safety Management Services Company, a safety and risk-management consultancy. “We see the most success with clients who continuously work on it.”


He says when SMSC presents its safety assessment, customers “more often than not are very receptive. We work with them, but we can’t tell them what to do.” Improving a risk profile is a process, “not something you can change overnight. What you do is work in this policy year to improve for the next year.”


For Hoppenjan, key elements of a safety review should include top-down management commitment; hiring quality drivers and then retaining them; making sure operational, sales, and driver-manager teams are all accountable for safety; and focusing on reducing “loss leaders” in the fleet and zeroing in on “real safety issues, not perceived ones.”


Don’t Hire Problems


Drivers are at the heart of the safety equation, or as Hoppenjan puts it, “You don’t want to hire problems and then continue to have problems throughout their employment. What I stress is to not take your current qualified drivers for granted. If you can retain them, you will not have to hire so many later on.


“And you don’t want to set up drivers to fail,” he continues. “Basically, that means not putting them into a bad position, such as loads scheduled too tightly, that can push them to be unsafe by driving too fast and hard.”


Hoppenjan stresses holding accountable everyone who may impact driver safety. “For example, evaluate driver-managers on crashes/injuries per driver and moving violations per driver. See who stands out and why. And address those [managers] who may be a part of causing safety issues.” Similarly, don’t let sales “overpromise shippers.”


Determine your loss leaders (vehicles and injuries) in terms of both losses and compliance. “Base this on your real data, not data distorted by the one severe incident that may have happened recently,” he recommends. “For example, if you’re using event recorders, are you seeing an upswing in following too close? If you can control these kinds of losses, it can only help with insurance rates.”


Keep in mind that the latest technology developments, everything from event recorders to collision-mitigation systems, “are all huge” in helping drive up safety performance, Hopperjan notes.


Technology Teaches


The various active safety systems now available on trucks, as well as event recorders and cab-mounted video systems fleets install, are constantly delivering a rich flow of actionable data to inform a fleet’s safety assessment and training efforts.


“Of the top fleets in the United States, the majority have implemented some type of telematics,” points out Gallagher Bassett’s Dunlap. “These motor carriers understand how collision-avoidance technology, auto braking systems, and video captures help reduce both the frequency and severity of loss. They also understand how implementing telematics helps protect against meritless claims by third-party attorneys. In my view, this is a key risk-management investment.”


The electronic logging device mandate has almost every fleet now using some type of telematics, points out a Hub International trend report. “There is an incredible amount of information that can be harvested to improve both operations and safety if used correctly,” the brokerage states.


Telematics can include video systems to improve safe driving practices and to exonerate drivers in crashes that could not be prevented, as well as information about the speed, location, and mechanical condition of trucks. “How this information is shared with drivers, management, and customers can have a direct impact on the performance of the organization,” Hub says.

 

Attitude Adjustment


“I met with several underwriters recently, and they are hot about telematics,” says Terry Lutz, vice president of risk management for Transervice Logistics, which operates trucks on dedicated routes and contract carriage, along with providing full-service leasing and freight brokering. “Crash avoidance, forward and rear-facing cameras, all play a part.


“Something else that’s important to bringing down premiums is the culture of your organization,” she continues. “Is management connected with safety? It should not be an issue to get top management to weigh in” on policies and investments.


Lutz agrees it’s a tough market for insurance. “Most carriers that score poorly on safety will go out of business because they won’t be able to pay for expensive umbrella premiums.”


She notes that some insurance firms have exited the trucking market altogether. “Others will only now play at the higher level — fleets with the best safety records — or they may set lower coverage limits, maybe $3 million to $7 million instead of $10 million, or they will put in a 20% to 30% rate hike.”


Fleets need to work with their insurance brokers, Lutz advises. “You can’t have the attitude, ‘That’s what insurance is for’ when something goes wrong... [do that and] you will eventually be loss-rated and you will pay.”


Re-posted from HDT Truckinginfo January 8, 2020 by David Cullen



Let See The Fleet help you rein in your insurance costs!

26 Apr, 2022
The old saying “a picture is worth a thousand words” has been given new life in fleets with front- and driver-facing cameras. With little exaggeration, these pictures might be worth a million dollars or more in life-saving benefits. Often experiencing initial driver pushback with claims of creating a “Big Brother” environment, in-cab cameras are increasingly becoming common in fleets across the country, and that pushback is dissolving as fleet drivers and technicians experience their benefits first-hand. Measuring the Need A crash of any sort is a lose-lose proposition for a fleet. At the very least, a vehicle is put out of commission and an experienced technician or driver is sidelined while waiting for it to be repaired. Worse, if that driver was injured, it will cost approximately $70,000 in workers’ compensation claims , about twice the amount of an in-office injury. If another person were injured or killed in the crash, the fleet and its company could be liable for millions, possibly even resulting in a so-called “nuclear verdict” that could be catastrophic for the company in the short and long term as its brand will almost certainly be tarnished as a result. No matter the scenario, motor vehicle crashes are a drain on the productivity and profitability for U.S. companies that operate fleets of vehicles, costing employers $72.2 billion as recently as the year 2019. While telematics can provide deep insights into vehicle data and driver behavior, by adding a video monitoring component to your telematics capabilities you’re completing the picture by providing visibility that will help improve efficiency, safety, and protect your drivers, and company, from false claims. The 4 Benefits of Video Telematics In short, having eyes on your fleet drivers is a win-win proposition. Specifically, your fleet will see four primary benefits from its use in the event of a crash or other event: Know the whole story. The full context of harsh driving and accident events can be reconstructed, including in-cabin driver behavior, weather conditions, the positions of the vehicles involved, and other circumstances for informed decision making. Strengthen trust in your employees. You can confidently trust and support your employees without having to do so blindly—that is, without video evidence. You will be able to combat false liability claims with video to help establish the facts. Aid in keeping costs of false claims down. Video proof can also help prevent hikes in insurance premiums or damage payouts resulting from unchallenged false accident claims. Hold your drivers to a high standard. Though telematics and video data won’t eliminate unsafe driving behaviors on their own, they help you more effectively address those behaviors before damage is done. By keeping your drivers accountable and backing them up, it could also help your fleet retain your best-of-the-best employees, which is critical in keeping your fleet productive and safe. While it took more than a decade for many fleets to adopt telematics technology, in just a few years front- and driver-facing cameras are being relied on by about 35% of U.S. fleets according to data collected for the Fleet Technology Trends Report 2021. There’s little doubt that a video telematics solution can help businesses prioritize safety and productivity and could be a benefit for your fleet operation. reposted from Work Truck December 7 2021 Get the whole story with See The Fleet DashCams!
22 Apr, 2022
The old way fleets have been taught to improve fleet safety is perfectly suited for a world that no longer exists... Today, fleets have access to advanced safety platforms that collect and analyze data to proactively improve driver performance to reduce accidents and negative events altogether. And the best part is there is a scientifically proven method to statistically improve driver performance through positive reinforcement. We call this the GreenZone; a proactive combination of coaching, positive reinforcement, and technology. Below is the toolkit you need to get there. Flipping the Script of Driver Coaching Stop communicating what not to do, and coach what to do. Discover how leading with positive feedback can increase driver morale, performance, and retention. Alert, responsible, focused, and aware…all qualities of driving behavior that make up a safe driver, just to name a few. These positive behaviors are crucial to a successful fleet safety program, and don’t necessarily get the attention they deserve in driver feedback. Typically, review sessions focus on pointing the finger at the driver- what they did wrong and the risk associated. Typically, the conversation is lopsided – only focusing on: “don’t do this when driving!” What’s wrong with this picture? It creates friction. It results in unhappy and non proactive drivers. Drivers get worn down from an overabundance of punity criticism; feedback fatigue. Which leads to low morale, poor performance and higher turnover rates. All things you don’t want. So, instead of leading with the negative, why don’t we lead with the positive? Or even better, why don’t we stop communicating what not to do, and start coaching what to do. Positive communication is proven to increase morale, encourage good behavior, and provide a sense of purpose. We need to flip the script of how we communicate in our industry. In this article I will discuss the importance of positive communication and how to apply it to your fleet safety program. Communicating What To Do Every industry has its own lingo and ways of communicating. And the nature of fleet management and driver relationships historically has been pointing the finger at drivers for their risky driving behavior. It’s understandable. Fleet managers need to ensure driving compliance, vehicle maintenance, and overall safety standards are met. And because drivers are human, they make mistakes. When it’s time for a quarterly review or feedback, these mistakes are highlighted and put on the “what not to do” list. But there’s a new, more proactive way of communicating areas that need improvement. Instead of making a “what not to do” list, what if we flipped the conversation to communicate what to do? A simple (positive) shift of the verbiage (and mindset). For example, you have a driver who is consistently following too close. Instead of saying “stop following too close”, show drivers examples of a safe following distance and show them how to maintain this safe driving behavior. You can even throw in a reward and say, “ Consistent, safe following distance like this will earn you more bonuses.” Doesn’t that sound a lot more approachable? And also actionable? Now, the driver understands what to do and can focus on that. Success! Setting clear expectations of what the driver should be doing, will make them focus more on the task at hand. It’s more likely for them to act on and positively switch their behavior when they are taught what they should be doing. It’s how the human brain works. Transform Fleet Safety Programs Like I’ve said, communicating “the do’s” and recognizing positive, proactive driving behavior is crucial in any fleet safety program. And if you aren’t already counting this as an important element, you are behind. Coaching drivers in a positive manner simply works better. Take Steve McCormick, VP of Finance from JL Rockroth who said, “What we like with Netradyne is being able to tell the drivers ‘You are doing a good job. For those of you who are not doing as good of a job, here are the things you can do to get better and improve.” And it’s not just JL Rockroth who’s seen results. Many other organizations have seen dramatic improvements in driver behavior when enacting positive, proactive feedback. Communicating the “do’s” reaps benefits like: Improved safety culture Improved driver behavior Increased driver retention Lowered distracted driving Improved compliance Increased profits or decreased claims Let’s take a look at how to flip the script in real life scenarios. The Do’s vs. The Don’ts Here are some real-life scenarios of how to flip the script, when coaching drivers: The Don’t “You’re speeding too much, stop speeding” The Do “You drove 8 hours at or under the speed limit, great job. Let’s talk about how to move that number higher” The Don’t “You need to not follow motorists too closely” The Do “You’re average following distance is 3.9 seconds which is in the top 10% of the company. Do you want to learn more about the benefits of moving that number higher?” The Don’t “You can’t use your phone while driving” The Do “The road already has too many distracted drivers, let’s work on how you might anticipate those distracted drivers” Netradyne DriverStars Our mission at Netradyne is really simple: to create a safer world for all drivers and change the way drivers interact with the road around them. With this mission in mind, we developed what we call DriverStars. As part of our GreenZone driver score, DriverStars make it easy to recognize and promote drivers by identifying examples of positive driving behavior. DriverStars are awarded to drivers in recognition of proactive safe performance and are intended to encourage drivers to consistently practice defensive, safe positive driving behavior. Driveri recognizes certain actions that mitigate unsafe driving situations, automatically rewarding a DriverStar and capturing video to show everyone how it is done! Each DriverStar earned awards points to a driver’s score, and score are an easy way for managers to gauge overall performance and safety. They also provide a clear structure for awarding bonuses. All driver scores compile to create a fleet score as well. Put simply, recognizing this positive behavior not only results in happy employees and better drivers, but also gives fleet managers the opportunity to show drivers what to do. Here are some examples: Created Separation by Slowing Down A DriverStar is awarded when a driver slows down and creates a safety buffer, after another vehicle attempts to merge into the same lane. Moved over for vehicle on shoulder A DriverStar is awarded when there is a vehicle on the right shoulder, and the driver creates a safety buffer by moving over into another lane to avoid a possible accident and comply with applicable laws. Stop Sign Streak Completed This new feature, a DriverStar streak, is awarded when a driver completes 75 full stops in a row. A custom video is played congratulating the Driver on completing 75 full stops in a row. Final Thoughts Remember: alert, responsible, focused, and aware, just some of the qualities that make up a safe driver. How often do you communicate the importance of what to do or give them credit where it’s due? If you are pointing a finger, we suggest giving a thumbs up. From Netradyne, the maker of our Driveri camera, September 30, 2021
19 Apr, 2022
Long before the coronavirus pandemic, stretching back to even before the Great Recession, the notion of a driver hiring crunch was in the air. Back in 2005, the American Trucking Associations (ATA) documented a shortage of roughly 20,000 drivers. The numbers ebbed slightly during the Great Recession as volumes plummeted, but by 2017 the shortage had grown to about 50,000 drivers. And then this recent news: On Oct. 26, The ATA reported that the truck driver shortage will climb to a record high of just over 80,000 drivers . That number may soar to 160,000 in fewer than 10 years. Today, the labor shortage in transportation extends not only to drivers but also to maintenance technicians, loading dock workers, and package sorters. It’s part of an even broader post-pandemic trend encompassing other industries, particularly in service and hospitality. Double whammy: Fleets are now having to compete with other job types that are pulling workers out of the driver pool. “There is an adjustment happening to the labor force, and those other occupations are not immune to what’s been happening in transportation for some time,” says Mark Murrell, president of CarriersEdge, a provider of online driver training for trucking and other fleets. There is a growing sense that this broader market disruption isn’t temporary and is the beginning of a longer-term change. If true, “That's going to require a new definition of what the work is,” Murrell says. “(And) we're going to have to find ways to make the job more attractive.” For fleets, the Code Red alarm has seemingly been blinking for years, and yet the problem only intensifies. While it’s easy to engage in unproductive handwringing, this misses an opportunity to solve it, Murrell contends. Murrell recommends viewing the problem through the lens of driver retention — which is, ironically, good news for fleets. “You're not going to solve the industry's labor crunch,” Murrell says. “But if you can improve your retention by 10% or 20%, that's a lot fewer positions you need to fill.” What can fleets do to improve driver retention? Murrell has a few recommendations. And some require a fresh perspective on commonly held notions. Understand when driver turnover occurs. During the pandemic, CarriersEdge analyzed data across multiple fleets on when driver turnover occurs in the employment cycle. “Conventional wisdom is that most turnover happens in the first 90 days,” Murrell says. “We found that wasn’t the case at all.” Murrell acknowledges that an appreciable number of drivers do quit within the first 90 days, but it's not the largest segment. “What was surprising to us was that the greatest turnover happens after a year’s tenure,” he says. “It may very well be that people are sticking around for a while and they start to stagnate, they don't see any future, or they get bored with the work.” Knowing when turnover occurs informs how and where you act: Survey your drivers. Ask your drivers what they want. Find out the top three things that they like about their jobs, and the top three they’d like to see changed. “Highlight the good things as part of your brand building and when you’re hiring,” Murrell says. “And the things that need to change, start with the low-hanging fruit.” It’s important to survey the new hires in the first month or two. “But don't forget about the people that have been around for five or 10 years and keep them involved as well,” he says, which will provide insights into how and if they’re stagnating. Your seasoned drivers factor into the next tactic: Create a driver advisory board. Gather your more tenured drivers to create a driver advisory board. This group will be your sounding board for implementing changes, finding ways to help build the business, and serve as a collective window into drivers’ wants and needs. Involving your veterans gives them more responsibility and has retention value itself, Murrell says. It’s hard to get a group together these days, but the new environment of virtual video conferencing makes conducting meetings a lot easier. Expand professional development. For professional drivers, defining a career path is not as straightforward as other jobs that involve driving. For instance, the sales rep road warriors have a path to sales executive positions and service technicians can assume supervisory roles. Yet professional drivers will likely have the same job five or 10 years down the road. “The advisory board can really help here by working with management to figure out how to keep workers engaged and give them something fulfilling once they’ve figured out how to do the job.” Murrell says. Knowing when driver turnover occurs will also benefit this initiative. “Most fleets concentrate their professional development efforts within the first year,” he says. “What training do drivers get who’ve been around for three years or five years? The answer is not much.” The development doesn’t have to involve more pay or even a title change — what’s most important is to figure out new challenges and responsibilities that demonstrate a growth path. In addition to the advisory board, veteran drivers are candidates to mentor: “Tap their experience and share it with new drivers,” Murrell suggests. Let your drivers congregate online. The nature of a driving job means less of a connection to a centralized team that congregates daily. “Companies have to work harder on making drivers feel like they’re part of something,” Murrell says. Giving drivers a place to connect online is one solution. “Drivers love Facebook,” he says. “It's a great way for them to connect with their peers and management.” Murrell has also noticed how drivers will self-organize into Facebook groups and pages by region or by the specific type of work they're doing. In addition to chat groups, some companies conduct driver meetings as Facebook Live events. “They can participate from anywhere and they can comment,” he says. “It can be lighthearted, but they can feel like they're part of something and they don't have to show up at the warehouse on a Saturday morning.” Reassess gamification. Rewards programs based on driver metrics, or gamification, were all the rage 10 years ago in the corporate world, though adoption has wanted. Types of jobs with younger workers, such as gas stations and fast food, still use gamification. But the 20-year driver veteran doesn’t relate in that way, Murrell says. “It's fun for a bit, but it ends up being a distraction, and some might get insulted by it.” “We hear from drivers that they don't want to be treated like a child,” he continues. “We’ve found they’d rather be treated like professionals and to build around that assumption, rather than ‘Let's make it a game.’ This is a job, not Friday night with friends.” Murrell warns that rewards programs can’t be used in lieu of compensation, such as accruing points for finishing training or showing up on time. A limited metric-based award system can be effective, however. Going back to driver communication — survey your drivers for honest answers on what’s effective for them. Recognize your drivers. This is an obvious point, but one that needs consistent reinforcement from management because it ends up being overlooked, Murrell says. This works particularly well with veteran drivers because it allows them to be recognized as leaders amongst their peers. Like professional development, this recognition doesn’t have to come with more pay or a title change. But consider branding work gear or even the side of a truck with a senior driver’s responsibility. “That's effectively a career path that doesn’t exist in more formal ways,” he says. re-posted from Business Fleet November 1, 2021 by Chris Brown See The Fleet telematics platforms help you retain your drivers by using GPS or AI cameras to catch them in the act of doing well, allowing you to reward them for good behavior. Not only that, they'll know you have their backs in the event of an accident.
15 Apr, 2022
With scores of GPS tracking systems on the market today and a myriad of options offered by each provider, you’ll need to go through a considerable learning process before gaining the confidence to choose the right system. If you’re still contemplating whether you need a GPS tracking system for your business, then you’re in the right place. This solution provides a host of benefits, from solving safety issues to improving your overall efficiency and accountability. With scores of GPS tracking systems on the market today and a myriad of options offered by each provider, you’ll need to go through a considerable learning process before gaining the confidence to choose the right system. This flow chart will help jumpstart your decision-making process. Once digested, use our GPS Tracking System Guide to dig deeper to understand your needs, understand functions and pricing, and configure a system that will deliver the maximum return on investment (ROI) for your fleet. 1. Understand how a GPS tracking system works. GPS tracking systems gather data from the vehicle, then transfer that information through a modem to GPS satellites and cellular networks to fleet management software servers. Understand your business challenges – safety issues, inefficiencies, vehicle maintenance, high labor, or fuel costs. The challenges you face will dictate the type of solution you will require. Understand the types of data a GPS tracking system can provide, such as location, speed, trip distance and time, idling, driving behaviors, fuel consumption, and engine diagnostics. Know the benefits and limitations of a hardwired tracking device, a plug-n-play (PNP) device, and a smartphone-based system: · Hardwire devices offer the most flexibility in expanded features like gathering engine diagnostics and add-on services like in-cab cameras and sensors. They also provide the most protection when it comes to tampering and theft prevention. PNP devices are the easiest to self-install because they plug straight into the OBD-II port of a vehicle (usually underneath the dashboard). This functionality makes it easy to transfer between vehicles if necessary. However, this does make them more susceptible to easy removal, whether accidentally or intentionally. Smartphone systems are the most convenient since most employees carry one nowadays. Most of these solutions work through apps that employees download. These solutions tend to be the least reliant and When speaking with potential providers, understand their system software functions. Is it easy to configure their real-time alerts (location, motion, speed, geofences) and reports to analyze driver behavior, vehicle diagnostics, and compliance? Will you have a resource such as a dedicated account manager to ensure your ongoing success with the product after becoming a customer who can provide free training and assistance with the system? Insider tip: The amount of time to properly vet a GPS vehicle tracking system will be longer than you think, but doing it properly will save you from headaches down the road. A haphazard effort or a quick look for the cheapest solution could result in the need to switch providers, replace solutions, and restart another lengthy (and expensive) implementation. accurate because of how easy it is for employees to either not login to the app, turn it off, or forget. 2. Clarify your business challenges and needs. Identify your top pain points and business challenges, whether it’s safety, efficiency, or accountability - the challenges you face will dictate what you need in a solution and the types of data points you need to monitor, like idle times, speed, or engine runtime. Ascertain which asset types you’ll track (vehicles, trailers, or equipment) and the number of assets. Consider a system’s ability to scale to your future needs with functionality like open APIs and customizable features. Insider tip: To measure success with a GPS tracking system, use metrics you presently have at your disposal to determine your benchmarks such as vehicle MPG, collision rates, or monthly fuel costs. 3. Take the time to vet providers. Is the provider aligned with the needs of your business? Understand how training works, the parameters of system support, and if you’ll receive dedicated account manager. Investigate which systems can best address your pain points. Get and compare quotes from various GPS tracking system providers. Contact providers’ other clients — those offered by the provider and through your research — for reviews of the system. Insider tip: When deciding on a provider, focus less on the system’s overall cost and more on the value you’ll derive. “You get what you pay for” — while cheaper solutions will cost less upfront, they may limit your ability to scale the system and reap further efficiencies. 4. Know your system’s costs. Understand essential cost elements: hardware, installation, monthly airtime or usage, and feature sets. Your staff’s time to manage the system is a cost too. Is a PNP adequate, or will you need a hardwired device to connect to driver ID, sensor connections to doors and seatbelts, and electronic logging device (ELD) functions? Consider other cost variables such as contract-type and length, number of data points to monitor, vehicle or equipment type, number of units installed, data refresh frequency and integration with other business systems. Understand the costs for enhanced system functions, even if you won’t be implementing them to start. Those include video telematics, integration with your organization’s dispatch, sales, CRM, human resources, and field service management systems. Insider tip: For business fleets, most GPS tracking system packages come with a standard data refresh interval. If you desire a faster or more frequent update interval based on your fleet needs, ask your provider —be aware that your per-month cost for cellular data usage will increase exponentially. 5. Run a pilot. Consider if a “ghost pilot” without driver knowledge is right for you. Define the scope of the pilot and establish criteria to measure success. Pilot in action: Put the provider through a “stress test” by contacting customer service after hours or on weekends to judge responsiveness. Compare expected costs with cost savings realized from the pilot. Insider tip: Installing a ghost pilot involves managing after-hours and clandestine installations. You’ll need to work with your provider to understand if any hardware might be visible to the driver. 6. Introduce the technology to employees. Formally communicate program goals through executive leadership. Assign management-level personnel to manage driver coaching, enforcing driver policies, and disseminating companywide system results. Assign a point person for day-to-day system management to monitor vehicles, schedule and analyze reports as well as liaise with internal management, drivers, and your GPS tracking system provider. Hold individual meetings with drivers before installation; explain how the system will benefit them. Check in with drivers after initial install to gauge their real-world experiences. Insider tip: Metrics-based reward (or “gamification”) programs are a powerful tool to gain driver buy-in. These programs compare system metrics to rank drivers and issue incentives for top performers. 7. Prepare for maximum ROI. Work with your provider to understand what the system is telling you about your fleet. Use that data to formulate and benchmark KPIs and communicate them. Configure alerts to mitigate dangerous driving behaviors immediately. Insider tip: You’ll begin to realize the benefits of a GPS tracking system almost immediately after installation. But don’t stop there — the more you learn from your system and apply new functions to your fleet, the greater the efficiencies you’ll realize above the cost you pay. re-posted from Business Fleet October 5, 2021 by Chris Brown See The Fleet offers varieties of GPS tracking from plug and play, inexpensive, easy to use vehicle and asset tracking, to more robust hard-wired systems with reporting and analytics for larger companies. 
12 Apr, 2022
An average accident can cost a company between $16,000 and $75,000, and skyrockets if there was a fatality. With fleet drivers on the road more than the average person, it's imperative to be aware of all the associated costs. Fleet accidents can be costly. If you put non-CDL drivers out on the road, you face the risk of emptying out your pockets. Even a small accident like a fender bender or clipped mirror can cost thousands of dollars. The problem is, most companies don’t see it this way. That’s because there are both direct and indirect costs for fleet accidents. Let's explore both and how to reduce them. What Does an Accident Cost You? Your drivers face a high risk of causing or being involved in an accident. Look at it this way: The average person drives about 15,000 miles every year. And, each year, they have a one in 15 chance of getting into an accident. Your drivers are on the road much more than the average person. That means their risk of a collision is higher. They could have a one in 10 chance of being involved in a collision or something even worse. What’s more is these accidents are costing you. One accident will cost your company anywhere from $16,000 to $75,000, even if it’s minor and no one’s hurt. That number skyrockets if there is a fatality involved. And guess what, you’re still paying even if it wasn’t your employee’s fault. Direct and Indirect Costs of Accidents The figures we shared may seem a bit high to you. It’s hard to imagine a minor accident costing you tens of thousands of dollars, especially if you aren’t fined. That’s because there are both direct and indirect costs to accidents. Direct costs of accidents are what you pay immediately. Indirect costs are the ones that sneak up on you. The Direct Cost of Fleet Accidents Here are some common direct costs of fleet accidents. These are the obvious costs, but still, they add up quickly. Vehicle repairs Repairs to property damage Fines resulting from your employees’ having a traffic violation Legal representation Court fines OSHA fines Insurance deductible and premiums Workers’ compensation injuries not covered by insurance These costs alone are enough to make a dent in your profit margins. However, the cost of loss doesn’t stop there. The Indirect Cost of Fleet Accidents You pay out of pocket when you have an accident. However, accidents are more damaging to your company than just the direct, upfront costs. The indirect costs of an accident spread like a spider web throughout your company. Consider the following: Increased insurance premiums and deductible Administrative time spent by supervisors, safety personnel, and administrative employees dealing with the accident Loss of time from the employee who was involved in the collision Training a replacement driver if necessary Lost productivity due to rescheduling Damaged reputation and the ensuing loss of business Depending on your business model, loss of business for not getting to a customer location These costs are often ignored or unmeasured, but make no mistake about it — they’re present and they are impacting your business. Accidents Are Preventable The cost of fleet accidents can pile up and overwhelm you and your company. However, there’s good news in all of this. Accidents are preventable. People have accidents when they take too much risk, when they drive unsafely, and when they don’t know proper defensive driving techniques. We shared some statistics earlier about how your employees could have as much as a 1 in 10 chance of causing a collision. Those statistics go out the window if you invest in defensive driving training for your non-CDL or light-duty vehicle drivers.  It’s possible to reduce your accidents to zero.
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