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RISK MANAGEMENT: The eight-step BusinessCar plan for reducing exposure to risk

Date: 27 June 2011

Risk management is essential for ensuring fleets fulfil their duty of care obligations as well as making firms as productive as possible. Rachel Burgess looks at eight ways fleet managers can help themselves

1) Risk auditing

Risk auditing your fleet gives a clear picture of where the most effort should be focused and how well existing procedures and policies are working, according to Ken Bowling of Driving Risk Management.

RAC Risk Management, winner of BusinessCar's risk management award 2011, "offers fleet operators vital insights into the safety and efficiency of their fleets". Its boss, Marcus Noble, says: "Every type of analysis starts with, 'Where are we now?', followed by 'Where do we need to be?' The fleet operation has become so complex and risk is affected by so many variables, the person responsible really needs to know where to start.

"To help a client establish where they are now, RAC Risk Management will send along an assessor to go through all aspects of the fleet operation. They will determine the exact nature of current road safety and loss-control management practices, produce a detailed overview report of these practices, make recommendations that improve control over the whole spectrum of the road transport operation, and guide fleet managers through the maze of legislation and legal obligations."

Noble adds: "Risk auditing provides fleet operators with a clear guide as to how well they are managing vehicle use and driver performance. There isn't a fleet in the land that doesn't want to burn less fuel, spend less on tyres, reduce its drivers' exposure to risk and eliminate incidents. Risk auditing is the most effective first step towards those goals."

2) Driver training

Training drivers is an essential part of risk management, whether it is online or in-car. Paul Holmes, fleet director at AA Drivetech, says it is essential to check the status of drivers' licences (see number '4', below) and previous claims history to see who will give companies the biggest headache. "We regularly work closely with clients to analyse this sort of information, which enables us to create bespoke training plans that really work. If you don't go through this process you could be wasting both time and money deploying inappropriate training," warns Holmes. "It's crucial to get to the riskiest drivers first though, as they are guaranteed to produce the biggest amount of pain for you."

James Sutherland, chief executive of training firm Peak Performance agrees: "From our point of view there's only one way to start the risk management process - get into the minds of your drivers and identify those who are more likely to crash."

Sutherland claims that, following drivers undertaking risk assessment including psychometric tests, it is possible to change the behaviour of "even the most sceptical, serial violator".

"The trick is to put them alongside professional trainers that know about behavioural psychology," he says.

Online training is an important tool, according to E-training World managing director Graham Hurdle, because fleet driver training is about attitude, not teaching people to drive. However, he warns against isolated training, which only gives short-term results: "This is why we've launched our online modules. These cover areas such as eco driving, speed awareness, mobile phones and other distractions. Using modular online training enables companies to instil a culture of better driving and fewer accidents across their fleet by providing short bursts of training every month, and this is where the future of fleet risk management is now heading." ?

3) Telematics

Smart telematics technology is a simple way for companies to demonstrate best practice and help fulfil their duty of care obligations to staff, according to TomTom Business Solutions director Giles Margerison. These systems provide detailed logs that show who was driving, how long for, how fast and whether they were driving responsibly.

"Many fleet operators even integrate their telematics systems with their workshop data because the system can deliver accurate mileage reports, which can then be compared to servicing records. This makes scheduling the maintenance bookings a simple task.

"Systems don't have to be expensive or complicated but can offer one of the most appropriate tools to meet your DoC responsibilities and protect your business against the potentially crippling consequences of a prosecution," Margerison adds.

Bowling agrees that telematics can be very effective in helping to monitor a fleet's performance and to support further training of drivers who are found to be driving outside the desired ranges (over revving, harsh braking etc). However, he warns: "Good communication from management is crucial in overcoming resistance to this technology and getting the buy-in from drivers."

4) Licence checking

When BusinessCar carried out a Freedom of Information Act request that revealed that many Government departments weren't licence-checking business drivers sufficiently, it sent waves through Whitehall. As a result of the investigation, ACFO launched a best practice guide for document checking with many Government departments pledging to incorporate it into their operations. And with one-in-seven drivers having points on their licence, according to the latest research from software firm CFC Solutions, which has an automated licence-checking system, it is vital businesses understand the need for regular licence checking.

The firm says the number of drivers highlighted by Licence Link who should not have been driving at all has been low. However, there has been some worrying instances. "Sometimes these employees are acting maliciously by, for example, not declaring a ban to the organisation as the implication is likely to result in the termination of their employment. At other times, they may have been simply confused over which classes of vehicle they can drive. In all cases, they represented a risk management issue to their employer," according to CFC's research.

Managing director Neville Briggs says: "Regular licence checking is a key element of any sound, fleet risk management policy for two reasons. Firstly, it allows you to ensure that your drivers are legally allowed to get behind the wheel of one of your vehicles and, if they have a lot of points, whether they are close to receiving a ban. Secondly, through the number of points on each licence, it provides a general indicator of which drivers are likely to be problematic in risk management terms in the future."

5) Mobile phones

Mobile phone use in cars is a contentious issue. Last year, BusinessCar reported that companies including BP, Sainsbury's, Pirelli and GE Capital had banned all phone use.

Bowling says: "Company policy has to be clear to all drivers. It's now widely acknowledged that using a mobile phone, even with a legal hands-free kit, reduces a driver's ability to concentrate on driving, and the chances of having a collision are substantially increased."

Indeed, research from the University of Utah in 2010 showed that the performance of 97.5% of drivers is noticeably impaired when using a hands-free mobile phone. They took 20% longer to hit the brakes when needed, in simulated driving conditions, while following distances increased by 30% as they failed to keep pace with traffic.

A previous study commissioned by Direct Line Insurance and conducted by the Transport Research Laboratory found that reaction distances at 70mph was worse when using a hand-held mobile phone compared with a hands-free. But both reactions were worse than if the driver were at the maximum drink drive limit.

But Nigel Grainger of Fleet Risk Consultants adds: "It is not always about banning the use of them. They do present risk, but that risk may be manageable. Consider the risks and your business needs, and have a clear policy and stick to it is my advice."

6) Grey fleet

Drivers using their own cars present a significant risk to fleet managers. Bowling points out that even though the grey fleet vehicles are not owned by the employing organisation, it still owes a duty of care to those drivers and other road users, if those vehicles are being driven for work purposes.

"An employer will need to establish if the driver has a legal licence, if the vehicle is correctly taxed and insured for work purposes, is MOT-compliant and is receiving regular servicing in accordance with the maintenance schedules set down by the manufacturer."

Grainger warns: "This is a potentially big area of risk as your controls are limited to spot checks and document checks. Have a very robust policy and stick to it rigidly or these vehicles will land you in hot water."

One solution for grey fleet issues is the use of daily rental in its place. Fleet expert Colin Tourick says: "It makes good sense from a risk management perspective to require employees to use rental cars rather than their own cars for driving on company business."

Rob Ingram, director of business rental at Enterprise, says: "Many firms that rent will often have a process in place to review drivers' licenses for any additional penalty points or issues. The maintenance of the vehicle pretty much speaks for itself - rental cars are cleaner, maintained, roadworthy, taxed etc. It's also easy to select a vehicle that actually fits the needs of the journey travelled. For example, a large saloon for sales samples, or a small three-door vehicle for a simple local errand."

7) Tyres

Tyre safety checks on company cars and vans by Kwik-Fit Mobile typically reveal that about 20% of vehicles require immediate attention.

That means that, across the UK's three million-strong company car and approximately one million van parc, up to 800,000 vehicles could be running on at least one unsafe tyre, according to Kwik-fit Fleet sales director Peter Lambert.

Typically tyres maybe under or over inflated; tread depth maybe below, or close to the 1.6mm across the central three-quarters of the breadth of the tyre and around the entire circumference legal limit; tyre wear could be irregular, which may indicate a wheel alignment or vehicle loading problem; or the wall of a tyre might be damaged.

Lambert says: "Ensuring tyres meet the legal requirement is a vital part of any corporate risk strategy, but the human aspects in terms of safety far outweighs the legislative situation.

"Companies must not be complacent. After the first check has been carried out a lower proportion of replacement tyres need to be fitted during each safety check because the unsafe tyre problem is under control."

Best practice suggests that drivers should check tyres at least once a month or every time they fill up with fuel, he concludes.

8) Winter planning

Adverse weather conditions in bad winters have caused plenty of issues for businesses in the past couple of years. Simon Elstow, head of training at IAM Fleet and sister company Drive & Survive, says there should be a simple set of instructions for before drivers turn the key in the morning: "How does a driver do a risk assessment before a journey? Is it written down? For example, tell drivers where on the web they can get severe weather warnings."

He continues: "You can also look at what vehicles you buy. For example, a rear-drive automatic is a recipe for not going anywhere in the snow. Look at what kit is placed in each car. Is there a torch? Perhaps you don't want to carry a shovel and spare warm clothes all year, but maybe the driver should add this in bad weather?"

As well as considering vehicle choice carefully, fleets must take stock as to whether winter tyres or snow socks are necessary, says Bowling. And advice to drivers on what to carry with them for their personal health and comfort in case of serious delay in freezing weather conditions may be apposite.

"Obviously, consideration needs to be given to what constitutes an essential journey and whether an alternative means of travel could be undertaken more safely," he says.

Grainger adds that winter planning should start now: "Winter tyres ran out last year. Winter tyres work best below 7°C so that is about October. Have your storage solutions and providers planned for now and tell your staff what your policy is."