Invest in road safety to fight recession

Cutting costs is the number one priority facing fleet decision-makers and introducing a comprehensive road risk management strategy for those who drive for work is one of the most effective money-saving measures for private and public sector organisations.

Case study evidence from ‘business champions’ behind the ‘Driving for Better Business’ campaign supports a significant weight of industry research that concludes that investing in safety delivers financial benefits to an organisation’s bottom line.

With Britain in the depth of a recession expected to last for many months, financial savings of at least 30% from reductions in road crash rates can accrue if companies implement a range of best practice recommendations.

Caroline Scurr, campaign director of the Government – backed ‘Driving for Better Business’ campaign, said: “Reducing the number of crashes involving at work drivers is proven to save thousands and, in the case of large fleets, millions of pounds. In addition, cutting the carnage improves business efficiency and the image of an organisation.”

The ‘Driving for Better Business’ campaign is delivered by RoadSafe on behalf of the Department for Transport, which is working with the police and a raft of other agencies to encourage companies and organisations nationwide to implement best practice occupational road risk management programmes.

An estimated 200 road deaths and serious injuries a week result from crashes involving at work drivers with more employees killed and seriously injured on Britain’s roads while driving on behalf of their employer than in any other work-related activity.

A key feature of the ‘Driving for Better Business’ campaign is its 23 ‘business champions’ – companies which showcase their own good practice, to encourage others to adopt sound safe driving management policies.

They include:

Tesco.com, which operates 2,000 vans making up to 65,000 deliveries a day to customers nationwide. The fleet has jumped in size by 25% in the past two years, while the crash rate per vehicle has nearly halved. Fleet manager Dino Papas said: “As a result, we are talking about millions of pounds in savings. If the accident trend had continued, then we would have been spending £3.5 million more on van damage than we are today.”

Chelmsford Electrical, which operates a fleet of 35 light commercial vehicles and 12 company cars, has seen insurance premiums per vehicle drop from £1,350 to £550 per vehicle.

Gateshead Council, which has recorded a near 30% decrease in fleet accidents over the past three years on its fleet of more than 350 vehicles. Alasdair Tose, transport services manager, said: “By reducing our accident record we are saving taxpayers money and ensuring that service levels within the authority’s area continually improve as valuable time is not spent on dealing with the aftermath of an incident.”

Ms Scurr said: “All mangers want to bring avoidable costs under control. Effective management of those who drive for work is an important element of general management - if it isn’t addressed properly, the negative impact on profit can be very significant.

“All of our ‘business champions’ have cut crashes and related costs significantly, and, consequently, employee well-being and safety have been improved. The result is a measurable contribution to business efficiency and savings that go straight to the bottom line.

“They are real world testimony to the ability to significantly impact costs and reduce on-road incidents and risk exposure generally by putting in place a range of interventions.”

Information from IAM Fleet, which supports the ‘Driving for Better Business’ campaign, reveals that the average direct cost of a road crash is £700 per vehicle. With an average pre-training accident rate of 65% per fleet, the average cost per vehicle is £455.

Post training the average direct crash cost is £595 per vehicle - a 15% reduction; the accident rate drops to 48%; the average cost per vehicle is £285. As a result the savings per vehicle total £170.

However, total costs of a crash are on average four times that of direct costs. Average hidden costs - lost orders and output, salaries, administration costs, legal fees and general business interruption - are therefore £700x3 = £2,100. With a 65% accident rate, the hidden cost per vehicle is £1,365. But, with a 48% accident rate, hidden costs reduce to £1,008 a per vehicle saving of £357.

Ms Scurr said: “As a result of pro-actively managing the risks associated with at-work driving companies, on average, can cut their costs by £527 per vehicle per year. In these recessionary times those are cash savings that most organisations cannot afford to ignore.”

Other savings that typically accrue as a result of improved road safety due to a more sympathetic and smoother driving style include:

A fuel saving of 5-7% a year.

A 5% reduction in maintenance costs specifically relating to tyre, brake and clutch wear and tear

A minimum 4% residual value improvement.

Companies can also expect a reduction in insurance premiums of perhaps as much as 15% a year and a reduction in their insurance excess.