© 2010. The CEI Group, Inc.

Creating and Managing a Best-In-Class Fleet Safety Policy

Pete MitchellSenior Manager, Account Development

The CEI Group, Inc.

November 17, 2010

© 2010. The CEI Group, Inc.

What Is a Fleet Safety Policy?

It’s a document

Must be tied to an action program

Primary purpose of both: To reduce/prevent fleet accidents

83 percent of fleets have one, 17 percent don’t* *(Fleet Management Newsletter, July 10, 2010)

© 2010. The CEI Group, Inc.

The Fleet Safety Challenge

Fleet accident frequency: 6X the general driving public’s

NHTSA*: 620,000 fleet vehicle accidents per year Fleet accident rates: 10 to 40+ percent per yearWhy? Fleet drivers log more miles (20-25,000 per year vs. 12-15,000)

Motor vehicle accidents: leading cause of workplace fatalities

2002-2007: 1,371 workers per year (U.S. Bureau of Labor Statistics)

NAFA: 50 percent of all fleet accidents are preventable

*National Highway Traffic Safety Administration

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Accidents Are Expensive

NETS* (2003): They cost business $60 billion per yearPhysical damage

Medical expenses

Worker’s compensation claims

Lost productivity and revenue

Insurance premium increases

Administrative overhead

Liability: third-party claims

*Network of Employers for Traffic Safety

© 2010. The CEI Group, Inc.

NETS Employer Accident Cost Worksheet

Indirect costsSupervisor’s time (rescheduling, making special arrangements)

Fleet manager’s time to coordinate vehicle repair, replacement

Reassignment of personnel to cover for missing employees

Overtime pay (to cover work of missing employees)

Employee replacement

Re-entry and retraining of injured employees

Adminstrative costs (documentation of injuries, treatment, absences, crash investigation)

Inspection costs

Failure to meet customer requirements resulting in loss of business

Bad publicity, loss of future business

© 2010. The CEI Group, Inc.

Accidents Are Expensive

Average total cost of accidents (NETS, 2001/ NHTSA, 2002)

All: Fatal:

Breakout of average accident cost (NHTSA)

Physical damageLost productivity: Medical costs:AdministrationLegal: Other (e.g., premiums, taxes)

$ 16,500/ $11,229$ 504,408

$ 3,720 $ 3,646$ 1,988$ 925$ 678$ 272

© 2010. The CEI Group, Inc.

Fleet’s Biggest Hits: Negligent Entrustment Definition: Trusting a dangerous driver on company business

DUIsSuspended licensesHistory of frequent violations and accidents

Court punitive awards in the millions*2007: Florida trucking company, $11 million settlement2002: Tennessee transport company,$6.8 million jury award1994: New Mexico company, $2.6 million, even though driver found NOT at fault!

* Source: Risk Management Magazine, June 10, 2010

© 2010. The CEI Group, Inc.

Having Fleet Accidents Is Like Losing Sales or Tax Revenue

Operating Sales Needed to Profit Margin Replace Profits

Average Accident* Fatal Accident

20% $ 56,495 $ 2,500,000 10% $ 112,990 $ 5,000,000 5% $ 225,980 $10,000,000 2% $ 564,950 $25,000,000

*At average total cost of $11,229

© 2010. The CEI Group, Inc.

It communicates to drivers Clearly written

Use active voice Uncomplicated sentences, short paragraphsAvoid “legalese”

Attractively presentedAvoid small type faceProfessional layout and design

Easily understoodEasily and readily available

Hallmarks of a Best-In-Class Fleet Safety Policy

© 2010. The CEI Group, Inc.

It’s comprehensive

Addresses all major safety issues and causes of motor vehicle collisions

It’s communicated to all drivers (regular fleet, grey fleet, authorized secondary

drivers)

Hallmarks of a Best-In-Class Fleet Safety Policy

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It’s actually communicated/marketed

Distributed to all drivers

Drivers sign off

Revisions distributed

Regular communications with drivers

Hallmarks of a Best-In-Class Fleet Safety Policy

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It’s driven from the top

Senior management commitment

Tied to company/organization strategy

Senior management communications

Hallmarks of a Best-In-Class Fleet Safety Policy

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It’s enforced

Uniformly

Without exception

On a timely basis

 

Hallmarks of a Best-In-Class Fleet Safety Policy

© 2010. The CEI Group, Inc.

Components of a Best-In-Class Safety PolicyStatement of Purpose/Mission Statement

DefinitionsTermsRolesResponsibilitiesAuthority

Identifies standards of acceptable driving behaviorEstablishes accident reporting proceduresTraining requirementsPenalties for policy violationsGood driver reward program

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The Mission Statement

Ideally, from the CEO

The purposes, goals of the policy

The importance of safe driving to all

© 2010. The CEI Group, Inc.

Sample Safety Policy Statement

To our employees:

Vehicle accidents can cause serious injury and undue hardship on you and your families, and have a negative impact on our company, both as a community of co-workers and as a business. It is the policy of (name of company) to achieve the greatest practical freedom from accidents and to ensure that every employee is provided safe and healthful working conditions. We have begun a fleet safety program to reduce and prevent accidents. We will, as always, comply with all applicable regulations and expect all drivers to drive safely and obey traffic laws. Safety is a priority. Your cooperation and help are needed to make our program a success.

Signed,President

© 2010. The CEI Group, Inc.

Roles, Privileges, Responsibilities and Authority

Approved drivers

Who they are: regular fleet, “grey” fleet, secondary drivers

Drivers license requirements

Vehicle and use

Nature of vehicle (equipment, assigned or driver-acquired)

Permitted uses: (i.e., business, personal)

Reimbursing fleet for tickets, camera violations, etc

Fleet and safety management

Supervisor/management responsibilities

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Standards of Driving Behavior

Obeying all traffic lawsKey safety issues:

Seat belts

Impaired driving

Aggressive driving & Speeding

Distracted driving

Cell phones

Texting

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Accident Procedures

At the accident scene

Calling emergency personnel

Data gathering

Answering police questions

Reporting to fleet

Required time frame

Who and how to notify

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Enforcement

Enforcement thresholds

Events

Points

How events/points are cleared from the record

Nature of penalties

Required remedial training

Loss of driving privileges

Termination

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Securing Driver Compliance: Enforcement and Recordkeeping

Communicate changes in driver status/score as they occur

Enforce the policy

Uniformly

As soon as possible

Without exception

Uniform enforcement is vital to defense against fleet liability

Document every intervention with drivers

Retain all records

Your audit trail for legal defense

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Good Driver Reward Program

The importance of recognition

Types of rewards (not necessarily costly)

Examples: point or monetary awards, vehicle upgrades

© 2010. The CEI Group, Inc.

Creating Your Safety Policy

Fleet management has primary responsibility

Involve all relevant departments to secure buy-in

Risk management

Human Resources

Sales & Service (managers and drivers)

Legal

Procurement

© 2010. The CEI Group, Inc.

Creating Your Safety Policy

Use examples to get you started

Make it uniform across all divisions and locations

Level the playing field by jurisdiction

© 2010. The CEI Group, Inc.

Managing Your Policy Document: Annual Reviews

State laws and Federal regulations changeNew technologiesNew trends in your fleet can emergeThese may require new policies, like:

MVR reporting requirements

Policies on secondary drivers

Use of electronic devices

New reimbursement procedures for accidents and fines

New policy provisions should be communicated immediately