The lives of fleet drivers and the public are of utmost concern to fleet managers. The management and overall elimination of accidents are some of a fleet manager’s top responsibilities.
And, while medium-duty truck accident rates are still high, hard work and the use of advanced safety technologies and safety-related best practices are paying off, with accident rates holding steady, even decreasing in some areas.
“There has not been a significant increase in the accident ratio (number of occurrences over the number of vehicles) of medium-duty trucks or in the number of preventable medium-duty truck accidents,” said Stuart Braun, adjuster and maintenance manager for Fleet Response.
However, while flat, numbers are still high overall. “Based on our database of 50-billion-plus miles driven, we find that collision rates in Class 3-6 trucks remained at a flat, but high rate of 13.6% over the past eight years (2008-present),” said Del Lisk, VP, safety services for Lytx.
But, things are looking up. “In 2015, we saw a decrease in preventable Class 3-6 accidents, the first we’ve seen in a number of years,” said John Wolford, director of client and vendor services for The CEI Group.
Work Truck magazine spoke with several subject-matter experts to get their take on current accident trends in medium-duty truck fleets, as well as the challenges specific to these fleets in reducing accidents and ways to help prevent them.
Repair Costs on the Rise
Overall, repair costs are on the rise for medium-duty truck fleets.
“Body repair costs for medium-duty trucks increased about 4% from 2014 to 2015. Aftermarket parts aren’t as price competitive as in the past, which is driving accident management costs up for medium-duty truck fleets,” said Allison Lanzilotta, executive vice president for Fleet Response.
In addition to truck class, age is also a factor in costs.
“Repair costs continue to vary by the age of the vehicle. When a model is more than two-years old, less expensive aftermarket and used parts are more readily available, with prices that increase more slowly over time. With a model less than two years old, you must rely more on OEM parts, which go up more steeply than the prices for older-model parts. Thus, as fleets replace vehicles with new models, repair costs increase more rapidly,” said Wolford of The CEI Group.
Often Missed Costs: Litigation & Acquisition
One of the biggest costs related to accidents in any vocation is that associated with litigation and overall legal fees.
“Recent trends in transportation litigation verdicts suggest damages claims can have the biggest negative impact on accident management costs. Any fleet that’s experienced even just one severe event knows these types of claims can threaten the continued operation of a fleet’s business,” said Lisk of Lytx.
And, the added costs don’t end just with the legal fees.
“In addition to litigation costs, which can grow exponentially the longer a case is litigated, there are often costs associated with drivers and trucks being out-of-service in the short run and the risk of higher premium costs in the long run,” Lisk said.
Overall, new-vehicle acquisition costs are also on the rise, making it more expensive to replace a potentially totaled vehicle.
“From a purchaser’s perspective, on a retail level, just a few short years ago a pickup truck could be purchased in the $29,000 range. Now, that same vehicle costs upward of the mid-$40,000 range — depending on the model. One medium-duty model currently exceeds $50,000, again retail. With acquisition costs continuing to increase, replacement parts are equally higher with the end user, unfortunately, bearing the brunt of the costs,” said Bob Martines, president and CEO for Corporate Claims Management (CCM).
Agreeing is Braun of Fleet Response, who also noted the increase. “Aftermarket part costs are closer to OEM parts costs, resulting in reduced savings for using aftermarket parts versus OEM parts,” he said.
Cosmetic Repair Concerns
While many repairs are never questioned if they are necessary to keep a vehicle on the road, oftentimes cosmetic repairs are more of a gray area.
“Concern over cosmetic repairs varies by the fleet, and rightly so. When a Class 3-6 vehicle deals directly with the public, fleets concerned about their public image do order cosmetic repairs. These tend to be customer service and rental fleets. When a vehicle is used mainly for internal logistic purposes, fleets are less concerned with cosmetic damage,” said Neuman of The CEI Group.
Also noting public image is Braun of Fleet Response. “The philosophy on cosmetic repairs varies by industry, company, and vehicle use. If there are branding or decals on the vehicle, typically companies are more concerned with the cosmetic repairs and will address these quickly with repairs, versus service vehicles without decals,” he said.
Just be aware of the message you are sending clients.
“We talk a lot with our clients about their brand and reputation, and the loss of brand equity with high-profile collisions, but equally important are the way they show up in the marketplace on a daily basis. Many fleets are concerned that a truck with bent metal or scraped paint can send a message to the client that they’re not dealing with a top-notch company,” said Lisk of Lytx.
Many businesses pride themselves on their commitment to fleet safety, and the condition of their fleet is a reflection of that pride, according to Michael Backman, VP and general manager of U.S. Operations for Mobileye.
“Damage not repaired, whether cosmetic or otherwise, can send a message to their drivers, customers, and the public that vehicles are not taken care of, and possibly are not safe. Particularly drivers: you want them to know the company puts their safety first, and you want them to take pride in their jobs and vehicles. After all, if the company doesn’t take care of the vehicles, why should the drivers?” Backman questioned.
In the end, fleet managers need to carefully weigh the cost with the company’s concern over its public image.
“Most truck fleets have minimal concerns for cosmetic repairs, especially with the trucks in hard driving environments, such as mountainous regions and farm environments, as well as warehouse and internal plant locations. If a company uses a truck to transport their customers/clients, depending on the business, cosmetic repairs may be performed just to preserve the professional image of the company owning/leasing the vehicle,” said Bruce Stewart, claims supervisor and senior adjuster for CCM.
Adopt Best Practices
To combat the rising repair costs, fleet managers are continuing to adopt best practices and focus on safety policies to reduce overall crash occurrences.
“Fleets are implementing a robust safety program with integrated accident program data to assign targeted training to drivers based on top preventable and overall accident reasons in conjunction with top MVR violations. A targeted, comprehensive safety program will help change driver behavior and reduce the frequency, severity, and costs of accidents. We’re seeing more companies with medium-duty trucks begin to incorporate these practices,” said Lanzilotta of Fleet Response.
Working with and coaching drivers through a solid safety program is a proven method to reduce incidents and successfully fight potential lawsuits.
“Emphasis on prevention of collisions in the first place will have the biggest positive impact on accident management costs. The use of video as ‘game film’ to effectively coach drivers on how to improve their skills and help prevent collisions, as well as having video to know what happened if a collision does occur, can dramatically limit accident management costs. If a crash does happen, you are better able to defend a false claim or make informed settlement decisions, such as deciding to quickly settle a claim if your driver is at fault,” said Lisk of Lytx.
But, according to Martines of CCM, truck fleets with a mix of vehicles, including sedans, need to ensure they give their truck fleet the same safety emphasis as their sedan fleet.
“Most companies that have embraced a safety program tend to look at a truck fleet with a bit less concern, mostly due to the nature of their business. Typically, MVRs are pulled annually and/or semi-annually in an effort to be sure the right individual is driving on behalf of the company in an attempt to minimize accidents/incidents. Training is available to educate drivers, but many companies do not emphasize it as revenue is often viewed with greater emphasis than expense,” Martines said.
Fleet managers who are taking more time to review MVRs and a driver’s history are also more prone to spot potential problems before they happen.
“The best practices we see for fleet safety center around understanding driver behavior and proactively addressing poor driving performance issues,” said Kurt Schmidt, senior vice president of Marketing for SambaSafety.
One such best practice, according to Schmidt, is to understand the driving history of all drivers in your fleet — CDL and non-CDL. “This provides insight into potential safety issues, such as habitual speeding, so the fleet manager can address any past behavioral trends and address the issues or provide training on the issue before it becomes a problem,” he said.
And, persistence is key. MVRs and driver records should be monitored often and carefully.
“A lot can happen over a year and continuously monitoring all employees’ MVRs for any changes in status or new violations not only ensures that all drivers have a valid license, it provides ongoing visibility into driving behaviors — on and off the job. This helps the fleet manager to identify specific driving issues and enables them to enforce driving policies and incentivize good driving behaviors. Additionally, given the nature of today’s litigious society and the availability of technology to monitor driving behavior, not knowing one of your drivers has a poor driving record, ” Schmidt said.
To help with the review process, take a look at a scorecard program, which scores drivers for incidents and includes agreed upon consequences for negative actions.
“The ‘scoring’ of MVRs is an effective way of measuring driver behavior trends and provides a standard for consistently applying any company driver safety policies, regardless of the driver’s location,” Schmidt said.
And, to help contain costs, don’t forget to focus on your technicians.
“Skilled and knowledgeable technicians, whether internal or external, who do play a role within their organizations, must be engaged to help the fleet manager manage costs. Typically, truck labor rates are higher than rates of automobiles; however, those higher rates should not apply to light- and some medium-duty trucks. Companies managing truck fleets typically have personnel on hand to handle most mechanical and minor body repairs, which is very helpful. These same individuals can work with a third-party service provider to create programs and management tools to help minimize costs as well. Without a program or trusted partner costs will spiral out of control,” Martines said.
Embrace New Technology
Fleet managers are often early adopters of new and advanced technologies, especially in the safety arena related to helping reduce a driver’s mistakes.
“Almost all collisions are linked to a driver’s mistake. We see fleets trying to tackle this challenge with a combination of technology and enhanced driver training. We find more companies moving away from stand-alone technology and one-time or as-needed driver training, and instead looking to integrated technology solutions with ongoing driver coaching to elevate their safety culture and better prevent collisions,” said Lisk of Lytx.
According to Backman of Mobileye, fleet managers will see more of an impact on their bottom line if they proactively work to prevent or mitigate accidents rather than implementing fixes to address a tragic aftermath — and collision avoidance technologies can do just that.
“New technology to help prevent accidents can have a big impact on accident management costs for medium-duty trucks. If a fleet is serious about safety and better managing their accident costs, what better way than to possibly help prevent an accident from happening in the first place?” said Backman of Mobileye.
Collision avoidance technology is an extra set of eyes on the road that helps drivers know when their vehicle is collision-bound.
“Not only can the technology help prevent and reduce collision rates, but it also encourages better driving practices by delivering real-time feedback to drivers. Even if you’re a good driver, driving conditions can be unpredictable, and by having a safety net system that actively delivers warnings — such as forward collision and tailgate monitoring — good drivers are able to react even better to unpredictable situations,” Backman said.
In addition to in-vehicle technology, new online technology is also helping with driver training.
“As in the sedan fleet world, more work truck fleets today realize they can prevent accidents through online fleet safety programs that take aim at changing their drivers’ attitudes toward safety and their driving behavior,” said Chris Villella, director of account management for The CEI Group.
Newer technology is also more expensive to repair or replace, adding to overall repair costs.
“Since the U.S. Environmental Protection Agency (EPA) requirement to equip medium-duty trucks with diesel exhaust regeneration systems a few years ago, we’ve seen repair costs jump for those vehicles when the system is damaged. These tanks are fitted next to the fuel tank, and when damaged they cannot be repaired. We’ve seen replacement units cost as much as $10,000,” said Greg Neuman, senior manager of quality control for The CEI Group. “In addition, we’re seeing the same trends in medium-duty trucks that we’re seeing in sedans: more computers for engine controls that are more costly and time-consuming to repair and reset.”
An Eye on the Future
Looking to the future of accident management, all of the subject-matter experts agreed that overall repair costs are likely to continue to rise, so the reduction of incidents through innovation and education is key to reducing future expenditures.
“Accident repair costs are likely to rise at a faster rate over the next decade or so, for several reasons. First, in the effort to raise fuel efficiency and reduce emissions, work trucks will contain more parts made of lightweight materials that are more difficult and costly to repair. Second, they will contain more sophisticated electronics, including computers and onboard crash prevention technology. Crash prevention systems will help reduce the number and severity of some kinds of accidents, but when they’re damaged they will add another repair expense,” said Wolford of The CEI Group.
The use of technology and telematics will help reduce this impact.
“Future accident management programs and costs for medium-duty trucks will be similar in principal to the future of other vehicle classes. Fleets are continuing to incorporate more telematics data, online safety training, and robust safety programs to reduce accident ratios and expenses. Truck fleets will likely further develop custom processes around Department of Transportation (DOT) requirements and drug testing, as well as incorporate accident-reducing initiatives like robust safety programs and in-vehicle technology,” said Lanzilotta of Fleet Response.
Backman of Mobileye seconded the place technology has in the future of accident management.
“The future of accident management costs and similar programs are going to heavily center around technology, especially as collision avoidance systems continue to get more sophisticated over the next few years,” Backman said. “It’s also important that, as fleet managers implement new safety solutions, drivers are educated about the benefits of such solutions. Drivers need to know how these solutions can keep them safe and possibly even save their lives. There are so many regulations mandated on drivers that can be a challenge, however, proper training and ongoing communications regarding implementation can be extremely beneficial for all.”
In the end, in the future as is the objective today, total crash prevention is the utmost goal.
“The focus will continue to shift from simply dealing with the aftermath of a collision to more preventative measures. This includes ramping up traditional efforts like training, but also a continued move toward adoption of safety technologies for the vehicle such as roll stability and automatic braking as well as systems focused on improving driver skills such as in-cab video. Safety programs focusing on improving safe driving skills will substantially help prevent collisions,” said Lisk of Lytx.