Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: https://read.dmtmag.com/i/251785
Controlling A nytime you arrange the movement of freight on a highway, you take on a certain amount of risk that a catastrophic accident could occur and your business — or in rare cases you personally — could be named in a lawsuit. With the price tag of settlements and convictions well surpassing basic insurance limits these days, one bad accident could result in the end of your dreams. At the same time, overly complicated safety expectations may limit your pool of available motor carriers to utilize, making it challenging to balance out risk with reward. ESTABLISHING RISK CONTROLS In order to establish sound risk controls, write out a policy that will be followed to select new motor carriers as well as protocols for monitoring motor carrier performance. During this process you want to spell out what makes a motor carrier great to you and your clients. Remember to consider safety performance as well as operational performance when establishing these performance standards. If the motor carriers you use are very safe, yet fail to deliver the goods when promised this could lead to you "safely" going out of business! When setting up safety performance criteria, remember to check CSA scores, safety ratings, and out-of-service rates along while ensuring the motor carrier meets or exceeds the minimum insurance requirements required by law. RISK TRANSFER Aer you've established a selection and retention policy, ensure you obtain a strong, risk-transfer contract you can use with the motor carriers who meet your qualifications. Contracts with hold harmless and indemnification clauses in your favor should be utilized whenever possible. ONGOING RISK CONTROL Perhaps the single most damaging risk to logistics firms is the lack of monitoring motor carrier performance over time. While an initial "vetting" of a motor carrier does you well, failing to monitor the motor carrier's performance over time could lead to your demise. Establish a timeline for when you will review the performance of the motor carriers you do business with. is could range from monthly to biennially depending on your risk appetite or their performance. ere are many organizations that provide this service, however make sure service providers give you the information you require in your performance criteria. You may also consider establishing checkpoints with your heavily utilized motor carriers, such as annual contract renewals where both parties can review the motor carrier's performance over the past 12 months. At the end of the day, understanding all of your exposures to risk and designing appropriate risk controls that fit your appetite for risk can protect your company's assets while also providing a strong working relationship with the motor carriers with whom you choose to do business. W I T H M O T O R C A R R I E R S THE SINGLE MOST D A M A G I N G R I S K T O L O G I S T I C S F I R M S I S T H E L A C K O F M O N I T O R I N G M O T O R C A R R I E R P E R F O R M A N C E O V E R T I M E . " " 18 IT MAGAZINE V o l . 8 , N o . 1 Aaron Lilach, CSM, Owner Assured Services, LLC Simplifying a Complex World 262-345-7955 aaron@assuredservicesllc.com assuredservicesllc.com BY AARON LILACH