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Fleet management is a crucial aspect of many businesses today. For companies involved in logistics, for example, managing the supply chain involves reducing all possible risks. Yet, these risks are still apparent and there are many factors at play. Identifying them is a critical step for any fleet manager, especially in ensuring the protection of business assets and non-disruption of service delivery.
Although it’s common knowledge that fleets are exposed to risk, some businesses still fail to get the right protection. So, if you think that accidents won’t harm your business, then it’s time to change this misconception. Here is a list of five risks that every fleet manager should know.
Liability from accidents
Vehicular accidents can happen even if your company drivers are careful on the road. They could become the victim of someone’s negligence, which can lead to serious injury or death. When this happens, your business will not only lose physical assets, but also human assets. It’s costly and inconvenient, especially when the process involves litigation.
Auto insurance usually covers the expenses associated with vehicular accidents. However, the coverage may vary depending on the provider and the exclusions.
Vehicle theft
In addition to accidents, another obvious risk for auto fleets is theft. It can happen at any point during transit, or even while parked on company premises. Yes, insurance can cover loss for theft as well, but it’s always best to put in place preventive measures. Nowadays, many companies use an automated fleet management system. It leverages technology to check, track, and locate company assets that are in transit. Most company vehicles today are already GPS-enabled to ease recovery in case of theft.
Regulatory requirements and fines
Regulatory requirements can sometimes pose challenges for fleet managers. These protocols often change from time to time and vary according to location. When company vehicles need to cross state borders, they need to comply with these regulations. Some regulations apply to cargo as well and breaching these guidelines could lead to costly fines. Not only that, there’s a risk of cargo confiscation which will cause significant business loss.
Decreased productivity
Low productivity is a fleet risk because it leads to financial loss. Many factors come into play here. One would be the inability of drivers to choose the best or shortest route. Another would be little accountability imposed concerning meeting deadlines. Bottlenecks and overlaps in the logistics chain can also decrease output.
Effective fleet management involves the ability to identify and resolve these problems at the source. If possible, managers can use technology that allows them better visibility and control over fleet activities.
Lack of competitive advantage
Technology is the way of the future. Logistics companies and auto-fleet managers that don’t acknowledge the importance of technology will lose against the competition. Most clients today prefer to conduct business with companies that capitalize on modern tech trends. Automation and smart asset tracking are only two examples of how to update an auto fleet. By using these modern techniques, you gain a competitive edge against other businesses in the industry.
