“Risk” is a word very familiar to any trucker: a term that succinctly describes a situation involving exposure to danger.
In the big rig world, “danger” presents itself in myriad forms: bad weather, traffic congestion, crashes, cargo theft, equipment failures, spiraling diesel prices … the list is endless.
From a broader business perspective, though, there are bigger risks on the horizon that could generate heavy fallout for the trucking industry; with tighter government regulations and declining economic growth being just two of larger ones.
To make matters more complicated, the potential impact posed by such risks is becoming all the more grater as businesses worldwide are “transforming” themselves in order to become leaner and more nimble, according to a new survey conducted by PricewaterhouseCoopers (PwC).
The global consulting firm noted that more than two-thirds of companies have undergone a major transformation in the past 18 months, with another 10% plan to do so over the next 18 to 24 months, as corporations large and small build new business models, tap into digital channels, and expand into new geographic markets, all while rethinking how their supply chains and the location of their facilities fit into their globalization strategies.
Yet Dean Simone (at left), leader of PwC's US Risk Assurance practice, said the concern is that as companies continue to transform their businesses to succeed in today's fast-changing global environment, they are increasingly worried about growing “external market risks” that can derail their strategic priorities; risks that take dead-aim at trucking-related operations as well, one should note.
"Continued recessionary pressures, global financial shocks, increased taxation and excessive government austerity are top-of-mind risks for board members and executives because of the serious impact they can have on businesses," Simone pointed out in the report.
"Changes in business direction have also exposed companies to new risks, and the interplay of market and business transformation is creating complex risk linkages that can be fragile and difficult to predict,” he explained. “This complexity requires businesses to rethink their approach by taking a holistic, multifunctional view of managing risk.”
Here are some of the big ones:
Simone argued that in today's “unpredictable environment,” companies need techniques to anticipate unknown risks, as well as structures that are resilient to risks when and where they occur.
[You can watch him touch on this subject in the video below.]
"Businesses can use horizon scanning and early-warning systems to spot trends, and employ stress testing to identify key vulnerabilities,” he explained. “More flexible risk appetite statements, corporate-wide contingency planning and a risk-aware corporate culture that challenges conventional wisdom are all powerful tools that can help organizations better manage emerging risks."
To that end, PwC discerned that there are four strategic “response categories” in which businesses can bolster techniques designed to address risk arising from both market and business transformation:
Not everything above is something truckers can or should deploy. But they do offer good food for thought as risks of all sorts continues to rise across the freight landscape.