The transportation industry looks set to kick into high gear as demand for goods escalates. Yet given the countless challenges posed by lockdowns, riots and soaring fuel prices, many fleet owners find themselves in delicate territory as they attempt to mitigate increased risks while still fulfilling their commercial obligations.
Like many industries, the transport sector was hit hard by Covid, which forced many fleet owners to make staff cuts in order to stay afloat – a problem that has been further compounded by rapidly increasing fuel prices and soaring overheads. As a result, many have had no choice but to operate with a reduced workforce, thus putting increased pressure on drivers and prioritising delivery over day-to-day fleet maintenance.
Juggling this perfect storm of challenges is far from easy, and it’s here that insurance brokers can make a fundamental difference, helping clients to understand the fundamentals of risk management, and offering critical insights that enable them to pre-empt potential complications.
Here are a few key pointers for brokers looking to tackle the unique and evolving challenges of an industry in transition….
Driver management is key
Undoubtedly, the biggest risk facing fleet owners today is the management of their drivers, who are entrusted with the transport of costly goods over long distances. With many having to operate with a reduced workforce, drivers can often be pushed to the limit, resulting in exhaustion and, inevitably, accidents. Additionally, with overheads at an all-time high, many fleet owners simply don’t have the resources to oversee their company’s most critical asset, and thus aren’t able to keep tabs on dubious driving habits, which can put any consequent claims in peril.
For brokers, it’s fundamental to understand the unique challenges of each business and put in place appropriate solutions to reduce pressure on drivers and incentivise best-practice behaviour. For some, this might mean the introduction of new technology like AI-based dash-cams, which can be programmed to deliver alerts in the event that a driver is using a cellphone behind the wheel, or taking an alternative route to avoid toll payments. In other cases it might simply come down to incentivising drivers by introducing reward and penalty systems, which can prove invaluable in terms of reducing the temptation to take short-cuts.
Stay on top of industry trends.
Staying ahead of the game is critical, as brokers armed with industry insight and foresight are able to quickly pinpoint potential difficulties ahead of time. By identifying potential hijacking hotspots, dangerous routes or potential strike or riot action, brokers can pre-empt problems and enable clients to circumnavigate any unforeseen complications. By staying informed, be it via social media groups or using key industry contacts, brokers can prove invaluable in terms of mitigating day-to-day risks that fleet owners might face.
Balancing risks and rewards.
One key way in which brokers can alleviate financial pressure and free up clients to take care of the fundamentals is by optimising their insurance policies on the basis of their business model. It’s critical that brokers immerse themselves in the client business in order to maximise potential gains without increasing risk.
Insight and foresight are the two most important qualities that a broker can bring to any business. By understanding both existing and potential risks, they can make an immensely positive impact on this struggling sector and turn quick wins into long-lasting gains.
