Assessment and Transportation Risk

Transportation Risk Assessment is an essential aspect of risk management. TRA manages

transportation risks by considering hazards, routes, and impacts. This promotes the
identification of major contributors to the risk and thus strategies for risk reduction. Risk
management is the identification, evaluation, and prioritization of risks (defined in ISO 31000
as the effect of uncertainty on objectives)
followed by coordinated and economical application of resources to minimize, monitor, and
control the probability or impact of unfortunate events or to maximize the realization of
opportunities.

TYPES of RISK

Every company faces risk. For transportation companies, the risks typically reside in three
areas: fleet integrity and safety, driver safety and retention, and compliance. The first two areas
are subject to external influences, particularly weather events, natural disasters, traffic, and
road conditions.

Carriers take on plenty of other risks as well. They are responsible for delivering the very
shipments that keep their shipper customers in business. Any disruptions, including accidents,
losses of cargo or financial woes, can create a supply chain disruption that damages reputations
and decreases profits.
Weather and traffic are risk factors we are all familiar with, but more have entered the picture
in the past decade or so. Risk & Insurance believes some of the newer risks facing the
transportation industry are advancing technology, cyber risk, and market fluctuations created
by international trade disputes. Additionally, “a worsening driver shortage, regulatory
compliance and the sad state of America’s infrastructure also present persistent challenges.”

How does transportation risk management work?

Transportation risk management may not look the same for every company. There are,
however, foundational elements every transportation company should put into place. The
Federal Highway Administration offers several helpful recommendations for transportation
companies seeking to reduce the risk inherent in their industry
Every company faces risk. For transportation companies, the risks typically reside in three
areas: fleet integrity and safety, driver safety and retention, and compliance. The first two areas
are subject to external influences, particularly weather events, natural disasters, traffic, and
road conditions.

Carriers take on plenty of other risks as well. They are responsible for delivering the very
shipments that keep their shipper customers in business. Any disruptions, including accidents,
losses of cargo or financial woes, can create a supply chain disruption that damages reputations
and decreases profits
The obstacle facing transportation companies is that so many of the risks they face are out of
their control. They can’t redirect a storm, but they can reroute a shipment – but only if they
have the right data early enough to make the change without impacting delivery commitments.

To mitigate as much risk as possible, transportation companies strive to execute strong

enterprise risk management strategies. These strategies aim to put the company in a better
position to effectively respond to risks in real-time before they cause harm.

Implementing transportation risk management is a way to assess the specific risks and devise
a strategy to deal with those risks. The risk variability and pressure to meet demand while
reducing costs are forcing companies to get serious about their transportation risk analysis.
There is simply too much data to manually gather and analyze and that data is constantly
changing, prompting companies to take their analysis capabilities to the next level with the use
of modern technology.

The benefits of transportation risk management

The purpose of transportation risk management is not to eliminate risks. Risks are inherent in
every industry, and many are completely out of the control of any organization. Instead,
transportation risk management serves as a system to anticipate potential disruptions for one
purpose: to help transportation companies develop dynamic processes and systems that
quickly, effectively, and reliably respond to changing logistics and transportation issues.

These predictions are only the beginning. They shed light on what may happen, when and
where, but the goal is to have the right mechanisms in place to properly respond to those
predictions before they negatively impact the business. To have a plan of action in any
circumstance (known, predicted or unknown), transportation companies must constantly
revaluate their risks. It’s not a one time and done sort of thing, either. Those risks travel with
each truck across thousands of miles of roads and across borders. They fluctuate and can change
every mile of the journey.

Data is at the centre of risk prediction. Companies must have access to accurate, reliable, and
comprehensive information that offers a clear picture of supply chain and transportation
network vulnerabilities. By predicting interruptions, companies can be proactive in minimizing
their impact. They can create backup plans or alter plans entirely to lessen the blow. In essence,
they can be more resilient to changes and threats.

Risk Assessment: A Case Study for Transportation

Projects in India
T.H. Nguyen1, G. Bhagavata 2 and F. Jacobs3 1Dept. of Civil Engr. &
Construction Engr. Management, CalState Long Beach, 1250 Bellflower
Blvd., Long Beach, CA 2City Constructors Inc, 500 Molino St, Suite
#118, Los Angeles, CA 3 Program of Construction Management,
California Baptist University - 8432 Magnolia Ave, Riverside, CA 92504

Significance of the study

With a population of about 1.2 billion people, transportation in India is imperative to the
nation's economy. Since the economic liberalization of the 1990s, development of
infrastructure within the country has progressed at a rapid pace, resulting in many modes of
transport by land, water and air. Though the number of motor vehicles is low when compared
to global standards, the automobile industry in India is rapidly growing, with a production of
over 4.6 million vehicles. Public transportation still remains the primary mode of travel for
most of the population, and India's public transportation systems are among the most used in
the world. As of 2011 India’s rail network is the 4th longest and the most heavily used system
in the world, responsible for transporting 7,651 million passengers and over 921 million tons
of freight annually