Inflating costs hindering investment in safety

Rising costs can hinder investments in critical areas such as technology, company culture and new equipment, which may act as a roadblock to businesses looking to implement safety initiatives, according to industry specialist, NTI.

NTI’s manager – repair management and assessing, Ben Johnson. Image: NTI

Cost inflation

Ben Johnson, NTI’s manager – repair management and assessing, says operators are experiencing higher operating costs across the board, including fuel, labour, servicing and maintenance, and new and used equipment. “The recent surge in fuel prices compounds these issues, elevating operational expenses and squeezing profit margins,” he said. “And the persistent shortage of drivers not only strains delivery schedules but also inflates labour costs, undermining the operational efficiency of the entire business.”

On top of these key input costs, Johnson says regulatory changes, including tougher emissions and safety standards, also weigh heavily on transport companies’ bottom lines.

“Transport operators might have to adapt to these changes in the environment to actually keep these contracts and keep their business afloat,” he added.

What’s more, Johnson says ageing roadways, bridges and tunnels are also impacting on operators’ costs, necessitating more frequent equipment repairs and upgrades.

“It’s not just the pressures of paying their operators higher wages, rising fuel prices, but it’s also the maintenance of these vehicles as well,” he said.

“In this landscape, the increasing effect of these compounding challenges not only jeopardise financial stability but have also struck the industry’s ability to provide reliable and cost-effective services, raising concerns about the overall resilience of the transportation industry in meeting demands of a dynamic and inter-connected global economy.”

Investment impact

Johnson says NTI is keenly aware of how these challenges can undermine the pursuit of best practice for some operators.

“Higher operating costs can hinder investments in things like technology and company culture, which can act as a roadblock to businesses looking to implement safety initiatives,” he said. “Higher operating costs can also affect the borrowing capacity for these businesses to purchase new vehicles as well.

“This perpetuates a negative cycle as older vehicles break down more, increasing risk and decreasing capacity if they are out of action,” Johnson added. They also cost more to operate.

“The ever-present skills shortage across the transport and logistics sector also impacts the bottom-line as businesses bear the cost of wear and tear on equipment and additional training to ensure the safety and competence of employees.

“Whilst training and upskilling drivers is an investment, it’s exacerbated by the current economy, especially for smaller to mid-sized operators.”

Engineering solutions

As a transport industry specialist, Johnson says NTI offers solutions that can help businesses optimise processes, operate more efficiently and improve safety outcomes.

For one, eligible NTI customers can engage in a complementary risk assessment of their operation by NTI’s experienced risk engineers.

The resulting report includes practical steps and recommendations operators can take to help make operations safer, and can assist in realising better staff retention, improved efficiency, and reduced costs.

What’s more, NTI leverages its industry knowledge and experience to produce a range of freely available educational materials aimed at improving customers’ operations and safety performance.

Through blogs, podcasts, articles, etc, NTI experts provide insight on key operator issues and challenges, including asset management, incident management/response, safety/culture, recruitment, education and training, and more.

On an annual basis, NTI’s National Truck Accident Research Centre (NTARC) produces the Major Accident Investigation Report which provides unique insights into serious heavy vehicle crashes which are critical in raising industry awareness about the causes of these incidents – as well as underpinning solutions.

NTARC doesn’t just share data, it proactively engages with customers to establish extra detail and helps them implement prevention strategies to reduce future occurrences.

Recently, the research centre expanded its remit to provide valuable safety guides for operators on topics such as sleep apnoea, fatigue management, safe loading and unloading, and driver inattention/distraction.

Additionally, NTARC beginning to drill down and expand data based on industry segment, targeting some high-risk sectors such as tankers, through its Dairy Safety program, which has a range of tools to reduce the high incidence of tanker rollovers in the industry.

“We try to help with these issues by creating awareness, by releasing material in the form of webinars, podcasts, blogs, reports and industry insights where we gather the industry experts to address trends and cost savings techniques,” Johnson said. “We deliver stats back to industry on how incidents occur, and we use the data to offer insights into how we can work together to make industry safer and more sustainable.”

*This article contains general information only and you should obtain your own professional advice based on your personal and business circumstances. NTI bears no responsibility, and shall not be held liable, for any loss, damage or injury arising directly or indirectly from your use of or reliance on the information in this article.

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