Before I joined Telelink Emergency Response Centre several years ago, I had never heard of Journey Management, and my idea of a Trip Risk Assessment was asking myself how many coffees I would need to get to where I was driving. In the sales profession, however, you are only as good as what you know. If you don’t understand your buyers’ struggles and business in a way that makes you valuable, you don’t deserve their attention.
(Before reading any further, if you aren’t sure what Journey Management is – check out this quick blog. It is commonplace in the energy industry, and now starting to catch on in other industries. It not only saves lives, it makes complete fiscal sense which is where this post is going.)
Over the last several years I have spent more time talking about Journey Management and driver safety than talking about my dogs – and I spend an obscene amount of time talking about my dogs. Most companies these days understand the need for, and invest in, a solid driver safety program; IVMS, fatigue management training, and defensive driving courses are just some of the common tools employed to protect drivers. Some companies go the extra mile and invest in a Journey Management program.
You might ask, “Well if Journey Management is so great, why isn’t everyone doing it?” Despite the fact that Journey Management can reduce vehicle accidents, save lives, and minimize the impact of collisions, it has a price tag. At first glance, this may simply seem like the cost of doing business safely. Those who can afford it spare no expense, and those who can’t do the best with the resources that are available to them. But what if Journey Management could positively impact the bottom line? Can it improve safety AND make financial sense? The short answer is yes. The long answer follows.
To truly determine the financial impact, we need to first establish the cost of the status quo – operating without a Journey Management program. This will vary based on industry, type of fleet, and region, so we have to make some assumptions. For the purpose of this illustration, I’m going to use a fictitious oil & gas services company, Drillers’R’Us, who operates across Canada and the United States with a fleet comprised of 500 of both light and heavy-duty vehicles.
Different sources provide different estimates on the average cost of commercial vehicle incidents, but the National Highway Traffic Safety Administration estimates non-fatality incidents at $74,000 and fatality incidents at $500,000 in direct and liability costs. [Source] The non-fatality estimate is a low figure for some companies operating in the oil & gas industry as vehicles are often heavily customized with expensive equipment, but let’s be conservative.
Next, we need to determine by how much Journey Management can reduce the costs associated with vehicle incidents. A list of papers addressing vehicle safety initiatives (including Journey Management) over the last 20 years along with their results, shows the dramatic impact it can have on vehicle incident rates over time. To view the complete list and results, check out “A Review of the Literature: Motor Vehicle Safety Initiatives in the Oil and Gas Extraction Industry” by Kyla Retzer, Ryan Hill and Jason Burton. Reductions in vehicle incident rates from papers specifically addressing Journey Management vary from 60% over 2 years to 90% over 3 years.
So we know the cost of non-compliance, and we have evidence that tells us what we can expect to see in vehicle incident rate reductions over time, but what does it cost to build and implement a Journey Management program? This is where it gets tricky. Costs vary based on a lot of factors, such as whether it is internally administered or outsourced to a third party, technology, complexity of process, and so on. The largest investment would be towards the most robust solution where drivers call-in to book a journey with a Journey Manager. This allows for proactive, preventative measures with a detailed risk assessment and comes with the certainty that trained response specialists at the Emergency Response Centre are engaged 24/7.
Until recently, this live, voice-based model of executing Journey Management was by far the most common. Today, however, innovation is leading to new ways of capturing journey data and monitoring real-time compliance. Using an outsourced model, such as Telelink’s, and taking advantage of fit-for-purpose software and applications, can drive down costs down to as low as $1/Journey.
So let’s now return to our example company, Driller’R’Us. With 500 Vehicles making 1 trip/vehicle/day = 182,500 Journeys/Year, we can estimate a cost of $182,500/year. To put that into perspective, this is a fraction of what many CEOs are paid per year in the Energy industry. Preventing as little as 3 non-fatal vehicle incidents a year would actually go beyond the cost of the Journey Management program itself and improve the bottom line.
Now that we’ve established, albeit in a back of the envelope kind of way, that it makes absolute financial sense to implement a Journey Management program, let’s talk about something that makes even more sense.
You can’t put a price on human life. Yes, a fatal vehicle accident costs roughly $500,000 in direct and liability cost, but what about the loss of life? What dollar figure represents the years of grief an employee’s family suffers, or the loss a daughter feels when she graduates high school and her Father isn’t there? Why is a CEO’s time worth more than a driver’s life?
Sometimes the everyday grind of business makes us lose sight of important things in the pursuit of profit. As Safety professionals, it is our duty to protect employees and keep their well-being at the top of our priority list. Fighting on their behalf means we need to speak the language of the board room and demonstrate that what is in the best interest of our employees, is in the best interest of the bottom line.