Fleet Risk Management

Preventive maintenance under the hood and in the cab

By Sean Dewalt

Whether you own a few company vehicles or a large number of tractortrailers, fleet risk management should always be on your mind. Understanding the exposures of vehicles on the roads in Alaska is less about knowing the chances of a crash and more about the consequences of those occurrences should they happen.

While the majority of commercial drivers and average drivers operate their vehicles safely, the fact is that there are more than 6 million car accidents in the United States every year. Road crashes are still one of the leading causes of death in the country, and they are the leading cause of death during work hours.

According to the Federal Motor Carrier Safety Administration (FMCSA), in 2020 there were 4,444 fatal crashes involving trucks and 101,000 other crashes involving injuries. Last year, large-truck-involved fatalities rose 13 percent to the highest level in almost twenty years. In 2020, the National Highway Traffic Safety Administration reported 35,766 fatal vehicle crashes, the most since 2007.

The key to safe, profitable operation of your commercial fleet is hiring the most experienced commercial operators and providing those drivers with the best maintained vehicles possible. While this is likely evident to any company, what is not discussed often enough is the liability that inexperienced or unqualified drivers pose. This includes risk to a company’s reputation when a mishap makes headlines in the news.

Behind the Wheel

Decisions made by a driver reflect the company’s risk tolerance and culture. While the shortage of competent, experienced professional drivers continues to affect the industry in Alaska, settling for a less-thandesirable driver to achieve company goals can have detrimental effects. For instance, hiring a driver with a previous DUI conviction, reckless driving record, or other serious infractions who is then involved in a crash will likely face heavy scrutiny. If the cause of the crash is determined to be the fault of the driver and the driver tests positive for drugs or alcohol, this could be construed as a negligent hire or negligent retention, which can give rise to a lawsuit. This would be extremely costly from a liability standpoint. Add to this a hardening commercial auto market, and the company’s ability to remain profitable becomes even more difficult.

Due diligence goes beyond having a complete FMCSA driver’s file, and a once-a-year review of motor vehicle records is not enough. One solution to keep on top of this is continuous monitoring of driver records by a third party. Alerts are provided to administrators on adjudicated court cases, providing real-time information that helps evaluate a driver’s potential liability to the company. It is also important to ensure thorough background checks, making sure to include out-of-state records for operators where necessary.

Retaining top-quality operators is also important. With the current demand for safe, experienced drivers, this is likely the greatest challenge for any fleet management program. The keys for retention of good drivers are wages, benefits, flexibility, and culture. A positive work environment, where written policies support constructive coaching for improvement, tends to resonate with most drivers; continual support and a balanced work schedule are also important to today’s workforce. Ample paid time off for rest and relaxation away from work is another critical benefit in retention.

A culture of safety that rewards good behavior and sensible decision-making often yields the best results, especially if peer-to-peer positive pressure is applied. One way to accomplish this is rewarding employees who meet or exceed goals in the safest manner possible. Also, company functions that enhance bonds among workers outside of the workplace can aid in retention. Drivers who enjoy the work they perform, their coworkers, and the company they work for will often stay, as opposed to leaving for another opportunity. Kyle Petty, former NASCAR driver, once said, “The driver that you have to sell on safety shouldn’t be driving.” That is a fact.

Driving Data

One innovative solution for fleet safety is telematics, which has been a part of fleet safety for a decade or more. The term “telematics” is a combination of “telecommunications” and “informatics.” A fleet telematics system enables a commercial vehicle fleet to share information such as speed, location, fuel consumption, and driving events to a central location for collection and interpretation. These tools vary greatly, but most include GPS analytics, wireless data transfer, satellite communications, or in-vehicle storage through an OBD-II port. The cost and return on investment for each of these approaches vary greatly.

Next-generation technologies include forward- and driver-looking cameras that leverage artificial intelligence “machine vision” to detect and alert drivers and managers to unsafe or risky driving behavior. One benefit of cameras in commercial vehicles that companies and employees can both agree on is driver exoneration. When a dash cam captures an event where another party is at fault, it is not just the monetary costs of the incident that is saved; drivers will have a sense of relief when they are deemed not responsible for the cause of the incident. That internal support enables an employee to know that the company has their back. It also might get a premium discount from the commercial insurance carrier. Be sure to ask your insurance agent about credits for dash cameras.

Compliance, Safety, Accountability (CSA) is described by FMCSA as a “data-driven safety compliance and enforcement program designed to improve safety and prevent commercial motor vehicle crashes, injuries, and fatalities.” CSA scores are updated through the FMCSA's Safety Measurement System (SMS) each month.

The individual variables in the calculation are called the BASIC scores, which stands for Behavior Analysis and Safety Improvement Categories. These include frequency and severity of crashes, controlled substances/ alcohol, unsafe driving, driver fitness, hours of service, hazardous materials compliance, and maintenance. Each carrier has a CSA score that represents how well they have maintained that road safety. The score is for the company, not the driver, and the SMS groups carriers by BASIC with other carriers that have a similar number of safety events and then ranks carriers and assigns a percentile from 0 to 100 (the higher the percentile, the worse the performance) to prioritize them for interventions.

Proactive Measures

Maintenance of commercial vehicles is the cornerstone of fleet safety. A solid preventative maintenance plan can also decrease costs and downtime, increase efficiency, extend vehicle life, and improve customer retention. Brakes and tires are crucial points of failure, and they often top the list of infractions. Pre-inspections should be conducted before every trip and crosschecked by company professionals for accuracy.

Formalized maintenance schedules extend way beyond road safety and will often come into play when a driver pulls into a scale house or mobile scale on an Alaska roadway. Since all Alaska Department of Transportation & Public Facilities inspections are listed publicly on Federal Motor Carrier Safety Administration’s website, citations and history are viewable to anyone looking at a company’s operations.

The best bet to keep on top of fleet safety is by being proactive. Take some time to assess your fleet operations, and never stop asking: “What can we do to improve fleet safety?” Good fleet risk management is continuous, and it often has a return on investment much quicker than you might think.

Sean Dewalt is a Senior Loss Control Consultant for Umialik Insurance Company in Anchorage. Dewalt has been working in safety and risk management in Alaska since 2000.

Northern Pacific Airways

The new trans-oceanic carrier using Anchorage as its hub launches this month, except the inaugural route doesn’t pass through Anchorage and is entirely over land. Northern Pacific Airways carries its first passengers on June 2 on a one-hour hop to Las Vegas from Ontario International Airport, inland from Los Angeles. The round-trip route departs on Fridays this summer and returns from Las Vegas on Sundays, enabling the startup airline to earn revenue. Routes through Anchorage, to the East Coast, and to international destinations in Japan and South Korea are in the planning stages at press time.

np.com

Three Bears Alaska

The twentieth location in the Three Bears Alaska chain is a former liquor store in Ester, west of Fairbanks. The supermarket took over Gold Hill Imported Beer and Fine Wines in March and is planning a “full facelift” this summer into a gas station convenience store, similar to recent renovations in Trapper Creek and Ninilchik.

threebearsalaska.com

Peter Pan Seafood

Peter Pan Seafood is taking over Trapper’s Creek Smoking Co., maker of salmon jerky, hot- and coldsmoked fish, and gift packs under the Copper River Smoking Company, Alaska’s Best, and Eat Like a Grizzly brands. From its smokehouse near midtown Anchorage, Trapper’s Creek also makes custom packages for fresh-caught salmon, halibut, or crab. Trapper’s Creek Smoking Co.’s current owner Andi Wahry is staying on as an advisor during the transition. The acquisition further integrates Peter Pan Seafood with an additional channel for value-added products. ppsf.com

ASRC Federal

A subsidiary of Arctic Slope Regional Corporation (ASRC) is acquiring the logistics arm of a Virginiabased military contractor. Science Applications International Corp. (SAIC) signed an agreement to sell its logistics and supply chain management business to ASRC Federal. The $350 million cash transaction adds supply chain management and logistics capabilities for US Department of Defense agencies to ASRC Federal’s current procurement and warehousing services at military locations nationwide. asrcfederal.com

Tlingit & Haida

A hotel and café in downtown Juneau are now under tribal ownership. The Central Council of Tlingit & Haida Indian Tribes of Alaska purchased The Driftwood Hotel and Sandpiper Café, across the street from Tlingit & Haida’s Andrew Hope Building and two other commercial office buildings acquired in 2021. The area is designated the Aak’w Village District, an ongoing effort to develop the neighborhood while sustaining local arts and culture. “This acquisition checked all of the boxes for the tribe’s strategic plans for growth and economic sovereignty," says Tlingit & Haida President Richard Chalyee Éesh Peterson. Tlingit & Haida will continue running the Driftwood Lodge as a hotel, so occupants should not notice any change in service. ccthita.org

Cordova Telecom Cooperative

Cordova Telecom Cooperative selected a New Jersey-based contractor, Pioneer Consulting, to oversee the engineering and design phase of a new submarine cable. The 171-mile system will connect Cordova and Seward, with branching units for additional connectivity to Johnstone Point and Chenega. The project is called Fiber Internet Serving Homes in Alaska (FISH). Pioneer Consulting previously assisted with the project’s initial feasibility study in 2021, which informed a successful application for grant funds from the US Department of Agriculture’s ReConnect Loan and Grant program. ctcak.net

Quintillion

An Anchorage company trying to build a fiber optic cable from Asia to Europe via Alaska is now under out-of-state ownership. The executive team of Quintillion and its holding company, QSH Parent Holdco, approved an acquisition by Washington, D.C.-based private investment firm Grain Management. Founded in 2015, Quintillion constructed and operates a fiberoptic cable network that provides high-speed broadband services to Northern Alaska. A planned three-phase subsea cable system would connect Asia to Western Europe through the Arctic Ocean. "Our partnership with Grain will expedite closing the digital divide and accelerate the pace with which we connect more Alaskans to each other and to the rest of the world,” says Quintillion CEO George Tronsrue III.

quintillionglobal.com

Mat-Su Health Foundation

The co-owner of Mat-Su Regional Hospital is the largest Alaska beneficiary of charitable giving from billionaire philanthropist Mackenzie Scott. She donated $15 million to MatSu Health Foundation in 2022. CEO Elizabeth Ripley describes the gift as a way to invest in smaller initiatives throughout the Mat-Su Borough. As the ex-wife of Amazon founder Jeff Bezos, Scott is the third-wealthiest woman in the United States. healthymatsu.org

[EDITOR’S

NOTE:

Economic Indicators has moved to akbizmag.com: starting June 1, find daily updates on oil and gas prices and production, as well as Employment Update (published monthly), on our homepage.]

MULTI-MODAL TRANSPORTATION WITH ALASKAN GRIT.