Building the Ideal Fleet Assessment Report

NHTSA 2012 OverviewOne of the vital tools used in the insurance world is the initial risk assessment report.  This report helps underwriters get a very clear understanding of the activities of a given company, and how that management team handles safety processes to avoid injuries or physical damage.

An assessment report will typically cover all areas of concern depending on the nature of the business being insured:

  • A report for a warehouse operation may focus mainly on the potential for fires, the combustible nature of goods being stored, the controls to prevent fires and the processes in place to provide early/prompt alarm if a fire were to happen.
  • A report for a manufacturing operation may focus on how equipment is safeguarded to prevent injuries, how vapors or fumes are ventilated to prevent explosions or work-related illness by chemical exposure.

When dealing with companies which operate fleets of cars, vans, trucks and/or heavy duty vehicles there are a lot of issues to consider – especially since the drivers and vehicles will be operated out of sight of supervisors who could offer coaching and helpful correction when safety complacency develops or bad habits might be formed.

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I asked peers to give me their perspective on creating the ideal fleet survey report, and I received very gracious and thoughtful responses.  Here are several that characterize the general consensus:

The two most important attributes covered in a fleet Loss Control report would be 1) evaluating the proactiveness of Management 2) evaluating the implementation of an effective fleet safety program.  I feel there are many sub elements that fall under these two categories, but these are the two most important attributes to evaluate.

A solid loss control report must cover several key data points like:  qualifications of the safety director (his/her support, experience, authority); a robust driver qualification process with uniform standards; driver education processes; a program to address the readiness of the vehicles; a review of past losses to identify patterns or trends.

A thorough evaluation of a fleet operation could cover many areas depending on the nature of the business. For instance, a trucking company should be in compliance with Federal Motor Carrier Safety Regulations at a minimum; however, a company with mostly salesperson’s cars or executives may need to focus more closely on distracted driving prevention, weekend use, and other factors like passenger policies or permissive personal use.

Considering fleets can have a wide range of exposures to loss, it can be helpful to begin by identifying the nature of the cargo most commonly carried – the attributes of these loads (hazardous chemicals versus boxes of oatmeal) will determine the relative risks in the event of a collision and the need to ramp up management’s vigilance over driver qualification, training and monitoring.

We’ve learned that most crashes happen as a direct result of driver choices, attitudes and habits.  Whether the driver is impaired, drowsy, or just has the flu, can directly lead to a crash from inattention.  In long haul fleets, drivers may be away from their families for two weeks or more – this can lead to additional stress when they call home to find out the roof is leaking again or the oven is broken, etc.  Having an assistance plan in place can help these drivers cope and stay focused on their driving instead of what is simply out of their control at the moment.  Distraction comes in many forms – not just cell phones – and daydreaming can become deadly in the wrong place at the wrong time.

It’s all about management attitude, leadership, setting and enforcing policies.

Does the account have the following policies (long checklist including cell phone, seatbelt, incentives for crash free driving, permissive use drivers, passengers, DUI forbidden, etc)

How does the account on-board new hires?  Do they have a formal training program, and if so, how many hours in classroom and how many hours behind the wheel?  If they’re not committed to training, they’re likely to have more crashes than the average fleet.

In the past, SafetyFirst has put together example checklists for fleet surveys, and we’ve spoken extensively about the ability to use the ANSI Z15 standard as a self-audit tool for enhancing existing fleet safety programs.  There’s no short answer to evaluating a fleet operation whether it’s five cars or five hundred tractor trailers.  Still, there are many areas that professionals can agree are important to painting a detailed picture for underwriters (and to help offer meaningful guidance to policyholders based on the evaluation process).

MirrorPoster_72dpiI’d suggest the following outline for an example loss control evaluation of a regulated fleet.  It’s NOT intended to be completely comprehensive since every fleet is unique, and we could easily double the length of the outline and still miss some details like asking whether drivers stop periodically to check for cargo shifting, if the policyholder has a formal inspection program to assure that all first aid kits and fire extinguishers are fully stocked/charged, etc. It’s not that these details are “unimportant”, but there’s an upper limit on the patience of a policyholder to remain calm under a relentless assault of questions.

Take a look and offer some thoughts – is this getting a good “big picture” view of most fleet operations?  Is there something in your experience that we’ve missed that should be considered “elemental” and included?  Have we suggested items that you think are trivial?


Loss Control Report
Company name: DOT number:
Contacts: Phone/email:

Overview of Operation

  • Description of company focus, operations, scope of service territory, multiple locations/terminals?
  • Workforce stats
    • Number of drivers (Full time vs. Part time (if any))
    • Balance/percentage of OO vs Company drivers
  • Equipment types operated (reefers, tanks, dry van, tautliners, etc.)
  • Describe commodities hauled – typical versus occasional (define occasional)
    • Are there forbidden cargo types (describe) how monitored?
    • Hazardous Materials and Oversized loads being hauled? If so, how much/how often
    • (include report supplement)

General Management Controls, Policies/Procedures

  • Safety Director
    • Chain of command (where does safety fit in)
    • Authority of safety to make and implement recommendations
    • Qualifications (ongoing professional development)?
    • Networking?
  • smc 1Any examples of recent changes made to improve safety processes?
  • Who authors and revises policy/handbooks, etc.
    • Revision schedule
    • Benchmarking of best practices by peer group?
  • General controls
    • How are control policies memorialized?
    • How are control policies communicated?
    • How are control policies acknowledged by drivers/operators?
    • How are control policies enforced?
    • Provide an overview description of each of following:
      • Cell Phone/Texting/Distraction
      • Fatigue/HOSMotor Carriers Guide to Improving
      • Wellness/EAP
      • Substance abuse
      • Family support
      • Communications program
        • Methods (newsletter, emails, surveys)
      • Education Program (describe each, vendor used, frequency, etc.)
        • New hire
        • Ongoing
        • Post Crash
        • Other?
      • Incentives/Bonus?
    • Standing Safety Team/Committee?
    • Post Crash Review Processes
      • (team, individual?)
      • Preventability (standard used?) versus at-fault

Regulatory Concerns (CSA)

  • Some parallels worth examiningWho monitors SMS/BASICs (satisfied with current score?)
  • Last login within past 30, 60, 90 days?
  • Describe audit history
  • Any notice letters within past 24 months?
  • Familiar with and using Safety Cycles for BASICs?

Asset Controls

  • Describe approach to maintenance – in house, OO, contracted, etc
    • Describe controls over maintenance operation – how does management know it’s getting done
    • Annual FHWA inspection process (If in-house Annual Inspections are being completed are the mechanics properly trained?)
    • Provide garage/mechanical/fuel/body shop/warranty services to others? (if so, attach supplemental report)
  • DVIR processes used – who maintains and purges records?
  • Participate in CVSA programs?
  • Equipment replacement program (owned assets)
  • Any example of corporate changes that affect assets, specifications, retention, etc.?

Featured Image -- 1451Drivers

  • Recruiting
    • Internal/external team
    • Sourcing types
    • Job descriptions
    • Stated Minimum-qualifications (what are they, how enforced?)
    • Are exceptions granted (if so, under what circumstances and sign-offs?)
    • Recycle rejected candidates? Black box candidates?
  • Qualification/Onboarding
    • CoachingIn-person interview?
    • Application form used is detailed?
      • Online capabilities?
    • Pre-hire MVR review? FMCSA PSP Program Review?
    • Describe orientation process; follow up interviews/surveys, etc.
    • Mandatory initial training? (topics, duration, etc.)
  • Renewables program (DQF Maintenance)
    • Who handled DQF processes – methods, practices, self audit?
    • Describe annual performance review process
    • COVR reconciliation
      • MVR Criteria used for acceptable vs probation vs suspension
      • Any legal assistance program to help drivers fight tickets?
    • Disciplinary Process for Company Drivers? (what triggers? How enforced?)
    • What could cause company to break a contract with OO?
  • Communication Program?
  • Controlled substance program overview
    • Process for positive tests
    • EAP offered or termination on positives?

Pre-Loss Safety Practices

  • Asset-based tech
    • Camera-in-cabin? (who sees videos, retention period, coaching process, documentation?)
    • GPS for safety issues (type of alerts, thresholds for alerts, who monitors alerts, when do they intervene with driver, how do they coach, retraining, documentation of corrective actions? Retention of records period?)
  • HOS Enforcement and Monitoring Processes
    • Electronic Logging Devices or EOBR used?
    • Toll Pass program?
    • Log book reconciliation with tolls, etc.
  • Driver (Admin) based programs
    • Pyramid 2011 for blogHow’s My Driving?
    • MVR Monitoring (pull program, etc.)
    • Incentive program?

Post-Loss Processes

  • Define “crash event” (anything that changes the material appearance of the vehicle, or something else?)
  • Define “Major Event” as opposed to “DOT Recordable” (if different)
  • Familiar with Claim Unit processes and expectations?
  • Education of all drivers on what to do at the scene of an accident? (frequency, content, vendor-based?)
  • Post-crash documentation kits (pouch? Camera?)
  • Crisis Response Team?
    • Who investigates accident scenes? Qualifications?
    • Lawyer hotline (for driver? For management team?)
    • PR-crisis management training or firm on retainer?
  • DOT Crash Register for past three years
  • Incident rate per million miles
  • Trending and pattern analysis?
  • Recap of recent “Major” crashes, lessons learned, communication to drivers about incident?

Additional Reading:


Measuring the Costs of Aggressive Drivers

fuel-gaugeUnsafe driving behaviors lead to accidents.  Lost productivity, repair costs, and higher insurance rates are only three of many expenses resulting from collisions.

Many management teams fail to factor the cost of aggressive driving in their measurably higher fuel, tire and maintenance costs.   Underestimating the impact of these increased costs can devastate profits.

Aggressive drivers push their vehicles hard.  Typically, they:

  • accelerate hard — adding stress to the engine and transmission, and wasting fuel
  • speed — driving up fuel consumption and increasing tire wear from tire heating
  • tailgate — which leads to a greater frequency of heavy brake applications & wears out brake system parts and tires more quickly

This aggressive behavior costs companies a significant amount over drivers who follow the speed limit, maintain proper distance between vehicles and slow down more gradually.


There have been a few studies done on fuel economy; tire wear and resale value of vehicles that have been driven “hard” by their operators.  One study looked specifically at aggressive driving and its effect on maintenance costs.  Some of these studies are summarized below.

  •  A supplier in the redi-mix concrete industry developed a program of early detection of unsafe driving habits.  Why?  Inherent in the redi-mix industry are driver safety and truck rollover issues, which have a critical impact on equipment operating costs and profits.

The program looked at the accelerations exerted on the truck during various driving maneuvers (turns, starts, stops, etc.) and compared these measurements to the average for the study group fleet or to the industry as a whole. Scores were calculated for several categories of maneuvers, and the individual scores plus a composite score was reported.

The findings?  The sheer weight of the loaded truck, if not handled properly, creates tremendous stress on all operating components and prematurely ages a truck.  Maintenance costs and reduced truck life span are significant costs to consider.  Higher fuel, tire and maintenance costs were also cited as primary opportunities to recapture lost profits.

  • As a District Manager at Ryder, Dan Lessnau had Profit and Loss (P&L) responsibility and he feels that their “…biggest expense area was maintenance costs. Therefore, we spent a lot of time examining how we could reduce the operational expenses of a vehicle.”  Since his location leased predominately heavy class 6, 7 and 8 vehicles (heavy and extra heavy duty trucks) most of the analysis was directed to those types.
    • For instance on a tractor with a 350 Cummins engine for every 5 miles of speed over 55 MPH you would burn an extra gallon of fuel an hour. This equates to 8 to 10 gallons a day and at today’s cost of fuel ($1.90 per gallon) that would mean from $15.20 to $19.00 per day. Let’s just say the $15.20 per day X 245 days of operation a year = $3,724 per year in just fuel expense. This type of analysis would hold true (with slightly different numbers) for smaller engines in smaller vehicles like vans, pickups and sedans.
    • Speed also reduces engine life. There is a correlation between the number of pounds of fuel put through an engine and overall engine life.
    • Speed and hard braking (tailgating) also have an effect on tire and brake wear. Again, on a large bore diesel tractor a vehicle operated safely will get about 200,000 miles on a set of tires located on drive axles.  However, excessive speed generates additional heat, which reduces tire life. We did studies that showed unsafe drivers got only about 165,000 miles on a set of tires located on drive axles. This is about 17.5% less tread life. At that time, a new drive tire cost about $300, therefore, an unsafe driver cost an additional $52.50/tire from reduced tread life. If we took a tandem tractor with 8 drive tires, an unsafe driver would cost us $52.50 X 8 = $420 in excessive tire cost every 165,000 miles.
    • Moreover, drivers that exhibit excessive speed also have harder braking (because of tailgating) which also has an effect not only on tire wear but also on brake wear. The same principles outlined for measuring the cost of tire wear held true for break wear, about a 20% in their life cycle.

Also fleets that permit aggressive drivers to wear out their vehicles need to maintain a greater number of “spares” – spare vehicles to use while the main vehicle is out for repairs and maintenance.  Spares waste capital on a truck that might otherwise be productive.  The ratio of spares is highest among fleets with aggressive scheduling, salesmen as drivers and operations that earn revenue based on the number of service calls crammed into a single day.  These hectic operations give the appearance of high productivity, but often at very low efficiency and high hidden costs such as brake, tire and fuel costs.

The US Government has created a web site – – to educate the public of the waste of fuel from improper driving.  Here are some of their statements:

  • You can improve your gas mileage by around 3.3 percent by keeping your tires inflated to the proper pressure. Under-inflated tires can lower gas mileage by 0.4 percent for every 1 psi drop in pressure of all four tires. Properly inflated tires are safer and last longer.
  • Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower your gas mileage by 33 percent at highway speeds and by 5 percent around town. Sensible driving is also safer for you and others, so you may save more than gas money.
  • Gas mileage decreases rapidly at speeds above 60 mph. Each 5 mph you drive over 60 mph is like paying an additional $0.10 per gallon for gas. Observing the speed limit is also safer.

The California Energy commission lists the following information at their web site:

  • All vehicles lose fuel economy at speeds above 65 mph. Driving 65 instead of 75 mph reduces fuel cost 13%.
  • Some overlooked maintenance items, such as a dirty air filter and under inflated tires, can increase your fuel cost up to 13%. 

Tying Costs to Specific Drivers

Over time, fuel, tire and maintenance costs become very significant.  Some fleets may be tempted to look at these costs as “uncontrollable” or simply part of “the cost of doing business”.  Why?

It can be difficult to track these costs back to specific drivers since many fleets do not assign particular vehicles to specific drivers.

SafetyFirstThe Safety Hotline program identifies drivers who are aggressive behind the wheel.  The system spots tailgating, excessive speeding, weaving in traffic and pushes reports directly to the supervisor as it happens.  The reports are focused on specific behaviors, offer training materials to help coach the driver, and give managers the clues to discover how aggressive drivers are pushing up maintenance costs within their operation.

If you look at the maintenance records for vehicles that are normally operated by the drivers highlighted by our safety hotline program, you will see higher than average maintenance costs.

Additionally, fuel costs for these drivers will typically be much higher than the average when auditing credit card or fuel card bills.

Sample Scenarios to Illustrate the Concept

Scenario 1:  Joe’s HVAC (Heating Ventilation & Air Conditioning) company with 50 vans and a 15% turnover rate runs all drivers through a comprehensive driver-training program every two years (based on anniversary date alone), and trains all new hires within the first 15 days on the job.  They publish a safety policy, but drivers are actively encouraged to get as many service calls done as possible in any given day.  “Rushing is rewarded” is how one supervisor characterized their approach to motivating drivers.

This company has an in-house maintenance program.  The mechanics complain that their efforts to maintain the scheduled maintenance program are hindered because of unpredictable breakdowns that need to be fixed immediately and placed back into service. 

The parts inventory is growing in order to be able to keep the rapidly aging vehicles on the road – this parts inventory represents a hidden drain on profitability and represents greater overhead costs to the business.

Fuel costs are alarmingly high for their operation.  Several managers see the cash crunch, but celebrate that they are busy and productive; therefore, the costs are justified.  In reality, the aggressive driving is wasting fuel from “jack rabbit starts” and excessive speeding on highways to “make up time”.  Additionally, the wear and tear of the rough handling is also decreasing the fuel efficiency as engine parts wear out.

If they only knew who was “at-risk” of becoming involved the next crash that might happen, they could intervene and actually help those drivers who are “at-risk” prior to crashes.

Scenario 2:  Jane’s HVAC Company with the same number of drivers and same turnover rate installs the SafetyFirst safety hotline service on all vehicles. This costs $17 per vehicle per year; therefore, the total cost is $850/yr. (a fractional cost compared to technology solutions that charge $$$ per vehicle per MONTH, and the SafetyFirst program includes a monthly driver training package as part of the deal!). 

Jane’s HVAC receives Motorist Observation Reports about aggressive risk taking of some drivers (those who are “at-risk” of becoming involved in the “next crash”).  In fact, 80% of all drivers never receive a complaint about their driving.  Of the 20% that do get complaints, only half ever receive a second or repeat complaint about an ongoing habit or behavior that needs attention.  In this company, that equates to about 14 drivers identified in 12 months.

Jane’s HVAC, trains all new hires, and any driver who gets more than one Motorist Observation Report about their driving behaviors. This company invests in the same, top-line training program as Joe’s HVAC.  However, the costs for training are four times less since training is more focused.

Any driver who receives a Motorist Observation Report has their maintenance records and fuel records audited for excessive fuel consumption or wear and tear.  If they are above the average for the fleet, additional coaching and counseling is provided with a follow up audit of records in 45 days.

The management team monitors fuel efficiency throughout the fleet and sets and publishes goals to all drivers.  By focusing drivers on the costs of fuel, they also encourage safer driving and more route planning.  Efficiency reduces rushing, missed appointments and helps satisfy customers.

Another example of a blended scoreBottom Line?

If Joe’s and Jane’s companies were directly compared, we’d see a difference in maintenance and fuel costs of at least 20% – a distinct competitive advantage.

Aggressive driving pushes operating costs up.  These costs can be tied back to specific drivers and management policies.

Incorporating a safety hotline service to “target” the “aggressive driving” of those who are truly “at-risk” can maximize your efforts and help preserve your overall expense resource.

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