Home » Managing the increasing risks of the road crucial for SA businesses in peak season

Managing the increasing risks of the road crucial for SA businesses in peak season

by Tia

Much focus has been placed on the safety issues pertaining to road freight 2023, given the significant rate at which this mode of transport has grown over the last decade. This growth, coupled with South Africa’s mounting infrastructural challenges, and disruptions caused by ongoing strikes in both the rail and port networks, is a reminder for businesses operating in the sector to ensure that the risks of the road are being minimised and managed effectively in 2024.

 According to Jason Mellow, Head of MiWay Business Insurance, this is critical as the end-of-year approaches, which is the busiest time of year for businesses operating in the fleet management and logistics sub-sector.

The risk of having more wheels on the tarmac

Former Transport Minister, Fikile Mbalula [1] stated last year that heavy goods vehicles accounted for 34% of all traffic on South Africa’s N3 highway in 2022, increasing by 48% over the past decade. Mellow says that for businesses who own and manage their own fleets, managing the risks of the road should therefore be a top priority. “Laser-focus now needs to be placed on risk mitigation, particularly over the busy festive periods, where annual peaks in sales volumes typically lead to an increased demand for transportation services.”

This time of year not only sees an increase in large transportation vehicles on the road which in itself presents a substantial risk to other trucks and motorists, but the likelihood that these trucks will be sharing the roads with reckless or drunk drivers is much higher during the holiday season.

Furthermore, along with this increase in volume comes the risk of more breakdowns and equipment wear-and-tear, as load burdens increase and more frequent trips place load-bearing vehicles under more strain.

Financial protection against the risks of the road

For businesses in the sector, the risks involved are manifold. Business owners need to contend with the potential financial fallout of more regular vehicle repairs and maintenance, damage or destruction resulting from collisions, the replacement of damaged goods and the cost of delays in deliveries.

As Mellow explains, National Transport Month marks an important call-to-action for businesses in the sector to review the safeguards they have implemented in managing peak season-related risks.

For example, third-party liability insurance cover should be in place to cover any damage caused to another’s property or vehicle. However, as he adds, businesses need to bear in mind that all liability related to bodily injury or death on the roads is covered under the social insurance provided by the Road Accident Fund.

Safety first – whatever the weather

Other risks to be considered include climate change-related natural disasters and the rising frequency of adverse weather patterns. Evidence of the far-reaching impact this can have on transport businesses and their industry counterparts can be seen in the 2022 KwaZulu-Natal flooding and more recently, the flooding throughout parts of the Western Cape.

These catastrophic events can lead to financially devasting losses, especially in light of the added pressure they place on roads; many of which have potholes or have deteriorated over time. “Having adequate insurance cover to protect your business from climate change risks can go a long way in making sure that a single disaster does notlead to the shutdown of a business,” says Mellow.

He therefore encourages businesses to work closely with their advisers to assess and determine the best strategies for managing their unique risks. “While many businesses in the transport sector may have viewed extreme weather conditions as freak occurrences or temporary setbacks, all evidence points to the fact that climate change is indeed here to stay and at least for the immediate future – needs to be factored into the risk management strategies of transport companies.”

Protection against rising crime

Apart from these emerging threats, transport businesses are also faced with the reality of increasing crime. Insurance can provide an effective safety net against these kinds of crimes, but, as Mellow asserts, businesses also have a responsibility to implement their own internal risk management measures. Some of these measures include the use of telematics, dashcams and GPS tracking.

Businesses also need to carry out regular risk assessments, taking into consideration the risks that are associated with their specific routes and times of travel. Truck drivers should also be trained on how to do the following; handle the possibility of a hijacking, reacting responsibly and calmly and reporting such incidents.

Technology’s role in shaping the future of commercial insurance

Thankfully, as Mellow asserts, new and emerging technology has become more efficient at helping businesses safeguard their fleets. Examples of this include predictive analyses, carried out by artificial intelligence systems to assist companies in identifying risk factors, and using historical data to predict future outcomes.

Another example includes the wider accessibility and accuracy of weather-related data an indispensable tool for fleet managers who can plan their routes and operations in line with real-time weather data. In addition, advanced telematics can now more accurately collect data on driver behaviour, such as speed, braking, and location. Insurers can in turn use this data to assess risk more accurately.

As Mellow concludes: “By fostering a culture of risk awareness and implementing proactive risk management measures, transport businesses can fortify themselves against potential disruptions and contribute to the overall safety and reliability of our nation’s transportation network.”

[1] https://businesstech.co.za/news/motoring/596178/trucks-are-taking-over-south-africas-roads-now-government-wants-to-introduce-new-rules/

You may also like

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!