Running a private fleet of drivers and trucks is like running a trucking company. The fleet owner has the flexibility and control he or she needs to deliver products to customers, but it does come with risk. Below is a great article that lists some of the most important risks to consider when purchasing fleet insurance.
Risk of Lost Business Due to a Driver Shortage
In many areas, the gap between the demand for and supply of drivers is very high. Not only is the current workforce getting older, there is a very shortage of skilled and qualified drivers entering the job market. Because of these factors, there is a real possibility of lost business due to missed deliveries.
Many companies experience peaks and valleys in shipping requirements throughout the year. Because of this, a private fleet may scale its equipment needs to handle peak periods while satisfying customers demands. This can lead to underutilized equipment sitting on standby during the slower periods. This is an inefficient practice that’s extremely costly for many companies.
Most businesses have constraints on available capital. Diverting limited capital from expansion and growth to buy trucks for a fleet is only recommended if the fleet generates more income than the returns that may be gained if the capital went to new equipment, upgraded technology or bigger facilities. Capital should be put where a company can create the biggest returns for investors.
Many companies underestimate the financial exposure of running a fleet of trucks. According to a study done in 2006, the cost of a non-fatal crash average over $195,000, and the average cost of a fatal accident was over three and a half million dollars. Particularly for smaller businesses, one major accident could mean financial insolvency. That means that it’s important to buy fleet insurance to ensure that the company’s financial liabilities are covered.
There are benefits and drawbacks to owning a private fleet of trucks, but understanding the company’s potential risks can help me owner determine whether fleet management makes sense for the company. Contact a local broker for a free consultation to determine whether fleet insurance is the right purchase.