The largest independent vehicle management company in the UK
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Cutting costs is invariably highlighted by fleet decision-makers as their agenda-topping priority, but new analysis by Fleet Support Group reveals how some businesses are ‘losing’ hundreds of thousands of pounds by not managing occupational road safety.
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, according to the analysis..
Meanwhile, with Britain struggling to emerge from the depths of recession, FSG’s data simultaneously highlights the value of products two of its customers must sell to cover the cost of their road traffic crashes (see charts below).
“Occupational road safety really should be a no-brainer for all employers,” said FSG Chairman Geoffrey Bray at the company’s RiskMaster User Group conference.
RiskMaster is FSG’s multi award-winning work-related driving road safety solution, which is already used by a wide cross-section of organisations including Balfour Beatty Utility Services, Dun & Bradstreet, The Labour Party, WHSmith, West Bromwich Building Society and Molson Coors Brewing Company (UK).
The Government-backed ‘Driving for Better Business’ campaign, which is managed by RoadSafe and is supported by FSG, has calculated that savings of at least 30% from reductions in road crash rates can accrue if companies implement a range of best practice recommendations.
Campaign director Caroline Scurr 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.
“All mangers should 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.”
The campaign uses more than 40 ‘business champion’ fleets to highlight how the implementation of safe driving initiatives can cut crashes and related costs and, consequently, improve employee wellbeing and safety.
“The results are a measurable contribution to business efficiency and savings that go straight to the bottom line,” said Ms Scurr.
FSG’s new data analysis highlights those financial savings and crucially, the value of goods that must be sold to cover the cost of crashes.
As the charts below highlight, client A over a three-year period to December 31, 2009 successfully cut the number of road crashes in which its vehicles were involved by a commendable 28%. However, assuming a net profit margin of 5% and that the ‘true’ cost of crashes - lost orders and output, salaries, administration costs, legal fees and general business interruption - was three times the claims cost it still means that in 2009 the company’s vehicles were involved in 156 crashes at a cost per claim of £1,116.
Mr Bray said: “That meant that the company had to sell goods to the value of £3.5 million simply to cover the cost of the crashes. Such a large figure is alarming and should act as a wake-up call to all businesses.”
Similarly a second company cut its crash rate by 31% over the three-year period under review, but in 2009 still saw its vehicles involved in 25 road crashes. As a result, FSG has calculated that the business would have to sell goods to the value of almost £600,000 to cover the cost of the incidents.
Mr Bray concluded: “There are huge savings to be had. If all companies focused on how the cost of road crashes was impacting on their sales performance and ultimately their bottom line I’m sure that more businesses would implement at-work driving safety initiatives.”
Client A: Period measured - January 1, 2007 to December 31, 2009
Impact on sales over three-year period
|
Number
of incidents reduced by |
Cost
per claim |
Cost
per claim including
hidden cost |
Total
cost saving for period |
Impact
on sales |
|
|
Assumed
net profit |
Total
sales could reduce by in year 3 |
||||
|
35 (28%) |
£372 |
£1,116 |
£39,060 |
5% |
£781,200 |
Actual cost in year three
|
Number
of incidents |
Cost
saving per claim |
Cost
per claim including hidden cost |
Total
cost for period |
Impact
on sales |
|
|
Assumed
net profit |
Value
of sales to cover cost |
||||
|
156 |
£372 |
£1,116 |
£174,096 |
5% |
£3.5 million |
Client B: Period measured - January 1, 2007 to December 31, 2009
Impact on sales over three year period
|
Number
of incidents reduced by |
Cost
saving per claim |
Cost
per claim including hidden cost |
Total
cost saving for period |
Impact
on sales |
|
|
Assumed
net profit |
Total
sales could reduce by in year 3 |
||||
|
27 (31%) |
£392 |
£1,176 |
£31,752 |
5% |
£650,040 |
Actual cost in year three
|
Number
of incidents |
Cost
saving per claim |
Cost
per claim including hidden cost |
Total
cost for period |
Impact
on sales |
|
|
Assumed
net profit |
Value
of sales to cover cost |
||||
|
25 |
£392 |
£1176 |
£29,400 |
5% |
£588,000 |
Fleet Support Group (FSG) is the largest independent vehicle management company in the UK and looks after approximately 50,000 vehicles.
The well-established organisation based in Chippenham, Wiltshire, has gained an enviable reputation within the industry by continually concentrating on delivering a consistent, quality service embracing full vehicle acquisition and disposal, vehicle outsourcing, fleet management, risk management and work-related road safety, maintenance management, accident management, breakdown recovery, short-term car rental and truck management.
Within the FSG team, there is significant industry experience and qualifications across the range of services provided. This in turn is supported by an in-house IT operation which is continuously upgrading the internal systems and applications to ensure that, by innovation and product development, FSG leads the field in the provision of vehicle management.
For further information contact: FSG chairman Geoffrey Bray on 0844 8000 700