When it comes to heavy commercial operations, there are almost always four forces at work: operation, human resources (also called human relations), the risk and the profit, of course.
With most professional operations, a Risk Department will handle everything from safety and security at sites, offices, and depots through occupational health and safety, loss control and access control and let’s not forget “accident investigations.”
While this all sounds perfectly normal, we find a very interesting trend in procurement psychology, when it comes to the risks associated with road traffic collisions. When you ask someone to list, the risks associated with road transport, “accidents” is one of the elements that invariably pop up. Everyone agrees that this is a “risk”, and everyone agrees that “accidents” should be “investigated”. But when you delve deeper, the references become increasingly vague. When a truck is stolen or hijacked, you invariably prefer, need or want to recover it.
As soon as possible. People react to hijackings with a passion that is equaled only by teenage hormones. You want your asset back. You need it back. Everything else can wait. Everything. In order to prevent this loss in the first place, you design a variety of mechanisms and enter into partnerships with external service providers.
You might start with so-called “hijacking awareness”. You write policies and procedures and maybe even outsource a company like IBF Investigations to produce an awareness video or to come in and do presentations to groups of drivers on how to prevent hijackings and what to do when it does happen.
Training or video production of this kind includes aspects like general self-awareness and situational awareness. It covers tactical risk profiling, approach prediction, deviant approach behavior, approach methodology, and modus operandi to enable drivers to be more familiar with the methods used by hijackers, during the initial approach.
Thereafter, it covers entry mechanisms, personal safety, confrontation mitigation behavior, environmental awareness and on-going disciplines designed to optimize recall and minimize the risk of personal injury or death.
Drivers are also trained on the psychological influence, natural reactions and post-traumatic trauma they can expect, to ensure that the associated syndromes are recognized and dissolved in understanding. In some settings, drivers are even introduced to real-world examples, role-play experiences and physical firearms. All this just to prepare them for that one day when it might happen to them. After a hijacking happens, the focus – from the company side – shifts to the recovery of the asset. All the mechanisms at their disposal are deployed and activated. Tracking units in trucks, more tracking units in trailers, recovery teams, helicopters, and police services and even neighborhood watches and community police forums are all activated. In some instances, vehicle losses are shared on special WhatsApp Groups, like the “Heavy Transport Risk” Group, run by IBF Investigations.
Everyone is doing whatever they can to recover the truck and very little to “save the driver” by comparison. If you are truly honest. Disturbing but true. It’s all about “the truck and trailer/s and the load”.
If we use companies that have a fleet as big as 1 500 trucks or more, with trailers, as an example, most will be fall victim to active hijackings more than perhaps five times per year – a bad year. In most instances, the hijacking is prevented or fails and in many others, the truck is recovered. While tock is sometimes lost, there are fewer cases where the whole truck and load actually disappear forever. But this is because of all those technologies that the operators invest in to prevent these very losses. Losing a truck can be a loss of between R1 million and R5 million, depending on whether there is some load involved and the value of the load, of course.
This is considered a “high risk” and it involves a “real loss”. From here – considering the way recovery agents operate – the cost can escalate if multiple recovery teams are deployed, if helicopters are involved or if vehicles are recovered in a damaged state. Where vehicles are not recovered, private investigators might be appointed, and even rewards offered to recover the vehicle and/or the load. These “reactive services and efforts” can rack up another R100 000 or more in direct costs during the recovery phase alone.
Because hijacking and theft are crimes and because the loss of a truck and trailers and even a load is considered the realization of actual risks (versus virtual risks), the costs are easily justified. If a company like this pays but R500 per month (and some pay more) on tracking and recovery, for trucks and trailers, this is easily around R750 000 per month or R9 million per year. For less than ten actual hijackings! And – considering how popular tracking and recovery is – this is clearly a cost worth the risk. We should all agree to that.
So what about road traffic collisions? How high is the risk, how real is the risk (virtual versus real) and how much is typically spent on an investigation? How much are the potential losses and what are the unpredictable costs when they occur? How do these stack up against hijackings?
Let’s explore the comparative likelihood of road traffic collisions: Crashes happen much more often than hijackings. The result in more fatalities than hijackings. They happen in seemingly dangerous and safe areas, at any time – day or night. They often involve more than just your own vehicle and where two trucks are involved, the losses could be double your own or even more. If you slap legal costs on top of that, where trials are involved and the relatively higher cost of lawyers and advocates, it can become very costly indeed.
If you then consider preparation time, the need for post-event investigation, trial preparation and actual court days, it gets even worse. Add the third party legal costs and their total losses and suddenly a collision can cost you at least double the amount a hijacking would – and sometimes, there is nothing you can do but pay up and accept your losses – especially where the evidence you have at your disposal is inadequate. By poor evidence alone, you could end up paying for third party’s losses – even if it was never your fault, as such.
According to IBF Investigations, in a company of 1 500 vehicles, as many as 20 or 30 major collisions could occur within a year. So the potential loss or the actual financial risk associated with collisions is easily three to six times higher than for hijackings and theft – wouldn’t you agree? If this is the case, are heavy commercial transport operators spending more on crash specialists like IBF Investigations than on tracking and recovery? They probably should, right?
Well, they don’t. For some reason, the true value a properly completed at-scene or post-event road traffic collision investigation or reconstruction is grossly under-estimated. Operators run a much higher risk and face much larger losses from road traffic collisions than from any other risk – yet they constantly question the cost of investigation services as a function of how much they pay, in total.
The evaluation and consideration of specialist road traffic collision investigation and reconstruction does not start with the risk. Transporters most often do not consider the total annual actual – and possible – losses or look at how urgently these kinds of services are needed. They forget to weigh the consequences of not having this service available against the benefit of investing in the investigation as a risk mitigation strategy. But why?
“When we deal with heavy commercial operators and present our rates, they are quick to point out how few collisions they actually have had over the last X months or years. They typically think about what the cost is, of that one investigation, and treat it as an operational cost. A necessary evil. Many of our clients would prefer not to use accident investigation experts at all. They would prefer to just trust the system. Only our most risk-averse and the most professional clients understand and grasp the need for accident investigation and reconstruction,” says Stan Bezuidenhout.
He adds: “The cost of an ad-hoc investigation is largely unpredictable since you cannot predict when and where collisions will occur, how far away the scene will be from a depot or your investigator or how many vehicles will be involved. We recently introduced a similar costing model to the tracking/recovery industry: a flat rate per vehicle for all investigations and even other services. The knee-jerk reaction by some was how much that would cost them per year. They completely ignored the loss/risk ratio. They are seemingly unable to kink the cost of our service to the risk of not using us or the benefit of having us on call 24/7.”
Why is this? Why do people spend up to five times or more to prevent the loss of one or two vehicles a year than they are willing to, to prevent the costs and liabilities associated with 20 or more collisions per year? Why do they not use the total possible losses suffered as a guide for how much they are willing to pay to mitigate those risks? Why would a risk that is realized much more regularly with substantially higher unpredictable additional liabilities be considered less worthy of mitigation? Stan explains: “When you think about a hijacking, it feels like a risk.
“Something is taken, by a criminal and lost through violence. It happens without warning and there is little you can do about it. It is a risk that you can touch and feel. Now the truck is there, then it is gone. If I cannot get it back. I lose more than R1.5 million, so the loss is doubled. This is the real loss and the cost of recovery is justified – because the loss is so easy to frame in Layman’s terms.”
But then there are other costs and direct liability reductions associated with this hijacking model. The vehicles might be insured. Since the insurance carries some risk, the bulk of it is carried by the insurer. But the operator also pays that insurance premium without any thought, mainly because insurance is also “essential”. In short, you have to insure your vehicles and you have to install tracking units because the potential losses are so high – even when you are insured.
Stan goes on: “Accident investigation, on the other hand, is not covered by insurance. The truck is not actually lost as such. It was only an accident, after all. People feel like the losses they suffer in collisions are not as preventable as hijacking – other people might run into them. They believe that collisions can happen to anyone and kind of accept this as an expense associated with the operation. “They determine accident investigation – along with the cost of damages – to be more of an operational cost. It is not seen as a risk, as such. The collision might be the result of a risk, but the cost of repair, investigation, and reconstruction is measured as an operational expense – not really a loss as such. But this approach is inherently flawed.”
See, if collision investigation added no actual value and was a restorative measure or if it played no role in litigation or liability in legal matters, it would be different. If the proper investigation and reconstruction of a collision would have no impact on operations, risk or profitability that would be understandable. But you see, they do. In more ways than people realize.
Consider the issue of vicarious liability. This is that part of the law that essentially states that you are liable for the negligence of your driver since he was acting as your agent and/or on your behalf. Therefore, everything he does is on you. Unless you can prove that he acted as an independent agent, outside of protocol or mandate and individually. These are things that proper investigation and reconstruction can highlight.
Next, think about the results (conclusions and findings) that are included in a reconstruction report. If there are aspects of the collision – human, mechanical, engineering or environmental factors that played a role in the collision, strategies could be developed to reduce those risks in the future. These are the factors highlighted in each of the reports compiled by IBF Investigations. If you think losing a truck is an issue, try losing a truck, a driver, an assistant, facing the claims for damages to anything from 5 to 20 other vehicles, being branded as the one who “caused countless deaths” and being judged and chastised in the media – even before you have any results. One of IBF Investigations’ clients went through this hell once. The trial by media was relentless. If it was not for the work done during the investigation and reconstruction, he would even have faced criminal charges. It was the work done as part of the collision investigation and reconstruction that revealed evidence that even at-scene investigators missed that insured that the client is still a free man. Even today.
Being involved in a collision is also not as “cut and dried” as having a vehicle hijacked. In the case of hijacking, the loss is limited to your vehicle and completely irrelevant if the vehicle is recovered. In a collision, the loss is permanent and has major implications since the end of the “money pit” is nowhere in sight, when third parties, civil claims, and criminal charges are involved. The loss can multiply and the whole year’s budget – often derived from a mere percentage of turnover or profit – can be eaten up in a single serious collision.
And so, the list goes on. But what can be done? If operators consider crashes that happen much more often while potentially attracting far greater losses to be unworthy of the same level of investment towards mitigation and prevention than hijackings – what do you do? How do you address the risk while satisfying this imbalance – as irrational as it may seem?
“We have the answer,” Stan reports. “We are in the process of expanding nationally.
“We are currently in the process of opening offices in Cape Town, Durban and Johannesburg with Bloemfontein and Port Elizabeth following,” As a man of passion, Stan continues to explain how this will satisfy the crash loss risk consideration as an operational expense while ensuring that cases are properly investigated and the risk minimized through the thorough collection of evidence: “We will have these offices in all the major centers soon.”
“What this will allow us to do is to offer a pre-defined flat rate, per vehicle, per annum or month, depending on fleet size. This will be a lot like tracking and recovery and insurance. Transporters are intimately familiar with the syndicated cost risk distribution model. For a nominal monthly fee, this is fixed and pre-defined, we will respond to, investigate and reconstruct road traffic collisions for our commercial customers.”
He lists the benefits as being:
- One flat monthly fee. No hidden costs, as long as distance limits are adhered to.
- No surprises or excessive rates, based on seriousness, number of vehicles or distance.
- Preferential treatment – members always come first.
- Immediate reports – special online reporting models are now implemented.
- No procurement delays – crashes happen at any time. Not only during office hours.
- All services, including investigation, reconstruction, expert advice, court testimony, and consultation is included in a single premium.
- All IBF Investigations’ attention and commitment is directed towards their loyal customers.
This list goes on, but it shows again that there can potentially be a costing model that will enable transporters to keep considering collision – those losses that are risk induced – to be managed out of an operational budget, the way they want it to be.
Stan shares this closing thought: “If we can get clients to view and understand road traffic collision risk as an actual risk and not as an operational expense, and if we can get our clients to accept our new costing model and support our efforts to expand nationally, everyone will benefit. We will even impact on hijacking and theft risks. Our model is the first of its kind in Africa.
“Another first for IBF Investigation. We have proven our mettle over more than 15 years, working in the African environment. This is a call to heavy commercial transporters to adjust and realign their risk mitigation strategies and to reconsider the risk branding psychology applied to road traffic collisions. We will make crash investigation as popular as tracking and recovery and insurance, at a much lower rate. This is our promise.”
Stan Bezuidenhout (IBF Investigations)