How you can make every dollar count in a high revenue, lower profit margin industry
Great West Casualty Company published an excellent article titled, “The Financial Impact of Losses”, that examines how trucking insurance claims affect your bottom line. Out-of-pocket repairs and paying your insurance deductibles can quickly erode profitability, so there is a strong economic argument for investment in safety.
Many fleet owners and managers believe that truck accidents are a nuisance, and simply a cost of doing business. At the same time, investments in loss control, safety technology, and training may be viewed as too expensive, or at least as costs that are beyond normal operating expenses. However, in an industry that traditionally has higher revenues and lower profit margins—often in the 5% range—every dollar spent on claims and increased insurance costs requires a significant amount of revenue. As illustrated in the chart below, it requires $2,000 in additional revenue to pay for a $100 claim if you don’t want to sacrifice profits.
Your drivers may not realize that they could drive for days just to account for the lost profit from a small accident. Use the information in this article to help educate them on the true impact of each and every door ding, fender bender, and broken dock door on your company’s bottom line. Even better, make investments in cameras, collision mitigation systems, and driver education to avoid profit-eating accidents.
With a volatile trucking insurance market and increased costs pressures, it’s important to use all tools at your disposal to keep claims and insurance costs in check. As always, the trucking insurance professionals at The Daniel & Henry Company are here to help you understand what measures you can take to reduce risk and insurance costs. Please call us today at 1-877-406-5915 or email us at RuebsamJ@danielandhenry.com