Risk Management Structures For Trucking Company Success
Risk Management is one of the most important factors for a successful trucking company. It is our top priority for pristine operations and on-time performance. Here are some tips AJG Transport uses in order to stay ahead of problems before they happen and gain momentum for continued success.
1) Safety Risk Management
When it comes to safety your FMCSA governmental regulations are only the start. In comparison to a house, a moving commercial semi-truck is exponentially riskier. Moving throughout traffic daily, driver fatigue and mechanical issues are just daily worries that any trucking company has to think about, minute to minute, in order to mitigate this risk. Risk is lessened by the following, Visibility, Communication, and Pre-Planning.
Visibility - When you have updates in real-time for your trucks, you vastly decrease the number of mishaps that are overlooked. From GPS signals to OBD2 Port plug-ins, all are necessary to see your truck’s speed, engine faults, and location for their pristine performance.
Communication, consistently, is a risk management technique AJG uses for prime performance. Calling drivers daily or even hourly, in some situations, gives them the communication and care they need to do their job correctly without the risk of “mind-fog” or other complacencies.
Pre-Planning for truck safety is also a huge factor when preparing for long hauls. Providing necessities, such as fuses and extra gladhand seals, inside of each unit will continue to come in handy whenever your drivers run into small issues on the road. Keep a fuse guide, as well, inside of the truck, or send pictures to your drivers regarding simple fuse locations. Drivers will show you how much experience and care they have in your company by how much pre-planning they do.
2) Financial Risk Management
The Trucking Industry has a big financial barrier to entry. You cannot just pick up a truck with a million miles for $15,000 and hope to make the necessary profits to fit your lifestyle. When it comes to trucking, the risk you manage is by the type of truck you buy, the drivers you use, and the cash you keep in hand, just in case.
Every growing company knows that the structure is only as good as its foundation and safety net. In this industry in order to be successful, your initial mechanical budget should be double what it currently is, at any given point. There are going to be issues on the road, as well as long term payments that will continue if the truck is not operational for any given time. Always worrying about insurance, truck and trailer payments, personal payments, as well as the future mechanical issues, is already a taxing endeavor. Start with a healthy sum of money or even the ability to retrieve the money at any given time. Fuel accounts definitely assist with this type of saving becoming a monthly payment rather than an upfront expense. Trucking is not short of expenditures when it comes to fuel, driver, factoring, etc.
3) Driver Risk Management
Drivers are the arms and legs of any trucking company. A good responsible and loyal driver is definitely worth their weight, however, a bad one can just as quickly destroy your margin and bottom dollar. Screening drivers is extremely important in this risk management position, being able to have a transparent professional relationship will be the key to consistent profit gains throughout your operations.
Small tips when recruiting drivers - Ensure they know the worst-case scenario. Be sure your driver is aware of how much communication you must maintain between each other on a daily basis. If you just leave a driver to their bearing you will not be successful, set extensive daily times you will be checking on their well being and mentality. There is nothing more dangerous than a driver who is not in the correct mental or physical state operating a vehicle with 75,000-pound gross vehicle weight.