Before pursuing new business opportunities, it is important for a motor carrier to evaluate the risk and determine how it will impact the entire company. Calculating the financial risk is one key factor in the decision-making process, but also consider how the new business might affect more than just the drivers and dispatchers.
Every department will be impacted to some degree, and on closer review, additional risks may come to light that may make an opportunity unappealing in the long run. Listed below are sample questions to consider that may help in your process of evaluating the risk of new business opportunities.
SALES / PURCHASING
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Does the company have enough equipment to meet this demand?
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Does the company have the correct type of equipment?
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Does the company have the financial capacity to acquire equipment to meet contractual obligations?
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Does the freight match the company’s business model?
DISPATCH / MAINTENANCE
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Are there an adequate number of dispatchers to properly dispatch the new loads?
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Can drivers deliver loads on time per the contract specifications (traffic patterns)?
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Does the existing pool of drivers have enough hours of service available?
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Does the company have enough service bay capacity to service additional equipment?
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Will the company have to use outside service contracts?
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Will additional mechanics need to be hired and trained?
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Can drivers deliver the loads safely and within regulations?
HUMAN RESOURCES / TRAINING
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Will new drivers need to be hired and trained?
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Does the contract require any specialized training or endorsements?
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Does the company have the staff to hire and train drivers in the time allotted?
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Can human resources find enough qualified drivers to fulfill the contract?
SAFETY / LOSS PREVENTION
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Has a risk analysis of the shipper’s/receiver’s location been conducted?
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Has any identified risk been communicated to senior management?
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Which risks can be removed or avoided?
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Are risk controls available to manage or reduce the possibility of losses?
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Are there adequately trained personnel available to perform road tests on new drivers?
CALL TO ACTION
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Develop a new business checklist that each department can sign off on before taking on new business.
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Conduct a risk analysis of the shipper’s/receiver’s location prior to taking on new business.
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Train all staff on the risks applicable to their departments before taking on new business.
- Communicate operational changes to staff on a regular basis.
The information in this article is provided as a courtesy of Great West Casualty Company and is part of the Value-Driven® Company program. Value-Driven Company was created to help educate and inform insureds so they can make better decisions, build a culture that values safety, and manage risk more effectively. To see what additional resources Great West Casualty Company can provide for its insureds, please contact your safety representative, or click below to find an agent.
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This material is intended to be a broad overview of the subject matter and is provided for informational purposes only. Great West Casualty Company does not provide legal advice to its insureds, nor does it advise insureds on employment-related issues. Therefore, the subject matter is not intended to serve as legal or employment advice for any issue(s) that may arise in the operations of its insureds. Legal advice should always be sought from the insured’s legal counsel. Great West Casualty Company shall have neither liability nor responsibility to any person or entity with respect to any loss, action, or inaction alleged to be caused directly or indirectly as a result of the information contained herein.
