A Catalyst for Supply Chain Profitability

Transportation Service Providers - Safety & Compliance

Look at successful organizations worldwide - they have comprehensive safety and compliance programs. They do because it pays dividends. 

performer

The best performers want to work for a company that has a culture of safety and is profitable. In other words, by maintaining a quality safety program, you implement a  process that delivers increased operational efficiencies and profits, and attracts the best talent. What's not to like? 

Cost savings are re-invested into further improvements, providing a compounding of the competitive advantage relative to your competition.

Being able to identify which elements will provide the most benefit is crucial.  You want to design a program that quickly improves overall financial performance while enhancing the morale of the employees.

The question is - where do we start? Well, we start with an analysis of the company operations and develop a plan. As an example, I frequently find opportunites for my clients in improving their insurance, specifically fleet insurance, program. If you've been in the business more than couple years, I don't have to tell you insurance costs have been steadily increasing  (see the chart below from  An Analysis of the Operational Costs of Trucking: 2019 Update

2019 Insurance Graph

Absolute premium rates have been steadily increasing since 2014, and continue to do so.  Carriers that lack adequate safety programs (as reflected in loss ratios, CVOR / SAFER / SMS ratings, and/or assessments by the insurer’s risk management group) have faced exponential increases in rates, and some are being denied coverage  - which leaves the choice of closing up shop or going to facility insurance, where rates can be as much as 200% higher than market pricing.    Even carriers who are doing OK on their safety scores, but lack the policies, procedures, and documentation to ensure a solid defence in court, should something go sideways (see: nuclear verdicts),  can be looking at 20 - 30% increases. In a market where ever-larger settlements in the courts involving truck accidents are putting an unsustainable burden on the insurance, and reinsurance markets, you need to stand out as a carrier who understands the risks and puts into place a comprehensive safety program that affords your underwriter a reliable, due diligence defense.    

      What you need is Kevlar Underwear: Protect your Assets. 

                                                                  That's what we offer                                                                           

Rate Per Mile by Fleet Size

 

Smaller carriers find themselves paying higher per unit and per mile costs. The difference can be as much as 30% per mile - see infometric (right), again from the 2019 ATRI study. And smaller carriers often don't have the budget for a full time, in house risk management professional. That's where Links Consulting can help. We bring 40 years of experience to your organisation at a fraction of the cost of a full time employee.

Safety as an Investment - Not an Expense 

Putting into place a program that provides a solid due diligence defense also improves driver performance. Result:  lower driver turnover. Lower turn over results in improved morale and lower HR costs. Compound result: reduced costs & improved operational efficiencies.   

How effective can this be? For any fleet with more than 10 vehicles operating in almost any application, by the third year the reduced costs, both direct and indirect, can fully fund a full-time Safety Manager's salary.  

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At Links Consulting, I have successfully implemented this approach numerous times and harvested the results many times over. Bringing my years of experience to your company, together we can build a best practices safety program, enhance and support your existing team, and put into place proven tools, procedures, and policies. I help you keep critical dollars on your bottom line. And most importantly, protect your company and its employees. My programs have been recognized as in the top 3% in Canada by Northbridge Insurance. To the right of this paragraph is a certificate issued where I was the safety manager in 2011. We went on to receive 8 years of best practice recognition in a row. This resulted in very favourable insurance ratings. Our loss ratio, effectively zero. Our driver turnover, less than 8% averaged over the period 2014 - 2019. When you consider that current industry guidelines indicate that replacing a driver costs on average $5,000, if you can reduce your driver turn over by just 10 drivers a year, that's $50,000.00 Now add to that reduced deductible costs, rental unit costs, freight claim costs. And driver turnover is an element in your insurance review. Companies with high turn over ratios have higher accident rates than companies with lower turnover ratios. And that only makes sense. An employee who has been with you for a while is familiar with the equipment, the customers, the routes. They are going to be more efficient, and less prone to accidents. The savings just continue to accrue - to your bottom line. 

This is just one example of how a deep dive into a department can identify opportunties to improve. For each area of your organisation, from HR to operations to compliance to data management (software), improvements will be identifiable.

Have I got your interest yet?  Yes? Awesome - click here to book a time to discuss how we can work together.

No? Hmm well, I'd love to hear what it would take! I invite you to keep looking through the rest of the site. You may still find what you need, including how to quantify your results and report back to your management group on the savings delivered.  Focused KPIs, Iceberg costs, Reputational Capital - they are all key links in making your supply chain resilient, profitable and respected. Send me a note - let's start a dialogue on your needs.