Transportation Risk Management or TRM is basically the process of controlling risks associated with transportation. It considers and analyses all sorts of risks that affect the transportation of goods, relays and logistics and ensuring that they’re properly managed.
There are numerous risks that could affect a company’s transport activities, some are external and are caused by external events such as natural disasters and terrorist attacks. Others are internal and are caused by internal factors such as poor communication, poor processes or poor planning. And then there are external risks such as accidents and damage due to weather and fire. To properly manage them, companies should consider all the risks involved in their various activities and try to identify how they can reduce them.
As a matter of fact, there are several sources that you can use to assess risks that may affect your transportation activities. The following are some of the most commonly used tools:
A company’s risk analysis can be done manually or can be a system that involves different people who work together to identify and evaluate the risks they have. In fact, manual risk assessment has been very effective for organizations since it relies on the knowledge and experience of an individual or team to identify possible risks and identify how they can be minimized. On the other hand, automated systems are also used to effectively analyze risks and manage them effectively. Examples of these systems include the National Automotive Software System (NAAS), NIST and DOTBASE. The systems allow multiple individuals to independently make decisions regarding risk management while using the same information and can provide a consolidated approach to risk management.
Various methods are used in the management of risks. The most common of these is the Risk Control Program, or RCP. The RCP identifies the main risks, defines the scope of each risk and provides a method to effectively manage and mitigate the risks. A variety of methods such as hazard identification and classification, cost-benefit analysis, contingency planning, risk estimation, vulnerability assessment and risk tolerance are also used.
Transportation Risk Management also entails the management of the environment that surrounds the transportation. Examples of these are the establishment of standards, rules and regulations in transport related activities, and the implementation of quality programs to ensure the safety of transportation activities. These can include the following:
Another important step that must be taken is the implementation of risk-reduction strategies. In this step, various preventive measures are implemented to minimize the negative effects of risks that may affect the transport activity. Some examples of these steps include the use of safety equipment, the reduction of operational risks, the reduction of environmental risks, the introduction of standardized equipment and procedures, and the improvement of employee training. Moreover, a comprehensive security program is also implemented to reduce and control unauthorized access to transportation activities. For example, a driver’s logbook that contains his/her personal information is replaced by a uniform safety plan, a secure loading dock is installed for the trucks and other vehicles, and a closed loop fire detection system is installed.
Lastly, a control plan is also created and implemented to track and manage the transportation activities. This plan is designed to identify the cause of potential risks and how they can be managed, and to provide solutions to problems that may occur as a result of those risks.
Another method of transportation risk management is the construction of risk management systems. Some of these systems include:
These systems are typically designed with a focus on the prevention of risks that may affect transportation activities. Furthermore, they are also designed to improve the overall efficiency of the operation and increase the profitability of transportation activities.
Transportation risk management is an effective means of controlling risks that can adversely affect the operations and maintenance of transport-related activities. It helps in the planning and management of transportation activities and is necessary in determining and implementing the correct measures to reduce or eliminate such risks.