How to Manage Enterprise Risk in Transportation

Transport systems range from operating a local school bus to an international shipping company.

There are inherent risks involved in operating a transportation business. This includes risks to employees, customers and the general public in operating air, road, rail, port and waterway transportation systems. There are various tools used by transport industry professionals to reduce and manage risk exposure.

Things You'll Need

• Employee training program
• Equipment maintenance personnel
• Written policy and procedure
• Insurance policy

Instructions

1. Develop a comprehensive employee training program. Properly train employees in transportation safety techniques and requirements. Transportation operators are able to practice safety procedures and timely respond to external risk factors when they have adequate training and experience.

2. Ensure that transportation equipment is in optimal condition when in operation. Hire talented equipment maintenance personnel to perform routine vehicle checks and servicing. Regularly replace outdated transportation equipment.

3. Develop a written company safety policy and procedure to manage operational risk. A transportation organization's policies and procedures should be based on both applicable transportation laws and customary industry procedures. Retain assistance from local counsel with specialization within the transportation industry.

4. 

   Liability insurance is generally required by law for transportation companies.

   Obtain insurance. Risk exposure is a constant in the transportation industry. No amount of training will completely eliminate the risk potential inherent in transportation operations. Securing adequate business insurance is a form of managing risk. It is designed to mitigate a company's cost exposure when claims of damages or injuries arise. There are certain insurance requirements on transport operators required by law. There are also optional insurance policies available for greater risk coverage.

5. Create a system for customer feedback. Customers are able to see potential risk from their perspective that may be undetectable by transportation operators, managers and executives. A system for anonymous input from non-employees provides an opportunity to capture important information that can assist in risk mitigation. This can be developed as a function on a company's website. Feedback boxes located at key terminals can also be quite effective in capturing important information.

Tips & Warnings

• This article is for informational purposes only. Consult an attorney to learn about the specific laws that govern transportation providers in your jurisdiction of operation.

Resources

• "Ten Questions About Human Error"; Sidney Dekker; 2004
• "Maritime Transportation: Safety Management and Risk Analysis"; Svein Kristiansen; 2004