Carole Woodhead Hermes chief executive
The catalyst for the financial savings and a string of other employee health and safety benefits is the Hermes Driving School, which plays a critical role in ensuring that the company's 480 employed drivers and 163 agency drivers meet its industry-leading safe driving standards.
The focus on safe driving in 2009/10 when compared with 2008/9 saw a:
• 109% improvement in accident-free days per vehicle from 216 days to 434 days resulting in significant reductions in vehicle downtime and the cost of vehicle replacement
• A 47% improvement in the accident rate - including minor bumps and scratches - per vehicle from 1.44 to 0.75
• A 41.8% reduction in the number of recorded accidents from 620 to 361 across the commercial vehicle fleet
• A 33.5% (US$366,500) cut in the cost of incidents The reduction in the number of vehicle-related crashes and their severity was recorded against a background of the size of the light goods vehicle and HGV fleet increasing 11 per cent from 430 vehicles to 479 and the number of days of vehicle use rising 16.9 per cent from 134,160 to 156,775. In addition to the commercial vehicle fleet, Leeds-based Hermes also operates 183 company cars.
Simultaneously, the number of insurance claims related to vehicle damage has reduced 60 per cent and UK insurance premiums for the business dropped 10 per cent in the last 10 months.
Catalyst
Hermes safety drive has been led by chief executive Carole Project:Hermes safe driving programme
Benefits:(in one year to April 2010)
US $ 1.5 million cost savings
4.5% reduction in fuel consumption
60% reduction in claims related to vehicle damage
10% reduction in UK insurance premiums
109% improvement in accident-free days per vehicle
47% improvement in the accident rates per vehicle
41.8% reduction in the number of recorded accidents
33.5% cut in the cost of incidentsWoodhead, who points to the company successfully achieving year-on-year growth in volume, revenue, market share and profit: "This success stems largely from a change in management culture which addressed, among many other factors, the need to manage those driving on behalf of the business more thoroughly and to scrutinise the costs associated with them more effectively. The catalyst of change has been the Driving School, which has delivered enormous benefits for the Hermes business.
"A knock-on effect from the improved accident rate per vehicle and the increase in the number of accident-free days per vehicle was the significant reduction in vehicle downtime and the cost of vehicle replacement across the fleet. This, in turn, had a significant impact on the service to Hermes customers because it was possible to make improvements to client delivery and collection times.
"We ensure that all drivers are made aware of the impact they deliver to business results through the improvements in reducing incidents involving Hermes vehicles and improving their fuel efficiency." The Driving School now delivers induction and continuation training for all Hermes drivers with a concerted focus on safe driving and encouraging employees to drive fuel-efficiently with the end result being cost savings.
The focus on 'smarter' driving has contributed to at least a 4.5 per cent reduction in fuel consumption in the past year across the business that has resulted in significant cost savings and delivered a positive impact towards reducing Hermes' carbon footprint.
"The development of Hermes employees and a focus on safety is central to delivering superior customer service, revenue and business growth," says Woodhead. "We want to improve the professional knowledge of our drivers whether employees or agency, and ensure that they are aware and competent in all measures which will deliver a safe working environment."
All drivers are introduced to the Hermes work-related road safety policy and procedures in their initial induction training with both in-vehicle and classroom sessions and thereafter in all elements of the training delivered by the Driving School and in certain elements delivered as part of corporate training.
Training is supported by on-going one-to-one in-vehicle coaching, which begins on completion of training, by depot champions to ensure continued performance improvements and positive impact on results.
Meanwhile, Hermes's company car policy ensures that all vehicles conform to the work-related road safety policy and procedures at all times.
Where individuals need to travel by car for business purposes, whether using a company car, hire vehicle or private car, all vehicles are operated under the terms of the company car policy.
All drivers of Hermes's commercial vehicles must meet minimum standards, which include: a minimum of two years driving experience since passing their test and no more than six penalty points on their licence for speeding with no other offences acceptable.
The company undertakes driving licence checks quarterly.
When accidents do occur the company completes a detailed analysis. If shortfalls in training standards are identified then drivers may receive additional training.
As Woodhead points out, "We operate in an industry that is constantly feeling the pressure of rising fuel prices, new legislation, increasing customer demands, market competition and an economy in recession. We have continued to invest in training to help us meet these challenges and the success of the Driving School has had a direct impact."
Hermes offers clients, including some of the UK's most successful retailers, a dedicated business-to-consumer residential delivery solution, specifically designed to meet the demands of the European retail, mail order and online shopping market. The company handles over 110 million parcel deliveries and collections annually, and delivers 22 per cent of all catalogue and internet home delivery parcels throughout the UK. The company employs 1,600 people across the network and uses the services of over 7,500 local couriers under contract, who provide a flexible service to their neighbourhoods up to six days a week using their own vehicles.
Hermes became the 43rd company to achieve Business Champion status from the UK Government-backed Driving for Better Business campaign, managed by
